Land expropriation without compensation tops agenda of investor road show

Deputy Finance Minister Mondli Gungubele says the question of land expropriation without compensation is featuring prominently in discussions with international investors. He leads a government, business and labour delegation to New York, the second and final leg of an investor road show that also saw Finance Minister Nhlanhla Nene visit London earlier this week.

Gungubele also weighed in on developments at the South African Revenue Service (SARS) all ahead of a decision from Moody’s on a possible further downgrade before the end of the month.

They are back in the Big Apple to give assurances and explain political and economic developments in South Africa with questions around land expropriation without compensation high on the agenda, at least for investors in this part of the world.

“It has become an invariable question in every meeting where we have gone and we understand. But all that we are saying to investors, the worst could have been in a situation where we ignore any emotive issue like land. This thing moves from 1913 and we adopted a constitution and that constitution ensures that there is a clause that deals with it because it is a fundamental issue for either keeping our country together or keeping it apart,” says Gungubele.

The roadshow has included meetings with ratings agencies as Moody’s weighs a possible downgrade to junk status later this month.

“Take into account the discussions we had with them and the frankness and honesty of the SA delegations articulated to them, and the truthfulness of the story we presented to them, with respect and humility, we expect a better view from them.”

On whether the resignation of SARS’ senior official Jonas Makwakwa was a sign of things to come for Commissioner Tom Moyane, Gungubele says; “It has to be a relationship as crafted in the constitution and the law that is the first point. Two, we accept that there are challenges in SARS and there are processes to deal with those. We’ll be able to pronounce as Treasury, depending on the outcome on the process that we are putting in place.”

Business and labour believe the sentiment towards South Africa has already improved internationally.

“All we know is that as team SA led by the new Minister of Finance and the new Deputy Minister of Finance, we have done everything that we can, we have been honest, we have been open, we have said these are the opportunities, these are the challenges, this is the task at hand but we have been very explicit by identifying the risks that we have. South Africa has never been in a better space,” says Chief Executive Officer of Business Leadership South Africa Bonang Mohale.

The Federation of Unions of South Africa General Secretary Dennis George says ; “SA fought now for this period to make sure that we put the country on a new path, on a path recognizing that many of our people are living in poverty, many of our people are unemployed and our society is totally unequal and that was the most important part of this particular intervention and I think what the ANC have also elected new leadership that can provide the guidance for our nation because it is critical for our country with so much potential to do much more and is for us important to play that role.”

The Moody’s decision on a possible downgrade to junk status follows similar decisions by S&P and Fitch in 2017.