President Cyril Ramaphosa said his administration will pursue plans to redistribute land to the country’s black majority and is still considering whether constitutional amendments are necessary to make it easier to expropriate property without compensation.
“We are seeking to put right what was done wrong many years ago,” Ramaphosa, 65, said Wednesday in an interview with Bloomberg Television in New York, where he’s been attending the United Nations General Assembly. “There won’t be any mayhem, there won’t be any land grabs.”
The ruling African National Congress decided in December that constitutional amendments were needed to address racially skewed land ownership patterns dating back to colonial and white-minority rule, but they shouldn’t damage the economy and agricultural production.
Even so, the prospect of property rights being diluted has taken a toll on the nation’s assets, which were already under pressure from an emerging-market sell-off, and drawn criticism from US President Donald Trump.
Ramaphosa said he met Trump on Tuesday, but they never discussed the issue and described the US leader’s views as “clearly misinformed.”
The rand weakened 0.3% to 14.17 per dollar as of 7:23 a.m. in Johannesburg Thursday.
Investment drive
The expropriation debate has threatened to detract from Ramaphosa’s efforts to secure $100 billion in new investment and revive an economy that’s stagnated for almost a decade and dipped into recession in the second quarter.
His success will be key if the ANC is to rebuild a reputation that was badly scarred during its former leader Jacob Zuma’s scandal-marred tenure, and revive its support before next year’s elections.
“I would say what we are seeking to do on the land question is to manage risk, to minimise risk,” Ramaphosa said earlier at a Global Business Forum hosted by Bloomberg. “We all agree if we address this, we will see the investment community looking at South Africa in a different way. We are open for business, we are open for investment.”
A lawyer, businessman and former labor-union leader, Ramaphosa became the country’s president in February after the ANC forced Zuma to quit after almost nine years in office.
He also said the rand has weakened too steeply against the dollar and the currency needs to be “well-balanced” in order to support the economy.
Rand undervalued
“The rand is undervalued at the moment,” Ramaphosa said. “We want the rand to be well-balanced as to be able to support the economic trajectory of the country.”
Last week, Ramaphosa unveiled a “stimulus and recovery plan” to spur growth. It envisions R50 billion being redirected to projects that can help create jobs for the 27% of the workforce that’s unemployed, a new multibillion-dollar infrastructure fund and new rules for the mining and energy industries to spur investment. A review of power, rail and port tariffs, and less stringent visa rules are also on the cards.
“We are going to reprioritise our budget,” Ramaphosa said in the interview. “We are currently looking at where we can reprioritise spending and where we can get this R50 billion. We are going to put quite a lot of it in small and medium enterprises, agriculture, promote businesses in the townships and rural areas.”
The president said he’ll only revise his 3% growth target for this year once he’s seen what effect his new reform package has had. The central bank anticipates a 0.7% expansion this year.
Ramaphosa reiterated his determination to tackle corruption, which became widespread during Zuma’s rule.
- Bloomberg
