Investors look for certainty – World Bank

The ANC’s plan to change the constitution to allow the expropriation of land without compensation has unnerved investors, a senior World Bank group executive said yesterday.

President Cyril Ramaphosa’s party has made the acceleration of land redistribution a key issue ahead of 2019 elections, while pledging to carry out land reform in a way that does not threaten food security.

“If you create uncertainty of some aspects of your environment, and land tenure is one of them, that is one aspect that investors will be looking at,” Sérgio Pimenta, the vice-president for the Middle East and Africa at the International Finance Corporation (IFC), the World Bank’s private investment arm, said.

“What investors are looking for is certainty,” he said on the sidelines of a meeting between the World Bank and member countries in Livingstone, in Zambia. The land issue is a complex issue,” he said. “Whatever the solution the government is looking at, creating an environment that is reliable, that is certain, is important.”

Public hearings on land redistribution were held earlier this year across South Africa, attracting large crowds and often emotional testimony.

A parliamentary committee would consider that testimony and other contributions before recommending whether or not to change the constitution to allow land to be expropriated without compensation.

Pimenta said South Africa’s long-term economic outlook was positive. The World Bank had invested about $2 billion through the IFC over the last five to six years, he said.

Africa’s most industrialised economy is struggling with ballooning debt that risks pushing its sovereign credit ratings deeper into “junk” territory.

Other problems facing South Africa include cash-strapped state-owned enterprises and a stubbornly high unemployment rate. – Reuters

Moneyweb

Tshwane city manager Moeketsi Mosola has five days to provide documentary evidence against damning preliminary findings by auditor-general (AG) Kimi Makwetu on the city’s controversial contract with GladAfrica Project Management.

Makwetu’s office served its detailed audit findings on the contract on the city on Monday. After five days, the AG will finalise the findings. He also wants Mosola to give him a copy of the preliminary report of law firm Bowmans, which is investigating the matter on the instruction of mayor Solly Msimanga.

Last month, Mosola obtained an interim order in the Labour Court to stop Msimanga and city speaker Katlego Mathebe from tabling the preliminary Bowmans report in council. Unless Mosola can provide the AG with compelling evidence to change his findings,

Whatever solution the government is looking at, creating an environment that is reliable, that is certain, is important.

Sérgio Pimenta IFC, the World Bank’s private investment arm