IRR to investigate reasons for companies divesting or downsizing

Perturbing headlines of recent months point to mounting job losses resulting from companies cutting back their operations or leaving the country entirely.

What led to these business decisions – and what might have averted the cutbacks and divestment – are the key questions the Institute of Race Relations (IRR) will be putting to companies which have either downsized or left the country in the past five years.

Says Makone Maja, IRR Strategic Engagements Manager: “The losses in businesses and ultimately jobs from an already fragile economy represent a devastating forfeiture in livelihoods and the ability of families to provide for themselves. They also tell a deeper story about the constraints of doing business in South Africa which, if not thoroughly reviewed and addressed, will continue to cost the country more.”

The Rand Merchant Bank/Bureau of Economic Research Business Confidence Index, which gauges conditions for operating a business, ranked South Africa at 40 points in the second quarter of 2025, down from 45 points in the first quarter. According to RMB/BER, this means that only four out of 10 surveyed businesses within the relevant sectors are satisfied with operating conditions in the country. Critically, it demonstrates that the majority of companies are not.

AngloGold Ashanti, BNP Paribas, Arcelor Mittal, Société Générale, Barclays and Goodyear, to name a few, are some of the companies that have announced they are either leaving South Africa or are scaling down operations. The official reasons offered by the companies range from decisions to list on foreign stock exchanges to access a larger pool of capital to key logistical and policy constraints in an economic environment that is hostile to business.  

Maja recommends the adoption of the reforms spelled out in the IRR’s Blueprint for Growth papers, a policy roadmap for guiding South Africa away from the abyss of economic decline and on to the path of exponential growth.

“The Blueprint for Growth series is jobs-oriented and shows that true economic transformation is possible when millions of jobless South Africans can attain sustainable employment and be free from poverty. The papers not only provide a comprehensive diagnosis of the source of our economic crisis, but remedies for overcoming it.

“In a country with record levels of unemployment, there should be no resistance to alleviating barriers to a thriving private sector.”

Maja concludes: “The government must introduce exit interviews to establish from disinvesting companies why they are leaving as well as what measures it could have taken to avert such decision making in the first place. This is the premise of the letters we are writing to these firms. It is to ask them to rank business impediments and to solicit their opinions on alternative policies that would have convinced them to remain, and so boost investment, taxes and job opportunities in the country.”

Media contact: Makone Maja, IRR Strategic Engagements Manager Tel: 079 418 6676 Email: makone@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za