PRETORIA – South Africa would experience an “imminent socio-economic disaster” if expropriation without compensation (EWC) was pursued, with the anticipated decline in gross domestic product (GDP) possibly leading to a loss of more than 2.28 million jobs, according to an independent economic impact assessment of the proposed policy.
The results of the assessment pointed to extreme economic hardship for South Africa if EWC was adopted, including a downgrade of the country’s sovereign bonds to junk status, higher interest rates, a fairly sharp decline in taxation revenues and a deep recession.
“Capital, which is an indispensable prerequisite for economic growth, job creation and growth, acts just like a gazelle in the African bush. If you scare it, it runs away,” it said.
The assessment was done by independent economist Dr Roelof Botha, an adjunct faculty member at the Gordon Institute of Business Science (Gibs), assisted by Professor Ilse Botha from the University of Johannesburg.
Peer reviews of the study were conducted by Lumkile Mondi at the University of Witwatersrand, Keith Lockwood at Gibs and Wandile Sihlobo, a member of the panel of experts on agriculture recently appointed by President Cyril Ramaphosa.