Peter Leon, Partner and Africa Co-Chair, Herbert Smith Freehills LLP, Keynote Address at MineAfrica’s 11th Investing in African Mining Seminar, London, 27 November 2017
Quo Vadis South Africa? Will it remain Africa’s most developed economy?
A review of recent political, economic and legal developments
On December 18, just three weeks from now, South Africa’s governing party, the African National Congress (“ANC”), will elect a new leader, marking the end of ten turbulent years with Jacob Zuma as its president. This milestone comes at a moment of unprecedented political and economic crisis for post-apartheid South Africa and extraordinary events, just a week ago, in South Africa’s northerly neighbour, Zimbabwe.
The situation is summed up appropriately by the World Economic Forum in its latest Global Competitiveness Report, which ranks 137 of the world’s economies according to the “the factors that drive long-term growth and prosperity”. In September, it offered the following sobering assessment:
“South Africa’s economy is nearly at a standstill, with GDP growth forecast at just 1.0 percent in 2017 and 1.2 percent in 2018 – hit by persistently low international demand for its commodities, while its unemployment rate is currently estimated above 25 percent and rising. Political uncertainty in 2017 has decreased the confidence of South African business leaders: although still relatively good in the African context, the country’s institutional environment (76th), financial markets (44th), and goods market efficiency (54th) are all rated as weaker than last year.”
Appreciating how South Africa arrived at this state, and deciding how best to emerge from it, will be important sites of contestation at the ANC’s elective conference next month. Support is currently divided between two broad camps, representing conflicting visions not only of the country’s future, but also its recent past.
Those loyal to the President seek to replace him with his ex-wife, Nkosazana Dlamini-Zuma, who recently served as Chair of the African Union Commission, and previously as Minister of Health, Home Affairs and Foreign Affairs. Support for this faction entails endorsing President Zuma’s record of leadership (both of the party and the state), exonerating him for the country’s current economic difficulties by blaming “global headwinds”, and proposing a programme of “radical economic transformation” to turn the country around. This is supposed to redistribute wealth from so-called “White Monopoly Capital” to emerging black industrialists, through a policy of economic nationalism combined with increased state participation in key sectors such as mining, agriculture and even banking.
Those opposed to President Zuma generally support the current deputy, Cyril Ramaphosa, who was the ANC’s chief negotiator of the post-apartheid interim (transitional) Constitution, but who has spent most of the democratic era becoming one of South Africa’s most influential business figures, holding massive investments in mining and many other sectors. Ramaphosa himself subscribes to a social market-based strategy of “inclusive growth”, and while his camp includes an increasing number of communists and trade unionists who feel betrayed by Zuma, they are united with the moderates by broad agreement that Zuma’s brand of “radical economic transformation” will weaken investor confidence and harm growth, serving as little more than a subterfuge for further enrichment of a politically-connected elite.
It is helpful to put South Africa’s economic position and prospects into regional perspective. According to the Global Competitiveness Report, South Africa (at 61st) still vastly outperforms neighbouring Zimbabwe (124th), one of the world’s five worst economies in respect of property rights (136th), regulatory burdens (133rd), and the impact of rules on foreign direct investment (137th). It may be hoped that Zimbabwe’s recent change in leadership, after thirty-seven years of dictatorial rule by Robert Mugabe, will bring about improvement in these areas most vital to reversing the fortunes of a country still rich in mineral and human resources. It may also be hoped that these events will remind South Africa’s would-be leaders of what fate awaits those who pursue economic nationalism and personal enrichment over a social market economy under the rule of law.
They would also do well to consider the opposite trajectory of another neighbour, Botswana, which now ranks only two places lower than South Africa in the Global Competitiveness Report (63rd). This is despite Botswana lagging far behind South Africa in terms of market size (108th), business sophistication (93rd), technology (90th), innovation (90th) and infrastructure (90th). In the equivalent Report ten years ago, when South Africa ranked 44th, Botswana ranked only 76th. Botswana has improved its position every year since then, chiefly owing to its outstanding macro-economic management (ranking number one in the world for controlling inflation, and among the top ten in respect of government debt (5th) and gross national savings (9th)). It has also been helped by its robust protection of property rights (34th), policy transparency (34th), public spending efficiency (37th), as well as its legal framework for settling disputes (32nd) and for challenging regulations (37th).
