Three ministers line up against nationalisation debate - time for President Zuma to take a stand
It is time for President Jacob Zuma to openly reject the debate on mine nationalisation. So far, three Cabinet Ministers have gone on record against such a debate, but there is no clarity on what the President or the rest of his cabinet believes. Or, indeed, what the government's official position is.
It is no longer good enough for government leaders to pass the ball to the ANC's so-called task-team investigating mine nationalisation. Productive investment is driven by perceptions, and current perceptions are that the government of the day in South Africa is debating whether to nationalise private mining assets.
The DA is relieved that, one by one, cabinet ministers are joining the opposition to a debate around nationalisation. But investors will need to hear an unambiguous statement from President Zuma before they are prepared to discount this "debate" as simply the ramblings of the largely irrelevant ANC Youth League.
In this case, the President is being led by his ministers. On Monday, Public Enterprises Minister Malusi Gigaba pointed out "the harm this reckless debate is doing to the good image and investments of the country". Yesterday, Mining Minister Susan Shabangu weighed in, saying "I don't think as South Africa, we want to repeat failed states". Trade and Industry Minister Rob Davies has reportedly called nationalisation "unconstitutional" in an address to the Swiss-South Africa Chamber of Commerce.
Minister Shabangu rightly indicated that she perceived the nationalisation of mines to be the wrong solution to our current poverty and unemployment crisis. The DA strongly agrees with the Minister. She pointed out that the emphasis of this debate has wrongly been placed on mine nationalisation, and that it should rather be a discussion about job creation and poverty eradication. But even to openly debate the nationalisation of private assets will worsen our situation by driving away foreign investment.
There are workable alternative solutions that will help to accelerate economic growth and job creation in South Africa. These include creating incentives for increased employment through a youth wage subsidy, making it easier to register a business, and better assisting small-scale enterprise.
Under the President's leadership, the New Growth Path has been announced with the aim of creating five million new jobs, yet we are simultaneously entertaining a debate on the nationalisation of mines that has the potential to destroy countless jobs. The President now needs to state where he stands on nationalisation, or risk his presidency being defined by an inability to create jobs and a decline in foreign direct investment.
Statement issued by Tim Harris MP, DA Shadow Minister of Trade and Industry, August 3 2011
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