10.10.2010

Nationalisation under fire

 South Africa's business community is having sleepless nights about the continued calls for nationalisation of local companies.

Despite repeated assurances by President Jacob Zuma that nationalisation is not government policy, ANC Youth League president Julius Malema uses every platform to push nationalisation and insist that the ANC's national executive committee is discussing it.

 South Africa's business community is having sleepless nights about the continued calls for nationalisation of local companies.

Despite repeated assurances by President Jacob Zuma that nationalisation is not government policy, ANC Youth League president Julius Malema uses every platform to push nationalisation and insist that the ANC's national executive committee is discussing it.

Malema has also threatened the expropriation of privately owned farm land if owners do not accept the price offer.

"Landowners who refuse amounts offered during expropriation should have their land taken away with no payment," Malema said.

At the ANC's national general council in Durban last month, the youth league put the nationalisation debate firmly on the map.

The ruling party resolved to launch a two-year investigation in the build up to its policy and elective conference in 2012, defying attempts by some top ministers to dismiss the subject.

Peggy Drodskie, adviser to the chief executive of the South African Chamber of Commerce and Industry (SACCI), said that in principle the business body was opposed to nationalisation.

"But on the assumption that there could be some areas that could be appropriate in a democracy that the business community can live with, let us interrogate it further and see if its practical," she said.

Approached for comment, the Chamber of Mines of SA pointed to a statement by its chief executive Mzolisi Diliza in which he emphatically opposed mine nationalisation.

"Nationalisation has not worked in any country in the world and neither will it work in South Africa... Investment flows into the country would be substantially diminished, inhibiting growth, reducing employment opportunities and exacerbating already unacceptable levels of poverty," the statement read.

Lindie Stroebel, manager for economic intelligence and finance at the Agricultural Business Chamber (ABC), said: "So far the government has a very bad track record on managing entities like Eskom (electricity parastatal), Transnet (transport), SAA and the SABC to name a few. They should rather focus on service delivery which I think they are also battling with," she said.

The agricultural sector employs about 618000people and contributes 3% to the country's GDP. However, the "multiplier effect" - combining agro-industries, input suppliers and manufacturers - could push the sector's contribution to 30%.

Elna Moolman, economist at Renaissance BJM, said investment in SA was dominated by portfolio, short-term investment, not foreign direct investments, because of uncertainty. Nationalisation talk exacerbated this problem and contributed to the brain drain.

Article source: www.timeslive.co.za