It is thus little wonder that Botswana is consistently ranked as the most attractive mining destination in Africa, according to the Fraser Institute’s Annual Survey of Mining Companies. In the latest Survey, Botswana attained a “policy perception” score of 92% (placing 12th out of 104 jurisdictions worldwide), while South Africa sunk to a new low of 47% (placing 84th) and Zimbabwe scored only 18% (the third worst in the world).
Leading economists have attributed Botswana’s success to “its adoption of good policies”, which “resulted from an underlying set of institutions – institutions of private property – that encouraged investment and economic development”. This would also explain why Zimbabwe, through the erosion of its institutions and the adoption of poor policies, became one of the least competitive economies in the world.
In a pragmatic transition from apartheid, the new South Africa was deliberately built on the kind of institutions that would foster good governance and economic development. They are embodied in the country’s Constitution, which is supreme and specially entrenched (it cannot be amended without a two-thirds majority in Parliament), and which enshrines the right to property in a justiciable Bill of Rights. The Constitution created a strong and sophisticated network of independent institutions to defend and deepen democracy, including:
- a transparent multiparty Parliament, with the authority and duty to hold the Executive accountable;
- an independent Judiciary, led by a new Constitutional Court, empowered to strike down any errant legislative or executive act;
- a National Prosecuting Authority, to combat crime “without fear, favour or prejudice”;
- a Public Protector (or State Ombudsman), to investigate and remedy any public-sector corruption and maladministration;
- an Auditor-General to scrutinise public expenditure;
- a National Treasury to ensure “transparency and expenditure control” in public finance;
- a central Reserve Bank “to protect the value of the currency in the interest of balanced and sustainable economic growth”.
In addition to these solid domestic foundations, investor confidence was bolstered by several important international agreements. In 1999, South Africa concluded the Trade, Development and Co-operation Agreement (“TDCA”) with the European Union (“EU”), liberalising 90% of the trade between them under an asymmetric tariff phase-down arrangement over twelve years.
Between 1995 and 2009, South Africa signed bilateral investment treaties (“BITs”) with forty-nine countries (over half of which entered into force). These afforded foreign investors protection from (among other things) undue or undercompensated expropriation, as well as discriminatory, arbitrary or abusive treatment. Importantly, investors are entitled to enforce these standards directly by taking the host government to international arbitration, without needing diplomatic protection from their home government.
In 2006, President Mbeki spearheaded the adoption by the Southern African Development Community (“SADC”) of a Protocol on Finance and Investment (“the Protocol”), ambitiously aimed at developing the SADC region into an attractive and integrated investment zone. When it entered into force in 2010, this Protocol, among other things, extended BIT-type protection to investors from anywhere in the world, enforceable through international arbitration.
Under these conditions, South Africa became the most developed investment destination in Africa, and a highly valued trade partner for the UK and other EU members. The country’s information technology, telecommunications and financial systems responded rapidly to the needs of multinational enterprises, while enabling South African businesses to participate in an increasingly competitive global economy. Many private institutions flourished under these conditions, not only in business, but in civil society and an inquisitive and independent media. South Africa’s banking institutions, in particular, steadily gained a world-class reputation, and earned acclaim for their resilience during the 2008/2009 global financial crisis.
By 2010, South Africa was host not only to the FIFA World Cup but to some US$ 180 billion in foreign investment stock, more than four times what it was in 2000 (US$ 43 billion) and more than ten times what it was in 1995 (US$ 15 billion). South Africa was then the highest-ranked African country in the Global Competitiveness Report, and 45th highest in the world.
These indicators of competitiveness did not, however, meet with universal political support. One of the reasons why the left-leaning ANC factions and alliance partners deposed Mbeki at its 2007 elective conference was to curb his programme of economic liberalisation, which they felt constrained the government’s policy space to create employment through measures such as domestic beneficiation requirements. “Jobless growth” had become the rallying cry of the Left against President Mbeki’s economic pragmatism. No major changes in government policy came, however, until after the ANC’s July 2012 policy conference, where the party resolved “to transform the structure of the economy through industrialisation, broad-based black economic empowerment, … and expanding the role of the state and the role of state owned enterprises”.
