Agri SA says, political leadership blatantly bedevils the economy
31 March 2017
The cabinet reshuffle last night is not only about individuals, but more about the underlying message being conveyed especially in relation to the economy, says Johannes Möller, President of Agri SA. “We perceive this step by Mr Zuma as one of disregard to the economy, ignorance with respect to investor confidence and carelessness about the future actions of rating agencies”. “Further turbulence and uncertainty also with respect to the exchange rate is certainly uncalled for”.
"South Africa seems to be currently following a beggar thy neighbour policy, a policy traditionally described as one whereby a country adopts certain policy measures that can be detrimental to other countries" he said. He added that this is currently clearly an irrelevant expectation especially if the low level of foreign direct investment (FDI) into South Africa is taken as a barometer. "According to the latest World Investment Report, FDI into South Africa decreased by almost 70% in 2015 compared to the previous year; the lowest level in 10 years. "Clearly foreigners are not prepared to accept local policies just willy-nilly.
"On the face of it, it thus made little if any sense for president Zuma having ordered minister Gordhan to cancel meetings with investors in London and New York and to return home. What message does this convey about the level of trust to be placed in our current senior country representatives and even, as was announced last night, their successors. Surely such ill-considered steps can lead to the country being further starved of desperately needed FDI", Moller said. "Clearly a rethink of policy formulation and political conduct are now of paramount importance if our country is not truly to become a failed state". He added that the fact that 17 million people currently rely on state grants - people that could have been part of the employed and entrepreneurial cadres of the economy - testifies to the urgency that is required in this regard.
"Although not directly affected by the cabinet reshuffling, the agricultural policy environment is equally uncertain if not in a worse state". Political utterances regarding expropriation without compensation, impractical proposals on curbing the size of landholdings, the restitution of land process being in a state of flux, the uncertain state of future water availability and unclear demands with respect to black economic empowerment to be adhered to are most certainly not conducive to investment also in our sector, this whilst optimum production on a commercially viable basis is required to meet future food demand especially for the largely urbanized population in the country". "We believe that we as an organization has presented government with workable solutions with respect to land reform imperatives and non-disruptive financing in this regard. "Why basically no response was forthcoming is unclear, maybe due to some level of distrust, which should be addressed in the interest of the country, to the extent that it does exist".
Moller said an extremely disturbing feature of the public debate is the sporadic calls for the Constitution to be changed. "If we were to go this route, the little policy certainty that still exists will also dissipate. We most certainly need more policy certainty, not less".
Moller said that it might be necessary for social partners i.e. government, business and labour to revisit the National Development Plan (NDP) in an open, frank and honest way as the many laudable and workable proposals in the NDP are now fading away into history. He quoted from the NDP: "South Africa has the means, the goodwill, the people and the resources to eliminate poverty and reduce inequality. But it will not happen unless we write this new story, a story of people, their relationships, their dreams and their hopes for a better tomorrow".
Issued by Thea Liebenberg, Media Liaison Officer, Agri SA, 31 March 2017
