South Africa is undermining its own prospects by policies that discourage doing business, the Institute of Race Relations (IRR) has warned in the wake of President Cyril Ramaphosa’s outwardly successful state visit to the United Kingdom.
In a statement, the IRR says it is ‘encouraged by the positive tone’ of the interactions between the President and British leaders over the course of this week’s visit.
This shows that ‘South Africa retains significant goodwill abroad’.
‘The United Kingdom remains one of South Africa’s most significant trade and investment partners. Direct UK investment in South Africa amounted to some R609bn, with a further R898bn in non-direct investment. (SARB figures, as at the end of 2020.) We exported around R121bn worth of goods to the UK (a little over 7% of our total exports), and imported R28bn (2021 figures).’
However, while this relationship ‘can and must be expanded with an eye on generating the growth and developmental progress that South Africa desperately needs’, the risk is that the country ‘is undermining its own prospects by policies that discourage doing business in the country’.
‘Foremost here has been the policy drive for expropriation without compensation (EWC). The Expropriation Bill – which leading figures in the ruling party have identified as a mechanism to push the EWC agenda forward – awaits the President’s signature.’
The IRR urges the President to decline to sign it. Strong property protections, as enshrined in the Constitution, ‘are a key consideration for any investor, foreign or domestic’.
‘Likewise, amendments to the Employment Equity Act – which would give the Minister of Employment and Labour the authority to set racial quotas on pain of crippling fines – cannot be anything other than a disincentive to doing business in South Africa.
‘The IRR urges the President to decline to sign this piece of legislation, which starkly contradicts the Constitution’s non-racial imperative, too.
‘The IRR cautions that if South Africa continues on its present course, it can expect little besides ever deepening poverty and unemployment and disappointed hopes.’
On the other hand, the ‘aftermath of a successful state visit is an ideal opportunity to change course’.