The following month, the Zuma Administration unilaterally terminated South Africa’s BIT with Switzerland, followed over the next three years by its BITs with thirteen EU member states (including the UK). To “replace” these BITs, Parliament adopted the Protection of Investment Act, 2015, which offers much weaker standards of protection and, significantly, rules out any recourse to investor-state international arbitration. Having been warned that this would be inconsistent with the SADC Protocol, the government engineered a drastic amendment to the Protocol to bring it in line with the Act. That amendment has recently entered into force, but bizarrely not for South Africa, which has yet to sign it. The Protection of Investment Act, too, has yet to enter into force, while the government develops a domestic mediation facility to serve as a (rather inapt) substitute for international arbitration.
The TDCA, too, has been replaced, with an Economic Partnership Agreement (“EPA”) that the EU signed last year with South Africa (as well as Botswana, Lesotho, Mozambique, Namibia and Swaziland). Unlike the TDCA, the EPA permits South Africa to impose temporary ad valorem export duties or taxes, of up to ten per cent, on up to eight products, for up to twelve years (subject to certain exemptions). Such duties could be imposed, for example, to compel mineral beneficiation, although this would render many mines unprofitable and thus likely cost the country more jobs than it creates.
South Africa’s investment law reforms have not inspired confidence. Releasing its annual World Investment Report last year, the United Nations Conference on Trade and Development (“UNCTAD”) revealed that, during 2015, South Africa’s foreign investment inflows fell to their lowest in ten years: US$ 1.77 billion, 69% lower than 2014 (US$ 5.77 billion) and 79% lower than 2013 (US$ 8.3 billion). At the same time, investments by South African firms into foreign countries declined to US$ 5.3 billion, 30% lower than 2014 (US$ 7.7 billion). While the inflows improved slightly in 2016, South Africa still hosts only US$ 137 billion in foreign investment stock, 24% less than in 2010 (US$ 180 billion) and, alarmingly, 21% less than South African businesses currently hold abroad (US$ 173 billion). South Africa has found itself prematurely in the position of a net capital exporter, which simply cannot be sustained.
Meanwhile, unemployment unsurprisingly got worse: in September 2008, when Mbeki was recalled from office only eight months before the end of his Presidential term, the Statistician-General measured unemployment at less than 23%; it has climbed ever since and now stands at 27.7%. Clearly, the Zuma Administration has failed to deliver on its job-creation mandate.
For critics of President Zuma, this is at least partly explained by allegations that he and those closest to him had become distracted (or ‘captured’) by a trio of wealthy business tycoons from northern India, the Gupta brothers, who several years ago selected Zuma’s son Duduzane as their local partner in various mining and other ventures. In what is now labelled ‘State capture’, it is alleged that the President Zuma has allowed the Guptas to dictate changes to his Cabinet in key portfolios such as Finance, Public Enterprises, Energy and Mineral Resources, as well as (through these Cabinet appointees) to influence the governance of significant state-owned enterprises, such as the national carrier South African Airways, the energy monopoly Eskom, the ports and railways monopoly Transnet, and the arms manufacturer Denel.
Signs of ‘State capture’ manifested most brazenly in September 2015, when President Zuma suddenly replaced the previous Minister of Mineral Resources with one Mosebenzi Zwane, an obscure provincial agriculture minister with known ties to the Guptas. In December 2015, the President fired his respected Finance Minister Nhlanhla Nene, without any warrant or warning, and replaced him with ‘Des’ van Rooyen, an unknown Parliamentary backbencher (and before that a failed small-town mayor). The currency went into freefall, and only four days later, the President was strong-armed by other ANC leaders to replace Van Rooyen with Pravin Gordhan (who had served well as Finance Minister before, from 2009 until 2014).
Gordhan soon made himself an enemy of the Guptas, by defending the National Treasury’s decisions to block their companies’ allegedly irregular transactions with several state-owned enterprises, and by refusing to assist them when each of South Africa’s major banks closed their companies’ bank accounts over money laundering concerns. The banks’ decision had become inevitable after Deputy Finance Minister Mcebisi Jonas (in March 2016) alleged that the Guptas and Duduzane Zuma had attempted (unsuccessfully) to bribe him in late 2015 with an offer of Nhlanhla Nene’s job and a sweetener of ZAR 600 million.
