IMF calls for clarity on land reform to reassure investors

Turning South Africa’s economy around toward strong and inclusive growth will require swift implementation of a bold reform agenda.

That was the message from the International Monetary Fund (IMF) which concluded a surveillance mission of the country yesterday.

“Removing policy and regulatory uncertainty, combined with forceful implementation of an ambitious reform agenda will further strengthen confidence, attract private investment durably, support job creation, and distinguish South Africa from other emerging markets at a time when sentiment towards emerging markets is weakening,” said IMF team leader Ana Lucia Coronel.

She noted that clarifying mining regulation to foster private investment and mitigating skills shortages by addressing onerous visa requirements for hiring skilled workers were reforms with a potential for quick payoffs and should be implemented immediately.

More wide-reaching reforms, which the IMF suggests should be promptly implemented, include an increase in private sector participation to support cost-effective energy distribution and transportation, improved efficiency of SOEs, and a reduction in red tape to lower entry barriers and strengthen competition.

Coronel added that government needed to clearly articulate policy and regulatory decisions related to land reform in a “fair, transparent, and market-friendly manner”. She said this would help to remove the uncertainty currently weighing on investor sentiment.

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