ON FRIDAY evening, at a pre-Mandela Day concert at South Africa House in London, High Commissioner Obed Mlaba asked the audience to promise to each "take an investor home with you".
At first blush, this may appear a bit odd. Why would a crowd of Mi Casa fans, chafing at the delay in getting the band onstage, be a good target for the "invest in SA" message? The crowd was not there to delve into the solutions to SA’s many challenges. They were there to "Jika my baby".
People had paid their pounds to see Mi Casa perform and get the good karma that comes with knowing their ticket purchase would contribute to the Nelson Mandela Children’s Foundation.
Mlaba has been keen to try to tap into the South African diaspora in the UK — and they were there in all their vibrant glory. And so he did the hard sell: we have high unemployment, weak economic growth and we must attract investment, grow the economy and create jobs, go forth and spread the word of the opportunities in SA. Like many of us, Mlaba must be all too aware of the fact that SA remains one of the most unequal societies in the world.
His message served to bookend a BBC World Service panel discussion at the British Museum on Monday evening. The panel had the somewhat ambitious task of answering this question: "Has Africa outgrown development aid?" In short, yes and no. While some countries will continue to need development aid for the foreseeable future, what Africa really needs is investment: to create engines of growth and jobs to pull vulnerable populations out of a life of poverty and backwardness and reduce growing inequality.
And for that to happen, a fair share of the fruit of that investment needs to stay in Africa. Panellists pointed to the fact that while foreign direct investment (FDI) into Africa shows signs of outpacing development aid, illicit outflows hobble the economic growth of African countries.
In May, the latest African Economic Outlook report — jointly published by the African Development Bank, the Organisation for Economic Co-operation and Development and the United Nations Development Programme — said Africa lost an annual average of $60.3bn, or about 4% of gross domestic product in illicit outflows between 2003 and 2012. During the same period, official development aid and FDI averaged $42.1bn and $43.8bn respectively. Abusive transfer pricing, bribery and tax evasion were the main modi operandi.
Most in the audience at the BBC event seemed to feel this was not a model for sustainable development and economic growth. It reminded me of recent comments by Remgro boss Johann Rupert, who has joined several other billionaires around the world in talking about the need to address inequality. Rupert’s most recent intervention was at the most fantastic event, the Business of Luxury summit in Monaco, hosted by that bastion of "the establishment", the Financial Times. Bloomberg quoted Rupert as saying: "We cannot have 0.1% of 0.1% taking all the spoils. It’s unfair and it is not sustainable."
The founder and chairman of Richemont warned that conflict between social classes would make selling luxury goods very difficult if the rich had to conceal their wealth. "How is society going to cope with structural unemployment and the envy, hatred and the social warfare? We are destroying the middle classes at this stage and it will affect us. It’s unfair. So that’s what keeps me awake at night. We’re in for a huge change in society. Get used to it. And be prepared."
Writing for Salon.com, Matthew Pulver noted that Rupert’s warnings had been echoed by the likes of US Democratic presidential candidate Bernie Sanders, who proposes a Scandinavian model. Pulver wrote: "It seems that the rich and powerful are beginning to recognise the grave error in the direction they’ve led governments and economies. If this threat is real and impending, we have two ways to address it: either in the halls of legislatures or in the streets.
"The former would be merely uncomfortable for the rich, but the latter would be dangerous, unpredictably so. Uprisings aren’t polite. They tend to invite themselves over, and Rupert’s customer’s (Cartier’s) tennis bracelets (will be) the very least of their concerns at that point."
It’s right about now that some of you are saying, "But what about the corruption, maladministration and waste endemic in our government?" Fair enough. More reason to be concerned then.
• Meintjies is Times Media’s foreign correspondent and bureau chief in London
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