In March this year, the President, without explanation, “instructed the Minister of Finance, Mr Pravin Gordhan and Deputy Minister Mcebisi Jonas to cancel the international investment promotion roadshow to the United Kingdom and the United States and return to South Africa immediately”. Gordhan and Jonas were shortly dismissed, and South Africa’s sovereign credit rating was promptly downgraded by the three major ratings agencies: for the first time since 1999, the country’s dollar-denominated debt was consigned to ‘speculative’ or ‘sub-investment’ grade (colloquially called ‘junk status’) by both Fitch and S&P, and only one notch above that by Moody’s; its rand-denominated debt was also downgraded to junk status by Fitch, and only one grade above that by both S&P and Moody’s.
It did not reassure the ratings agencies that Gordhan’s replacement would be Malusi Gigaba, who had been Minister of Public Enterprises during the critical period in which their spending had spiralled out of control, and allegedly into the bank accounts of Gupta-linked companies. It was also difficult to understand how Gigaba could reconcile his insistence that he would not change Gordhan’s prudent fiscal policy, with his promise to advance the President’s agenda of “radical economic transformation”.
Mining Charter III
Clearly, they could not be reconciled, which became clear in June, when Gigaba lauded, as a “welcome step”, Minister Zwane’s move to publish a new Mining Charter, without consultation and with immediate effect. Exposing just how out of touch the new Finance Minister was, each of the three ratings agencies promptly reaffirmed their downgrading verdicts, citing the Charter as proof (in the words of Fitch) “that the government is prioritising radical transformation even if this leads to weakening of the business climate and could reduce growth”.
The new Mining Charter, if implemented, will require mining companies to make drastic changes to the way they do business in South Africa, if they are prepared to do business at all. Among other requirements:
- applicants for mining rights will need to have at least 30 per cent of their shares owned by black South Africans (up from 26 per cent), in a convoluted corporate structure, while applicants for prospecting rights will need to have at least 50 per cent plus one of their voting shares owned by black South Africans;
- existing mining right holders will have to top up their black shareholding to 30 per cent, through a costly and convoluted corporate restructuring exercise, and will not be credited for previous empowerment deals from which black partners have since exited;
- all right holders will have to procure at least 70 per cent of their goods from black-owned South African manufacturers, and at least 80 per cent of their services from black-owned South African services providers.
These drastic changes could not have come at a worse time for an industry that shed around 70,000 jobs between 2012 and 2016. The Minister’s refusal to compromise on these unrealistic requirements compelled the Chamber of Mines to seek an urgent injunction preventing the implementation of the Charter pending a full judicial review, which will be heard in February. Calling it “a most egregious case of regulatory overreach”, the Chamber seeks to have the Charter set aside on the grounds (among others) that the Minister has “usurped the role of Parliament”, and violated the constitutional doctrine of the separation of powers, which diffuses government authority among three branches of State (trias politica): the Legislature, the Executive and the Judiciary. In this scheme, Parliament has the exclusive authority to create binding substantive obligations, while the Executive only has the authority to develop and apply the procedures and policies needed to make those obligations practically enforceable.
Our courts have consistently preserved this separation, striking down any statutes that give the Executive the power to make law, or even excessive discretion in the administration of the law. This is one of the obstacles standing in the way of the Mineral and Petroleum Resources Development Amendment Bill, 2013 (“Bill”), drafted shortly after the 2012 policy conference where the ANC had resolved that South Africa’s endowment of minerals (especially platinum, iron ore and coal) “urgently” be targeted for “State intervention with a focus on beneficiation for industrialisation”.
To this end, the Bill would considerably widen the powers of the Minister of Mineral Resources (“Minister”), including by giving the Mining Charter legislative force and giving the Minister unfettered authority to amend it. Significantly, it would empower him to “designate” minerals to be offered at discounted prices to local beneficiators, failing which they may not be exported without his prior consent. Not only would this likely contravene South Africa’s international obligations as a member of the World Trade Organisation (“WTO”), the granting of such wide powers to the Executive would likely not pass constitutional muster.
