Land expropriation not going to happen
South African economist Helmo Preuss yesterday said that the land expropriation issue as well as the current issues surrounding the mining charter in that country are threats towards the current change hype dubbed Ramaphoria.
Ramaphoria is a word given to a fuzzy warm feeling and confidence in economy after President Cyril Rampahosa took power.
However, that feeling (Ramaphoria), cannot not last, Preuss, who is an economic forecaster, told Windhoekers yesterday.
At an Economic Association of Namibia (EAN) breakfast meeting in the capital yesterday, Preuss said: “Ramaphoria cannot last and the biggest threat to that is land expropriation without compensation and the mining charter.”
According to him, the hype and warm fuzzy feeling of hope in the South African economy is also faced by other issues such as the external economic environment, giving an example of trade wars.
Another one of the biggest issues that are a threat to Ramaphoria is the fact that the head of the world superpower, American President Donald Trump, does not like Africa. He highlighted the aluminium tariffs on South Africa as one of those uncertainties that arose from the Trump era.
A few months ago, Fin24 reported that the decision by the US government not to exempt South African steel products from import duties would cost local exporters an estimated R3 billion quoting the Steel and Engineering Industries Federation of Southern Africa (Seifsa).
“One day we can just wake up and South Africa is kicked out of AGOA,” he said.
The African Growth and Opportunity Act (AGOA) is a trade programme meant to establish stronger commercial ties between the United States and sub-Saharan Africa. The act establishes a preferential trade agreement between the US and selected countries in the sub-Saharan region.
Despite the fact that land expropriation without compensation is one of the biggest threats to Ramaphoria, this most debated exercise cannot take place, he said.
In July, Rampahosa made an unexpected announcement that his ruling African National Congress (ANC) will push ahead with plans to amend the constitution to allow the expropriation without compensation, a logic that has been the main centre of focus by the leftist Economic Freedom Fighters (EFF).
“Land expropriation without compensation is not going to happen. It’s not gonna happen,” Preuss said in Windhoek yesterday.
His views are compatible with those of the FW de Klerk Foundation, a South African-based foundation which promotes and preserves former President De Klerk’s presidential heritage.
Preuss quoted the report by the foundation as the reason why land expropriation without compensation is not going to happen because of the technicalities in the constitution that will challenge the proposed amendment.
About two weeks ago, the South African rand, to which the Namibia dollar is pegged, weakened against the US dollar after a tweet by Trump on the land debate fuelled speculations of possible sanctions against the country.
As one of the other main threat to Ramaphoria, the mining charter question in South Africa has a big impact on the warm fuzzy feeling about the current situation.
In July this year, Reuters reported that South Africa plans to raise black ownership at permit-holding mining companies to 30% from 26% within five years, quoting a draft of a hotly-contested new industry charter.
The government and miners had been at loggerheads over a previous version of the charter, which the Chamber of Mines industry body slammed as confusing and a threat to South Africa’s image with investors.
Preuss yesterday highlighted South Africa’s mission on getting investment in the country worth billions of US dollars as that which is not compatible with the investor-scaring new industry charter.
In his welcoming remarks, the programme manager at the Economic Association of Namibia, Cons Karamata, reiterated the fact that anything that happens in the South African economy is important to Namibia in one way or the other.
“That is why it is important that we understand what is happening in the South African economy,” he said.