IRR urges Ramaphosa to seize the moment

While President Cyril Ramaphosa generates significant goodwill overseas, the Institute of Race Relations is encouraging him to bring some of that impetus back home with him as challenges mount. South Africa’s head of state has successfully concluded a two-day state visit to the United Kingdom at the behest of the new monarch King Charles III. He’s the first head of state to crack the nod and has been on a charm offensive in selling South Africa Inc to the Brits. Back home though, there are pressing issues awaiting his attention. An ever-skyrocketing crime pandemic, and a broke national power producer that isn’t producing as much as giving out in bits and bobs whilst trying to avoid a national grid collapse. Our unemployment stats are also some of the worst in the world. On top of this, there are crucial pieces of legislation that await his signature. The IRR urges him not to sign them in their current form as to do so would simply disincentivise investment in the country – undermining the very purpose of his recent jaunt. The piece below was originally published on the Daily Friend. – Michael Appel

Exploit goodwill and attend to policy reform now, IRR urges Ramaphosa

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’.

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