Despite being warned of this, the ANC Parliamentary caucus rushed to pass the Bill before the 2014 general election, permitting only three weeks of public consultation in Parliament’s upper house, the National Council of Provinces. After the election, however, Minister Zwane’s predecessor, Ngoako Ramathlodi, asked President Zuma not to assent to it.
Thus, in early 2015, the President exercised his constitutional prerogative to refer the Bill back to Parliament for reconsideration. It languished there for another year, before a new public consultation process was undertaken, which concluded just last month. The reconsideration process has generated a new range of procedural missteps, and has failed to address any of the substantive problems in the Bill. Consequently, in my view, the only constitutionally acceptable solution, now, is to withdraw the Bill entirely.
The Mining Charter and the Bill, as much as the constitutional wrangles surrounding them, have exacerbated regulatory uncertainty, which is anathema to investment in the mining sector. Despite the failings of the Executive and the Legislature, however, the South African citizenry, as well as the wider investment community, can confidently rely on the third branch of State, the Judiciary, to hold the other branches to the discipline of the Constitution. The courts have not hesitated to intervene when the Executive or the Legislature have violated the Bill of Rights, the principles of good governance, or even the country’s international obligations.
The integrity and independence of South Africa’s Judiciary is perhaps paralleled only by that of the fourth estate, a skilled and tenacious investigative media. These institutions protect one another, as the courts have fiercely defended the rights to freedom of expression and access to information, which are vital to a healthy and prosperous democracy. The rationale for this has been well explained by the Supreme Court of Appeal as follows:
“Suppression of available information and of ideas can only be detrimental to the decision-making process of individuals, corporations and governments. It may lead to the wrong government being elected, the wrong policies being adopted, the wrong people being appointed, corruption, dishonesty and incompetence not being exposed, wrong investments being made and a multitude of other undesirable consequences.”
It is perhaps for precisely these reasons that the State Security Agency last month sought, in a somewhat ham-fisted fashion, to suppress the circulation of an explosive exposé by veteran investigative journalist Jacques Pauw. Threatening him and his publisher with prosecution was a self-defeating effort, as it helped The President’s Keepers become the fastest-selling book in South African history.
In it, Pauw reveals that, in 2014, President Zuma was personally begged by the acting head of the South African Revenue Service (“SARS”), Ivan Pillay, to submit five years of overdue tax returns. Instead, Zuma appointed a retired Prisons Commissioner to lead SARS, who promptly suspended Pillay and his most senior tax evasion investigators, under the pretext that they were running a “rogue” intelligence unit. An unfortunate side-effect of this is that SARS has not collected the billions of Rand that Pillay’s team was trying to recover from a host of underworld tax dodgers, including a self-confessed fraudster and tobacco smuggler who is allegedly a major donor to Nkosazana Dlamini-Zuma’s campaign for the ANC presidency.
These revelations add a disturbing dimension to Finance Minister Gigaba’s announcement, in his Medium-Term Budget Policy Statement last month, that tax revenue would fall short by ZAR 50.8 billion this year. Despite this bombshell, Gigaba abandoned Pravin Gordhan’s fiscal consolidation strategy, and urged that “our next phase of growth must be characterised by radical economic transformation”. Gigaba revealed that, compared with Gordhan’s February budget, projected growth for 2017 had been revised down from 1.3% to just 0.7%, the deficit for 2017-2018 would rise from 3.1% to 4.3%, and public spending would exceed Gordhan’s ceiling by ZAR 3.9 billion (chiefly in order to sustain failing state-owned enterprises). Alarmingly, the debt burden would rise almost 7% annually until 2020, by which time the interest burden would be almost 15% of revenue.
The ratings agencies reacted with grave concern. Fitch observed that “the change in direction of policy-making away from a focus on fiscal consolidation that we anticipated as a consequence of March’s cabinet reshuffle is under way and occurring faster than we had expected”. Moody’s lamented that “the lack of fiscal prudence indicated by the budget will undermine growth”. Last Friday, S&P downgraded South Africa’s rand-denominated bonds to junk status, and its dollar-denominated bonds to a further notch below that, citing “further deterioration of South Africa's economic outlook and its public finances”, and noting that “economic decisions in recent years have largely focused on the distribution - rather than the growth of - national income”.
