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April15

Is Brand SA still valued?

WHAT do the Russians, the French, the Chinese, the South Koreans, the Americans and the Europeans have in common when it comes to South Africa? The answer is simple – expectations!

brandsaThey all expect South Africa to place multi-billion rands worth of orders with them within the next 12 months. They know that thanks to several years of ill-advised procrastination and poor management – sadly personified by Eskom – South Africa is in dire need of placing orders for additional energy generation.

These orders, it’s no longer a secret, will be dominated by the much-maligned nuclear new build – the expected golden goose in the eyes of several of them – or new technology for renewable energy.

South Africa is also expected to place orders for several lower fuel consuming aircraft for its national carrier, South African Airways, in a bit to mitigate against rising fuel costs and the maintenance of an old fleet of planes that guzzle fuel like there is no tomorrow. Both Eskom and SAA are in dire need of cash to carry out these procurements, as credit sources have almost dried up for various reasons.

Once built, commissioned and connected to the national grid, the new energy generators – including Medupi and Kusile coal-generated power stations – will need to be maintained for decades to come. In addition to its relatively limited expertise, South Africa will rely on what is expected to be a large community of foreign expats from the successful bidding countries to maintain the power stations. This will continue costing the taxpayer money – a lot of it.

Given the reported drop in investor confidence and the downgrading of our creditworthiness in recent months, what brand value is assigned to us by all these countries? Do they consider us easy prey because we need their expertise and loans so badly, or do they see us as equals in negotiating sessions for all the planned multi-billion rand procurement projects?

Do they see us as desperate for their assistance, and therefore easy to manipulate, or are we still able to punch above our weight in negotiations, despite the recent avalanche of negative developments?

In structuring the contracts with the winning bidders, do we still carry sufficient weight that will provide us with room to manoeuver and insist on the kind of local content or industrial participation that will create lasting opportunities for local small to medium – even large – enterprises, skills development and job creation?

If yes, will these benefit much more than a few politically-connected individuals and businesses? Have we learned enough from the dreaded Arms Deal, whose spectre still rears its head from time to time because we have failed to bury it completely?

The questions asked above are important because they speak to our conduct as a country and national brand and the legacy we leave in the minds of others. Potential tourists, investors, collaborators on multinational projects – such as the Square Kilometer Array Africa project – foreign students and scholars, multinational organisations, etc get attracted to South Africa because of how we are perceived as a nation.

As the memory of the Mandela years fade with each passing year, we need to constantly create fresh memories and positive points of reference for South Africa-watchers to associate with us.

We alone, led by our politicians and business leaders from various sectors, are responsible for positioning a robust nation-brand that will help us keep our place among the best of the best and negotiate the best deals for South Africans in our interactions with others.

The last place we want to negotiate from is that of an underdog; no one comes out a winner from that position.

  • Posted by donvalley
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