For years, many commentators have described the move on property rights — the expropriation without compensation agenda — as an elaborate political ruse by President Cyril Ramaphosa to offer something symbolic to his opponents in the ANC, while simultaneously gutting it of any substance.
Indeed, the president himself has engaged in this. In 2019, for example, he told an investor conference: “I’ve said it before — foreign investors have nothing to fear; there’s no way we can invite foreign investors to our country and say ‘come, invest’ and tomorrow we take your land away. That is not going to happen. That is not sensible. It’s not something that any sensible person does.”
With the president’s signature of the Private Security Industry Regulation Amendment Bill, SA has taken a big step towards repudiating these sentiments.
We at the Institute of Race Relations have argued that it is not only foreign investors who should be concerned, but local business people too — indeed, they have far more at stake than their foreign counterparts. And that it is not only land that is on the table for confiscation.
There is a great deal happening in this piece of legislation, but for foreign investors, the expectations that SA citizens must hold “at least 51% of the ownership and control” of security companies will be of special concern. This may not be out-and-out expropriation, but in requiring the ceding of majority ownership, it comes uncomfortably close. Foreign investors and diplomats have long expressed concerns.
Now it is here.
President Ramaphosa is correct that inviting investment and then acting to dissuade it is not sensible. However, it may be politically and ideologically attractive, so good sense may not be decisive.
Those concerned for SA’s economic prospects should take heed now.
Terence Corrigan
Institute of Race Relations
