CAPE TOWN South Africa (Xinhua) --
South African President Cyril Ramaphosa on
Tuesday brushed aside the possibility of U.S.-imposed sanctions
over the land reform South Africa is pursuing.
“There is no reason
to believe any country will impose sanctions on South Africa for
any actions that we take, actions that are constitutional, that
are lawful and consistent with international law,” Ramaphosa
said while answering questions in the National Council of
Provinces (Upper House of Parliament).
He was referring to
speculations that the United States might impose sanctions on
South Africa for its controversial land reform characterized by
expropriation of land without compensation.
“Let’s face it, what
we are going through has evoked a lot of questions,” Ramaphosa
In a tweet posted on
August 22, U.S. President Donald Trump criticized the South
African government for “seizing land from white farmers.” Trump
said he had asked his Secretary of State Michael Pompeo to
closely study the South African land seizures and expropriation,
and the large-scale killing of farmers. Trump’s remarks sparked
a diplomatic spat between the two countries.
Minister of International Relations and Cooperation Lindiwe
Sisulu met with the American charge d’affaires in Pretoria and
was also in contact with Pompeo over the matter, according to
Ramaphosa said his
office had not received any communication from the U.S. on the
He said the
government was ready to discuss its land reform plans with any
South Africa has to
keep educating those who were interested in the country’s
affairs, but who might not understand the country’s history and
processes, said Ramaphosa.
Ramaphosa pointed to
“increasing consensus” at home and abroad that the accelerated
land reform was essential for South Africa’s well-being.
Minister Theresa May and Belgian Deputy Prime Minister and
Foreign Affairs Minister Didier Reynders voiced support for and
understanding of South Africa’s land reform when they visited
the country recently, said Ramaphosa.
Parliament’s ongoing process to review the Constitution to pave
way for land expropriation without compensation, Ramaphosa said,
“Just relax, this process will end up very well.”
that his government would carry out the land reform in light
with the Constitution and rule of law, in a way that will
strengthen the property rights of all South Africans and not
detrimental to the economy.
Illegal land grabs
would not be tolerated, he stressed.
He also refuted the
notion that blacks can’t till the land and that South Africa
would become another Zimbabwe or Venezuela where land reforms
confidence that South Africa would find solutions to its
“A lot of people
bring good solutions that we should not reject out of hand,” he
South Africa business
confidence index continues to decline
JOHANNESBURG South Africa (Xinhua) --
The business confidence in the country
continues to declines in the last three quarters of 2018, said
Rand Merchant bank (RMB) on Tuesday.
The bank released
the RMB/Bureau of Economic Research (BER) business confidence
for the third quarter in 2018 on Tuesday in Johannesburg. The
report showed that the business confidence index (BCI) and
activity continues to weaken. At the first quarter of the year,
the index was 45 before falling to 39 in the second quarter and
38 in the third one.
South African business landscape continues to weaken, with more
sectors showing signs of strain. While confidence hasn’t (yet)
fallen to the levels observed during the previous (and severe)
recession of 2009, we remain deeply concerned about the
prospects,” said Ettienne Le Roux, chief economist at RMB.
A total of 1,700
business people in the five sectors which are manufacturing,
wholesale, retail, new vehicle trade and building and
construction were surveyed during the month ending September 6,
2018. The RMB stated that in the third quarter there were some
fears of inflation and high interest rates.
They also stated
that the rand fell to over R15/U.S. dollar because of trade
tensions between the U.S. and Turkey. The report also observed
that there is a renewed disillusionment about the broad policy
direction the country is taking.
“It goes without
saying, the political and policy factors weighing down on
business confidence (such as the government’s land reform plans)
must be resolved to produce impetus for an increase in
sentiment. This is especially the case now that global headwinds
are mounting, domestic public finances are stretched and
monetary policy is facing rising inflation risks,” Le Roux said.
Le Roux also said,
“Given the historically tight relationship between the RMB/BER
BCI and real GDP growth, the renewed downward trend in
confidence is disconcerting. On past form, it points to economic
growth weakening even further after already slowing from 1.4
percent year-on-year in the first quarter to 0.5 percent in the
South Africa GDP forecast faces
dowside risks: Finance Minister
JOHANNESBURG South Africa (Xinhua) --
South Africa is currently bedeviled by a myriad
of local and international pressures which threaten the
country’s economic growth forecast rate of 1.5 percent this
year, said the Finance Minister Nhlanhla Nene on Monday.
Nene said this while
speaking at inaugural Thought Leadership Conference hosted by
the Government Employees Pension Fund (GEPF) in Johannesburg.
“The outlook for the
economy remains fragile. The contraction in gross domestic
product growth in the second quarter of 2018 and the downward
revision to the first quarter data pose significant downside
risks to national treasury’s projection of 1.5 percent growth
presented in February,” said Nene.
He pointed out that
South Africa is facing subdued business confidence, weak
activity in the supply-side of the economy and various headwinds
to household spending.
He stated that the
country needs economic growth of over 5 percent to meet the
demands of the over 57 million people with an unemployment rate
of over 27 percent.
Nene said, “Low
growth may threaten the overall long-term potential growth rate
of the economy if it translates into the inability of a country
to implement critical growth-enhancing interventions such as
productive infrastructure investment or improving quality
education and skills training.”
government pays over 17 million people in social grants (old
age, children and disability). The low growth rate is making it
difficult to meet those obligations and the overall
progressivity of tax and fiscal policy, said Nene.
He also observed
that the weak growth limits the ability to enact
counter-cyclical fiscal and tax policy, which could otherwise be
deployed as an additional measure to boost aggregate demand.
tensions and tightening financial conditions have introduced
downside risks to the global growth outlook,” Nene said. “In
addition, a mix of idiosyncratic challenges in several emerging
market economies and broader fears of a deteriorating global
environment for trade and dollar funding has impacted countries
such as South Africa.”
He explained that
South Africa is still heavily reliant on foreign savings to
finance the current account deficit as the domestic funding is
not sufficient to meets its demand.
South Africa recession will
have negative repercussion: Finance Minister
JOHANNESBURG South Africa (Xinhua) --
South African Finance Minister Nhlanhla Nene on
Monday said the falling of the country into technical recession
will have negative consequences in the country, including low
He was speaking at
the 2018 Tax Indaba in Johannesburg.
Last week Statistics
South Africa announced that the country is on technical
recession following the gross domestic product (GDP) contraction
by 0.7 percent in the second quarter this year.
collections have serious consequences and can impact everyone,
whether it be through lower expenditures on education or health,
or through increases in tax rates to make up for shortfall,”
Nene said. “The ability of a government to borrow at reasonable
interest rates is also dependent on its ability to collect
He warned that any
under-performance in our tax revenues will have wide
repercussions. Tax collection have declined in South Africa in
the last two fiscal years. The government had to raise income
tax rates, taxes on capital gains and dividends and subsequently
raised the value-added tax rate.
He warned against
corruption and called for good governance and ethical