South Africa’s planned expropriation of land without compensation could drive away investors, says economist
Frequent labor and service delivery protests in South Africa are discouraging investors in the country, experts warned.
There have already been 144 strikes against service delivery since the beginning of the year, according to the Municipal IQ, a local government data and intelligence organization.
“Without a doubt labor protests, service delivery protests and political instability are responsible for driving away investors,” Professor Andre Duvenhage of the North-West University told Anadolu Agency.
Dozens of protests by workers demanding wage increases have already taken place this year, with companies losing days of productivity.
“Investors both foreign and local want a stable environment to do business,” Duvenhage said.
The professor noted that there has been an increase of violent protests calling for improved service delivery in parts of the country compared to 10 years ago.
South Africans normally protest when the government fails to deliver services such as housing, water, electricity or due to lack of jobs.
During such protests shops are looted and public property including schools are set on fire or vandalized
“Labor protests play a negative role but I don’t think it’s the only issue driving away investors. There is the land issue where government wants to expropriate land without compensation as well as our tax rates,” economist Mike Schussler told Anadolu Agency.
He said it would be good for South Africans to reduce the number of protests in the country. South Africa has one of the most vibrant trade unions in the world advocating and protecting workers rights, unlike in other African countries where workers have little or no protection.
However, Africa’s most industrialized nation also has high unemployment standing at 27 percent, yet mining companies are cutting jobs over alleged losses.
On Tuesday, Gold Fields, one of the leading mining firms in the world, announced it would be cutting over 1,500 jobs. The company says it wants to reduce its activity in South Africa, lower its costs after years of losses and failed turn around.
The firm’s decision to shed jobs has created tough reaction from government with the Mineral Resources Minister Gwede Mantashe saying the mine did not follow due process before announcing the decision.
Mantashe said in a statement that the firm did not follow the Mineral and Petroleum Resources Development Act (MPRDA).
“We are beginning to notice a worrying trend where some mining companies do not meaningfully engage with the department on their restructuring plans‚ and only brief us as a mere formality or tick-box exercise‚ ignoring processes outlined in the law which are binding to every mining right-holder‚” he said.
