SA firms facing ‘extortion’ in Africa: gov’t promises help

Government is stepping up its support for some of the country’s biggest companies to help them hunt for business in Africa and protect them against extortion.

Naledi Pandor, the foreign minister, and state officials met with business executives this week to discuss how South Africa could present itself as “a unified force” when operating on the continent, and ensure companies take full advantage of the available opportunities, said Clayson Monyela, a spokesman for the department of international relations & cooperation.

A platform has been created for South African countries that are active on the continent to share experiences and ideas with their peers, he said.

The initiative comes as companies including Vodacom Group and MTN Group deal with disputes in the Democratic Republic of Congo and Cameroon, respectively. South Africa companies have also faced challenges in countries such as Nigeria and Ghana, and the government bemoaned the lack of uniform rules and guidelines in Africa pertaining to operating procedures and dispute resolution.

“When certain governments are running out of funds, they target South African companies, or at least it appears that way,” Monyela said in a phone interview. “In some of the countries they operate in, someone will wake up and say you owe us money and there is no rationale for that. In other instances, they are slapped with taxes they know nothing about. Literally, it is extortion.”

Tax dispute

Vodacom is currently embroiled in a tax dispute in the Congo, where the authorities at one point sealed off its offices and confiscated some of its executives’ passports.

MTN is meanwhile trying to regain control over funds in Cameroon, after the government froze its bank accounts and sought to transfer the money into a third-party account. The move stems from a disagreement between a local businessman and a South African bank that’s unrelated to the mobile company’s operations.

The South African government plans to elevate its firms’ concerns to the African Union and ask that the continental body adopt protocols on how companies and investors on the continent should be treated, and discuss how to address difficulties in repatriating funds from some markets, according to Monyela.

Issues pertaining to specific industries such as telecommunications, energy and infrastructure will be addressed by working groups that is expected to result in executives collaborating with high level government officials, he said.  — S’thembile Cele and Loni Prinsloo, with Monique Vanek, (c) 2023 Bloomberg LP

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