US secretary of state Mike Pompeo speaks during a media conference at the UN Economic Commission for Africa in Addis Ababa, Ethiopia, on February 19 2020. Picture: AFP/ANDREW CABALLERO-REYNOLDS
US secretary of state Mike Pompeo speaks during a media conference at the UN Economic Commission for Africa in Addis Ababa, Ethiopia, on February 19 2020. Picture: AFP/ANDREW CABALLERO-REYNOLDS

Washington — The SA government’s plans to expropriate land without compensation would be disastrous for the economy, US secretary of state Mike Pompeo has said.

The policy proposal is an example of centralised planning that has failed in other African states such as Zimbabwe, Tanzania and Ethiopia, Pompeo told reporters on Wednesday in the Ethiopian capital, Addis Ababa.

“SA is debating an amendment to permit the expropriation of private property without compensation,” he said. “That would be disastrous for that economy, and most importantly for the SA people.”

African economies need “strong rule of law, respect for property rights, regulation that encourages investment” for inclusive and sustainable economic growth, Pompeo said.

He urged African governments to adopt the Trump administration’s limited-government approach for economic success.

“If there’s one thing you should know about our president — my boss — you should know he loves deals,” Pompeo said of President Donald Trump. “He wants more to happen between the US and nations all across Africa.”

The rand has proved sensitive to White House comments on the issue in the past. It slumped in August 2018 after Trump asked the secretary of state to “closely study the South African land and farm seizures and expropriations”.

This was not the case on Wednesday. The rand gained for the first day in three, advancing 0.4% to R14.95 per dollar by mid-morning. 

The SA Institute of Race Relations said the government ought to take heed of Pompeo’s remarks.

“It is not altogether unusual for officials representing foreign countries to express such robust sentiments. Pompeo’s remarks do, however, mirror concerns expressed by others —such as the Netherlands’ foreign minister, Stef Blok, who warned that undermining ‘property rights and the rule of law’ would deter ‘existing and potential investors alike’,” the institute said in a statement.

“In the case of the US, there is a real concern of losing market access,” it also said.

Update: February 19 2020 
This article has been updated with further comment from Mike Pompeo.

Bloomberg

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