FOREIGN investors will remain cautious about South Africa until a clear policy on the state’s role in mining is adopted and implemented, but these measures are unlikely before next year’s general election, global risk analysts said yesterday.

Instead, an increase in labour activism and a continuation of service delivery protests looms in the year ahead as the African National Congress (ANC) becomes "distracted" by the national elections in 2014.

"SA must be conscious of the outflow of investment. Investors can’t ignore the higher rates elsewhere in Africa, with their concerns compounded by labour unrest and political uncertainty," Joanna Turner, an associate director for Africa at Global Risk Analysis, a division of global business risk consultancy Control Risk, said on Monday.

Fatal mining strikes, service delivery protests, the government’s heavy-handed attitude to mining companies and lack of policy clarity have seen the country losing lustre among foreign investors in favour of other African destinations in the past year. A Southern Africa analyst at Global Risk Analysis, Simiso Velempini, told Business Day nothing had changed in the government’s approach to suggest a decline in the number of civil society protests that would be seen this year. "The structural factors are the same," she said.

Municipal IQ said that in the second and third quarters of last year there were more protests than during any other quarter since 2004. Service delivery protests accounted for 30% of community uprisings recorded since 2004.

"We will definitely see an increase in labour activism. You have e-tolls (the plan to toll highways in Johannesburg that is opposed by unions), Eskom’s planned tariff increases and the Congress of South African Trade Unions to oppose the youth wage subsidy, and this has an impact on the implementation of the National Development Plan (NDP)," Ms Velempini said.

South Africa’s NDP aims to eliminate poverty and reduce inequality by 2030, but Ms Velempini is concerned about the government’s ability to create jobs in the run-up to the 2014 election. She says the "born free" generation of children born after democracy in 1994 will be voting for the first time, and they are likely to factor in different considerations to previous generations when casting their ballots.

The extent to which opposition parties can capitalise on this will largely depend on the sophistication of their election campaign and ability to appeal to a broader base.

"Momentum is building to force the government to take decisive action to address issues of domestic and international investor concern," said David Butler, MD for Control Risks Southern Africa.

Ms Velempini expects another improved performance by the opposition Democratic Alliance.