Economic hope amid Trump’s executive order on SA

There’s a glimmer of hope amid the noise about US President Donald Trump’s executive order against South Africa.

If economic sense prevails and the right people in South Africa speak to the right people in the US, it will be possible to roll back the biggest impediment to investment here.

Trump’s executive order cites “countless government policies designed to dismantle equal opportunity in employment, education, and business”.

Countless? The SA Institute of Race Relations calculates 142 active racial Acts of parliament are operative today.

Laws on broad-based black economic empowerment, employment equity, preferential procurement and their variations are justified in pursuit of apartheid redress. Fair enough.

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Yet they are also a hindrance to investment. Trump’s accomplice Elon Musk is an obvious example, baulking at giving away a 30% stake to B-BBEE in order to bring Starlink connectivity to the land of his birth.

To him and others such handouts don’t make business sense.

An unravelling of B-BBEE would stimulate investment in SA, lift economic growth and boost job creation. With the world’s highest unemployment rate and weak economic growth, SA desperately needs this.

Another impediment is lack of confidence in property ownership. Such confidence is undermined by the Expropriation Act signed into law by President Cyril Ramaphosa.

Anyone who thinks the Act is harmless has not been paying attention. While Trump was wrong to imply that the newly signed Act has been used to confiscate property, that’s not the point.

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The ANC has long campaigned for expropriation without compensation. In 2022, the ANC failed to muster a two-thirds parliamentary majority to change Section 25 of the constitution.

That did not deter Ronald Lamola, who was then justice minister. “We will now use our simple majority to pass laws that will allow for expropriation without compensation.”

And it came to pass that the Expropriation Bill, requiring a majority of 50% plus one, was approved in March last year, before the government of national unity (GNU) was formed.

The ANC’s national conference in 2022 had resolved that “government should maximise the implementation of the new Expropriation Act”.

In October last year, Deputy President Paul Mashatile “reaffirmed the government’s commitment to expropriation of land without compensation”, through the Expropriation Act. Citing the ANC resolution, Mashatile said this was a way of getting around their lack of a two-thirds majority.

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The Expropriation Act advances what the party calls the national democratic revolution (NDR). Yet the party punting NDR no longer has even the simple majority it had when the Expropriation Act was passed.

That lesson has failed to sink in. Ramaphosa doesn’t have the political or legal clout to ignore his GNU partners.

Having rejected the Expropriation Bill in parliament, the DA is, thankfully, challenging the Act’s legality in the high court.

A DA win there would improve the investment climate. Even better if the party can use its GNU presence and its access to US contacts in order to leverage change in the race laws holding SA back.

The party is uniquely placed to do this. A glimmer of hope.

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