Gwede Mantashe. Picture: RUSSELL ROBERTS
Gwede Mantashe. Picture: RUSSELL ROBERTS

AFRICAN National Congress (ANC) secretary-general Gwede Mantashe says the governing party is concerned about the prospects for recession and further ratings downgrades, and that the government must do everything possible to stage a growth recovery. In practice, quite the opposite is happening — the policies of the government seem almost calculated to engineer a recession.

The Private Security Industry Regulation Amendment Bill requires foreign-owned businesses to transfer 51% of ownership to South Africans, creating uncertainty as to whether the government is intent on large-scale "indigenisation" along the lines of what is happening in Zimbabwe.

The Restitution of Land Rights Amendment Act came into force in July 2014, reopening the land claims window and causing uncertainty about investment in agriculture. The Property Valuation Act was introduced to allow the state to value land and movable assets identified for expropriation at below-market prices.

In August 2014, the Employment Equity Amendment Act was brought into effect, threatening fines as great as 10% of turnover for firms failing to meet racial targets. In October 2014, the Broad-Based Black Economic Empowerment (BEE) Amendment Act was made operative, which threatens similar fines plus jail terms for companies that unintentionally undermine BEE objectives.

Labour laws were amended to restrict casual and atypical jobs, even though these job categories show the greatest promise for growth.

Proposals have been made to prohibit foreigners and foreign-owned companies from owning land.

The Department of Trade and Industry has proposed reducing protections for patents and other innovative investment. The Mineral and Petroleum Resources Development Amendment Bill was introduced, threatening price and export controls on miners. It was withdrawn, creating more uncertainty about mining investment at the worst time for commodity producers.

Despite our desperate shortage of foreign investment, the Protection of Investment Act was signed into law late last year, cutting the protection on offer to foreign investors and leaving their assets open to seizure.

The ANC is now pushing ahead with putting the Expropriation Bill into operation, which in its current form could see the state seize almost any fixed or movable asset.

The government has also adopted an obstructive and hostile policy to western democracies, most recently over the Africa Growth and Opportunity Act, while miscalculating in placing too many of its foreign trade plans in the emerging markets basket. Global circumstances have also turned against us, but it is the policies adopted by the government that have exacerbated this crisis and brought the prospect of recession and further credit downgrades into view.

Despite this imminent threat, in December last year, a Cabinet minister penned an article calling for the "defeat of the capitalist system".

With the greatest respect to Mantashe, he also remains a senior figure in an organisation (the South African Communist Party) that sees its mission as destroying that same capitalist system. He also says land reform will be the centrepiece of the government’s reform strategy. But agriculture contributes less than 3% of gross domestic product and employs (including seasonal employees) just 4.4% of workers.

Land reform might be at the centre of the government’s ideological objectives, but it cannot serve as the centrepiece of any serious policy of economic reform. Current policy on agriculture is likely to do more harm than good by taking productive land out of production and reducing agricultural investment. This means food prices will rise, which will worsen the country’s overall economic position.

SA must seek to return the economy to a respectable rate of growth. But the policies of the ANC and the government it leads, together with the ideological positions adopted by many of its leaders, are likely to have the opposite effect.

• Cronje is CEO of the South African Institute of Race Relations