On the same day, Moody’s placed South Africa’s credit rating on review for downgrade, and expects to conclude its review after the February 2018 Budget Statement (noting that the ANC’s elective conference “may provide insights into the direction, content and credibility of the future policy framework”). Moody’s is now the only major ratings agency that considers South African bonds investable (whether in local or foreign currency). If South Africa loses this rating too, its bonds will be removed from Citi Bank’s World Government Bond Index, which economists estimate could trigger bond sales of up to ZAR 130 billion by the funds that track this index. It is reassuring, however, to reflect on the reasons proffered by Moody’s for maintaining South Africa’s investment grade rating:
“Its economy is large and well-diversified, though characterized by low growth and high unemployment. Its domestic financial markets are deep and its banking sector is well-capitalized. It possesses a well-developed macroeconomic framework… Despite recent encroachments, its core institutions remain independent and strong, with a well-functioning civil society. Adherence to the constitution and the rule of law continue to be the key pillars of South Africa’s institutional strength.”
The Zuma Administration has been taking South Africa in a policy direction closer to that of Zimbabwe than Botswana. Several significant developments under the Zuma administration have exposed concerted efforts to erode the independence and integrity of vital institutions, to encroach on the protection of property rights, and to dismantle important international trade and investment arrangements put in place during the Mandela and Mbeki administrations.
Amid all of this, the ANC’s electoral support has declined considerably. In the nationwide municipal elections held in August last year, the ANC received fewer votes overall than in any election ever before, and lost its majority in three key metropoles: Johannesburg (the seat of commerce); Pretoria (the seat of government); and Nelson Mandela Bay (significant not least for the name it bears). The ANC had already lost Cape Town (the seat of Parliament) in the previous municipal elections in 2011.
The ANC delegates’ choice next month is thus not only about how to save the country from economic ruin (which one would imagine might be the foremost priority), but also about how to save the ANC itself from electoral defeat in the national and provincial government elections in 2019. This may provide ANC delegates with the perspective and incentive needed to choose a leadership team less encumbered by scandal and failed economic policy than the incumbent.
As things stand, Ramaphosa seems to have the upper hand. Last Tuesday, ANC Secretary-General Gwede Mantashe told reporters that “almost 70% of ANC branches across the country have already convened their (nomination) meetings”. At the same time, Ramaphosa lobbyists claimed they had already obtained nominations from 2,500 ANC branches, and were thus well on the way to securing a majority of the 5,240 delegates expected to attend the ANC’s elective conference. The stakes, however, have never been higher, so the result is impossible to predict.
The ANC delegates’ choice next month will go some way towards answering the question “quo vadis, South Africa?” It will not, however, tell the whole story, as South Africa has strong public and private institutions, which will, under whatever political leadership, continue to help shape the country’s economic destiny.
 World Economic Forum, Global Competitiveness Report 2017-2018, 26 September 2017, p 1.
 Id, p 268.
 See, for example, President Jacob Zuma, Opening remarks by at the meeting of the Presidential Labour Working Group, Union Buildings, Pretoria, 21 June 2016.
 See President Jacob Zuma, State of the Nation Address, Joint Sitting of Parliament, 9 February 2017: “Today we are starting a new chapter of radical socio-economic transformation. The state will play a role in the economy to drive that transformation… Government will utilise to the maximum, the strategic levers that are available to the state. This includes legislation, regulations, licensing, budget and procurement as well as Broad-based Black Economic Empowerment Charters to influence the behaviour of the private sector and drive transformation.”
