Letter: Land grab an AGOA threat - Business Day

Much concern has been expressed about how South Africa’s geopolitical posturing might influence its future participation in the US’s African Growth and Opportunity Act (AGOA). Rather less attention has been given to the risks inherent in domestic policy.

Among the conditions for participating in the initiative are a commitment to respecting property rights. Yet for years, the South African government has trumpeted its intention to abridge these through a campaign of expropriation without compensation (EWC).

While this issue may not have the public prominence it once did, it remains a very real risk. As we at the Institute of Race Relations have warned, the Expropriation Bill, if enacted, will place enhanced powers to carry out the EWC agenda in the hands of a decidedly untrustworthy state. The Bill is now before the National Council of Provinces.

And the prospect of EWC was noted in US Congressional hearings last month, with concerns having been expressed that this would not only undercut South Africa’s economic prospects – we have heard repeatedly from businesspeople that EWC makes the country effectively ‘uninvestable’ – but also undermine its future as a constitutional democracy.

Certainly, with the first order need being to elevate South Africa’s anaemic economic growth rate (below 2% in 2022) to around 7%, as recent IRR proposals envisage, every available opportunity must be harnessed.

AGOA represents an important set of opportunities, not least to our hard-pressed farmers and manufacturers. To lose it over an inherently growth-retarding strategy such as EWC would be the height of folly.

Terence Corrigan

Institute of Race Relations