According to AfriForum, the State of the Nation Address (SONA), delivered this evening by President Cyril Ramaphosa, unfortunately did not offer reassurance to either foreign or local investors, but rather created more reason for uncertainty and concerns.
The President fails to heed the warnings of major investors in South Africa – as evidenced by the controversial diplomatic memorandum of the USA, UK, Germany, the Netherlands and Switzerland that has come to light recently – by persevering stubbornly with plans for implementing a programme of expropriation without compensation,” Alana Bailey, Deputy CEO of AfriForum, says.
“Clearly, the President ignores the examples of countries like Venezuela and Zimbabwe that are now experiencing the disastrous effects of similar programmes, thereby gambling with the future of everyone in the country.”
According to Bailey, in his State of the Nation Address, President Ramaphosa suggested that entrepreneurship can be promoted and inequality reversed by means of the redistribution of property, but throughout the world ample proof attests to the fact that the protection of private property rights is the key to economic development.
“In addition, as little government regulation as possible, as well as policy certainty is required for an economy to grow. The State of the Nation Address, however, did not provide any reassurance or clarity in this regard. On the contrary, with reference to the continuation of BBBEE and the Competition Amendment Bill, the President created the impression that regulation will in fact be stepped up even further in the near future.”
Bailey emphasised that AfriForum realises that in the months leading up to a national election, state of the nation speeches tend to focus on placating voters and lesser-loyal party members, but taking the current economic crisis faced by South Africa into consideration, especially in terms of the scale of unemployment, corruption and crime, it is disappointing that the President did not display strong leadership by dispensing with populist promises of instant solutions such as expropriation without compensation, but rather forged ahead along this self-destructive path.
“Where human rights such as private property rights were violated, economic growth has never followed, and the victims have consistently been the most vulnerable people who were supposed to have benefitted from such redistribution processes in the first place. All the beautiful promises made by President Ramaphosa in his 2019 State of the Nation Address regarding upliftment programmes, are condemned to failure unless private property rights are protected,” Bailey concludes.
