ATTACKS against foreign nationals in South Africa have caused outrage around the continent, with South African businesses operating in the rest of Africa beginning to feel the heat.
South Africa’s cabinet warned on Friday that companies operating in the rest of Africa may be targeted, just as Johannesburg-based Sasol Ltd. announced it was repatriating South African employees working on projects in Mozambique for their own safety.
In Nigeria, the newly-elected All People’s Congress (APC) together with civil society handed a memorandum to the South African embassy in Lagos on Wednesday, giving the government 48 hours to stop the violence, or else South African businesses in Nigeria would be shut down.
It puts businesses such as MTN, Shoprite, Pick n Pay and Multichoice in a tight spot, as their African operations contribute significantly to company revenues.
In MTN’s case, for example, the company has twice as many subscribers in Nigeria than it does in South Africa, with the Nigerian operation alone contributing 37% of group revenues.
Significantly, MTN’s Nigerian business is growing while its South African one is stagnating - latest company results show that revenue in the half-year ending June 2014 grew 22% in Nigeria, while it shrank 3.4% in South Africa.
Mega retailer Shoprite has 357 outlets in the rest of Africa, including 115 Shoprite supermarkets, and more than 100 other furniture, home decor, pharmacy and restaurant stores in 14 African countries.
Last year a report revealed that just five Shoprite stores in Angola sold more cans of energy drink Red Bull than in all of Shoprite’s 382 stories in South Africa, and 19 Shoprite stores in Angola sold more bottles of the ubiquitous sparkling wine JC Le Roux than the entire South African business did.
And one of South African Airways’ most lucrative routes per kilometre is to Angola: the Johannesburg- Luanda route, at about $0.19 per km, is three times as expensive as Johannesburg-London which brings in $0.06 per km - although the UK is six times further than Angola from South Africa.
Therefore, by antagonising the rest of Africa with the xenophobic attacks, South Africa is biting the hand of the continent that feeds it. South African businesses and their shareholders must be very unhappy with the attacks.
(ABOVE is an infographic showing just a few of South African businesses in the rest of Africa).