SA's business community has been rattled by vociferous remarks on nationalisation and land expropriation by Julius Malema, the re-elected president of the African National Congress (ANC) Youth League .
Mr Malema's calls for more radical measures to address inequality and poverty are being seen as harmful to investment in the country, as they fuel uncertainty over economic policy. There is also deep concern that his aggressive stance against the leadership within the ANC, coupled with his growing influence, will destabilise the country's leadership.
"There has been a dramatic rise in uncertainty which may or may not translate into risk," said Iraj Abedian, MD of Pan African Investment and Research.
"Investors in the best of times don't like uncertainty as it reduces their degree of freedom and ease of making decisions, especially long- term decisions that require huge capital to be committed for a long period of time."
Business executives said the most contentious issue was nationalisation, which Mr Malema insists will become ANC policy. He is calling for the nationalisation of both mines and banks in SA.
"We don't have actual numbers but some investment may have been lost because of this debate," said Neren Rau, the CE of the South African Chamber of Commerce and Industry (Sacci). "Certainly some has been postponed because of the issues around nationalisation. We have been clearly told by stakeholders and diplomats that the whole debate is hurting SA."
The ANC has repeatedly said nationalisation is not its policy, but in response to pressure from the youth league it is carrying out a study of 12 other countries to gauge its "desirability". The countries include Zambia, Botswana and Namibia.
Zambian Mines Minister Maxwell Mwale said last week that the failure of the policy in his country should never be repeated. But the debate on the issue in SA has carried on, creating divisions in the party which will be used by the league as a proxy for leadership battles.
Business Unity SA (Busa), the country's largest business and professional group, yesterday called for much "greater leadership" on the question of nationalisation, to settle it as quickly as possible.
The debate was at odds with plans in the government's New Growth Path, aimed at creating partnerships between business and government to boost economic growth and create 5-million jobs by 2020, Busa said in a statement.
"The message is clear: if SA is to attract the foreign direct investment as well as the local investment we need to help create jobs sustainably, then all stakeholders have to sensibly manage public discourse," it said.
Mr Rau agreed that the way the debate on nationalisation was being conducted was adding to the erosion of investor confidence.
So was Mr Malema's talk of expropriating land without compensation, which he said was fundamental to any legal system.
In the past, Sacci had not wanted to enter the political debate around these issues but it would now engage in its own internal process to develop a stronger position, Mr Rau said. Sacci would also work with Busa to develop a joint position.
Banking Association of SA MD Cas Coovadia said that calls to nationalise banks were worrying, particularly in the context of a fragile international financial sector.
"For the banking sector these remarks are concerning but we will continue to engage with the ANC and the government . We will continue to talk, with more focus. We concentrate on those institutions which are responsible for policy in this country."
Mr Abedian said the underlying issues was not nationalisation but unemployment and poverty.
"The risk is when the normal and orderly public policy approach does not deal with the social issues, then the alternative for more radical options surface," he said.
"They may not be any more effective but they emerge as points to be considered simply as other alternatives haven't delivered."
SA's jobless rate is 25%, and has increased despite the country's recovery from recession in 2009. President Jacob Zuma has declared this year to be one of job creation and the government is pumping billions of rand into programmes aimed at speeding up the process.
Possibly the most worrying development for investors is the cracks beginning to show in SA's political alliance, as the youth league calls for its former president, Fikile Mbalula, to replace ANC secretary- general Gwede Mantashe.
"The risk is of a different order of magnitude. It's not about nationalisation, it's about political stability and transition," Mr Abedian said. "All those uncertainties now become a lot more tangible, they overshadow the others."
Last week, credit rating agency Moody's Investors Service said that political risk was starting to affect the investment intentions of both foreigners and the private sector in SA, although it remains low.
There was mounting concern that some of the populist demands from some quarters of the ANC might become policy, it said.
But at this point, many foreign investors are unaware of what is happening at the grassroots level of politics in SA.
The question is, what will they do when the noise gets loud enough for them to hear?