European non-governmental organisations (NGOs) are keeping South Africa poor by funding strategic litigation for activist movements that drive away foreign investment and prevent economic growth. 

Foxglove, a British activist legal organisation that uses court action and public campaigns to support climate change causes is funding a South African NGO, the Housing Assembly, which is seeking to prevent the building of a new data centre in Cape Town. The Housing Assembly, a radical left-wing agitation movement that uses housing grievances to campaign for social and economic change in Cape Town, is trying to stop the expansion of a data centre in that city.

Equinix, an American company, is trying to expand the number of data centres it has in Cape Town. It already holds approval from the city for a data centre at King Air Industria, a light industrial park next to Cape Town International Airport, and has applied to build a second data centre on the same site. Earlier this month, the City of Cape Town Municipal Planning Tribunal approved the application.

Exactly one objection was lodged. It came from The Housing Assembly, together with Foxglove.

The objection argued that the application gave the city too little information to judge whether further development was desirable, sustainable, or consistent with its wider obligations to provide social housing. It asked the tribunal to reject the application outright.

That objection was misplaced. The application by Equinix was to start the technical planning step dealing with property boundaries and floor space, on land already set aside for industry. The objectors demanded answers to questions that are to be settled at later stages of the same process. What these activist organisations appear to be really doing is using a routine city planning hearing to raise housing and service delivery grievances.

The Housing Assembly says it wants to “build a mass movement” of people living in poor housing, link housing to “land, basic services, and climate change”, and create “a fighting united front” with unions and other working-class organisations. It describes its meetings as “a tool of political education”, teaches young participants to “draw the links between their struggles and the system of neoliberal capitalism”, and says one of its central goals is to “undo the demobilisation of communities since 1994”.

Data centres are among the largest forms of private investment a city can attract. They inject capital into local economies, require extensive construction, improve electricity and fibre infrastructure, and attract other technology businesses. A recent American study found that American states that secured data centres experienced 6.2% more business establishments, 8.2% higher reported incomes, 5.9% higher wages, 5.9% more tax returns, and higher overall employment, with especially large gains in construction and digital industries.

This is one of several cases of where European funding was used to obstruct investment into South Africa, with the most prominent being attempts to obstruct investment in power stations and the oil and gas industry.

There is a profound irony here. Wealthy Europeans, living in countries that became rich through rapid industrialisation, now spend money trying to make industrialisation more difficult in poorer countries. Every unnecessary legal challenge increases costs, delays projects, and sends a signal that this is a difficult country in which to invest. Wealthy foreign foundations can afford to indulge in ideological campaigns because they already live in prosperous societies built on centuries of industrial development. South Africans cannot. The country needs more factories, more data centres, more electricity, more infrastructure, and more jobs. South Africa should be far more sceptical of foreign-funded activist networks whose campaigns make those goals harder to achieve while claiming to act in our interests.