By Bruce Williamson, Chief Investment Officer at Imara Asset Management South Africa.

Bad news around power outages, the rand, public sector shortcomings and the industrial relations climate is drowning out an important message for local investors: South Africa is still a good place to invest if you know where to look.

South Africans are great at propagating bad news, but often miss key developments with the potential to build personal wealth, secure inflation-beating returns and create better on- and off-shore balance across a portfolio.

A good example of the pessimistic mindset is public reaction to the World Economic Forum Global Competitive Index for 2014-2015 in which South Africa ranked in the bottom 30% for 22% of the 115 indicators.

Almost all media attention fell on the fact that we’re among the world’s worst for maths and science education while co-operation between labour and employers is abysmal.

Yet take a closer look, and we see that we ranked in the top 30% for 40% of the indicators. We’re tops globally for corporate reporting and securities regulation, and among the world’s best for financing on local equity markets and R&D investment.

Our banks are world class, we have robust systems for settling disputes and we can rely on good-quality professional management.

New opportunities

Even areas of concern have a flipside that highlight new opportunities.

Public sector failures often create gaps for our innovative private sector. For example, educational challenges create demand for quality private education, resulting in the growth of some well managed education businesses.

A wave of world-class South African businesses have emerged since 1998 when the barrier between banking and stockbroking was lowered. This saw a number of foreign banks take positions in South African stockbroking businesses, which have greatly assisted local corporates in internationalising their operations.

This created a phalanx of local businesses with a growing inflow of foreign earnings.

Previously, rand-hedge stocks were concentrated in resources, but not anymore. A pharmaceutical firm like Aspen operates in more than 100 countries. Insurers like Sanlam and Old Mutual have strong bases offshore. Discovery recently completed the purchase of 100% of UK insurer Prudential.

Billiton and Anglo are global. Omnia, the chemicals, explosives and fertiliser business, earns over 30% of its profit in Africa. Investec is reportedly the third-largest UK asset manager. Sasol and Mondi are big international players. So are Woolworths, Standard Bank etc.

Yet South Africans focus on Eskom.

There are clearly areas of opportunity in South Africa – not only for big business, but retail investors and savers. Our best companies have strong management teams, and their businesses earn in euros, dollars and sterling as well as rands.

You can achieve international diversification and build your personal wealth without turning your back on South Africa. It’s good to remember that now and again.

Imara is a mid-sized, independent, Botswana-listed investment banking group that prides itself on objective decision-making in the service of its clients.