 See Dr Nkosazana Dlamini-Zuma, “Building a South Africa that we all aspire to have”, Address at the Gordon Institute of Business Science, 29 August 2017: “[S]trategic sectors of the economy need to be owned by the people collectively through democratic state ownership… These changes in economic control will have to be accompanied by wide-ranging legislative reforms that must always be orientated towards giving increased economic control to a broad base of the black (African) majority… The bridge that needs to be built… cannot be constructed by White Monopoly Capital in a free market, it will only come about through deliberate government intervention…”
 Deputy President Cyril Ramaphosa, “Unpacking Radical Economic Transformation”, Address at the Gordon Institute of Business Science, 20 June 2017: “We now know that some highly paid PR specialists contrived a plan to use terms like “radical economic transformation” and “white monopoly capital” to launch a publicity offensive in defence of their clients… It has therefore become accepted in many quarters that the term “radical economic transformation” is often deployed to either mask or justify activities that could best be described as state capture… Radical economic transformation is, in essence, about building a more equal society through sustained inclusive growth… [It] will not be achieved without a massive increase in the number of South Africans who are employed. Job creation remains the most effective driver of inclusive growth, the most direct route out of poverty, and the best way to address inequality… However, jobs will not be created in any significant quantity unless the economy grows at a much faster rate. And the economy will not grow unless there is significant investment in productive activity. It must therefore be a matter of great concern that the country is in recession, that business confidence has declined, and that our sovereign credit rating has been downgraded.”
 World Economic Forum, Global Competitiveness Report 2017-2018, 26 September 2017, p 314-315.
 Id, p 68. South Africa ranks 30th for market size, 37th for business sophistication, 54th for technology, 39th for innovation, and 61st for infrastructure (id, p 268).
 Id, p 69. South Africa ranks 69th for government debt, 95th for gross national savings and 105th for inflation (id, p 269).
 Id, p 69. South Africa ranks 56th for property rights, 74th for policy transparency, 89th for regulatory burdens, and 103rd for government spending efficiency (id, p 269). Notably, however, South Africa remains one place ahead of Botswana for its legal framework for settling disputes (31st) and for challenging regulations (36th).
 Daron Acemoğlu, Simon Johnson and James Robinson, “An African Success Story: Botswana”, Massachusetts Institute of Technology Department of Economics Working Paper No. 01-37, July 2001, 32-33. See also Daron Acemoğlu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty, Profile Books Ltd, London, 2012: “Secure private property rights are central, since only those with such rights will be willing to invest and increase productivity. A businessman who expects his output to be stolen, expropriated, or entirely taxed away will have little incentive to work, let alone any incentive to undertake investments and innovations.”
 Section 25 of the Constitution provides as follows: “(1) No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property. (2) Property may be expropriated only in terms of law of general application – (a) for a public purpose or in the public interest; and (b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court. (3) The amount of the compensation and the time and manner of payment must be just and equitable …”
 UNCTAD, World Investment Report 2016, 22 June 2016.
 World Economic Forum, Global Competitiveness Report 2009/2010.
 The EPA was signed on 10 June 2016. Pending ratification by all twenty-eight EU Member States, the EPA provisionally entered into force between the EU and the SADC EPA State Parties (excluding Mozambique) on 10 October 2016. Mozambique subsequently ratified the EPA on 28 April 2017.
 South Africa would, however, be obliged to exempt certain volumes of exports from the proposed tax or duty: for the first six years, an annual amount equal to the average volume of exports to the EU of the product over the three preceding years; and, from the seventh year, half of that amount.
 UNCTAD, World Investment Report 2017, 9 May 2017.
 Presidency of the Republic of South Africa, “Finance investment roadshow”, Press Release, 27 March 2017.
 See Robert Laing “The Mining Charter vindicates the downgrade, says Fitch”, Business Day¸20 June 2017.
 See, for example, Executive Council, Western Cape Legislature, and Others v President of the Republic of South Africa and Others 1995 (4) SA 877 (CC), para 51; Justice Alliance of South Africa v President of Republic of South Africa and Others 2011 (5) SA 388 (CC), paras 53-65.
 See Dawood v Minister of Home Affairs 2000 (3) SA 936 (CC), para 42.; and Janse van Rensburg v Minister of Trade & Industry 2001 (1) SA 29 (CC), para 29.
 S v Hoho 2009 (1) SACR 276 (SCA), para 29.
 Hilary Joffe and Sunita Menon, “Gigaba budget puts SA on brink of junk”, Business Day, 30 October 2017.
 “ANC battle for numbers hots up”, News24, 19 November 2017. Mpumalanga is in the lead, after 96 per cent of its branches concluded their nominations, followed by the pro-Ramaphosa Northern Cape with 94 per cent. The ANC’s biggest province in terms of membership, KwaZulu-Natal (the home province of President Zuma and Nkosazana Dlamini-Zuma), has to date recorded the lowest progress at 41 per cent.