A state of near panic has been fuelled by prophets of doom who want us to believe that by expropriating land without compensation SA will turn into another Zimbabwe, and that the ratings agencies will soon downgrade our credit ratings and scare off investors.
Yet the two major rating agencies have both issued reports contradicting the stance of those opposed to change. S&P has indicated that it expects the rule of law, property rights and enforcement of contracts to remain in place, and that expropriation will not significantly hamper investment in the country. The agency has also affirmed its faith in SA’s institutions, including the judiciary, in undertaking checks and balances.
Moody’s has also downplayed concerns by the local agricultural sector and indicated that the way the government handles land expropriation will be a test of its ability to balance attracting investment with alleviation of poverty. In its most recent comment, Moody’s took it even further, indicating that SA could see its credit rating upgraded if it successfully implements structural reforms that raise economic growth and stabilise the nation’s debt burden.
Change by its very nature is painful as it takes us out of our comfort zones, it robs us of what we have become accustomed to and threatens our expected futures. With that comes uncertainty. Such change is even more disruptive when it threatens the economies and wealth of those who benefit from the status quo, such as commercial farmers and those who own vast tracks of land.
The land issue is extremely emotive and sensitive, but ignoring it won’t change the fact that black people lost their land as a result of wars, conquest and racist legislation.