New legislation may save the ANC votes but will chase away foreign investment
AS THE May 7th elections draw closer, the ruling African National Congress (ANC) seems increasingly troubled by a challenge to its left flank from the Economic Freedom Fighters (EFF). The latter party is led by Julius Malema, a former head of the ANC's youth league, who favours nationalisation of businesses and farms without compensation. The ANC will win the election. But fear of losing votes to EFF has had a worrisome effect on recent legislation related to business.
Two of the most worrisome bills, on how the mining and private security industries are to be governed, were rushed through parliament before its recess. Neither bill has yet reached the statute book, but in their current form they are sure to chase away foreign investors. If the ongoing strike (eight weeks and counting) in the country's platinum mines has not yet put them off, these bills would be likely to finish the job.
Start with the mining bill. One of its clauses says the state will take a 20% stake in any new petroleum venture. Another allows the state to purchase a larger stake at "an agreed price" or through an output-sharing deal. Any business thinking of prospecting for shale oil in South Africa would think twice about doing so. If the venture proved profitable,...Continue reading
[view whole blog post
]
 |
 |
 |
 |
 |
 |
|
See More
Report Abuse