S&P Global sees ANC taking moderate approach to land reform

The ANC might "talk left" but it does not necessarily "walk left", according to Gardner Rusike, a sovereign analyst at S&P Global Ratings. 

The global ratings agency is holding its annual South Africa conference in Cape Town on Thursday. It downgraded SA's sovereign debt to sub-investment grade in 2017.

During a panel discussion on SA's economic outlook, Rusike described the ANC as a moderate party.

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"Since 1994, they might talk left, but they do not necessarily walk left," he said.

While the ANC is addressing historical wrongs, it has ensured that necessary checks and balances are in place as it pursues land reform, Rusike said.

"I do not think the ANC will go ahead to expropriate land. If that were the case, we would observe it through the weakening of property rights and weaker enforcement of contracts."

Expropriation would be negative for investment and economic growth, said Rusike.  

In late 2017, the ANC adopted a resolution to amend the Constitution to make it easier to expropriate land without compensation.

The process has been referred to the sixth Parliament, which will be appointed after the national elections.

S&P rates SA’s foreign-currency debt at 'BB', two notches below junk, and while it has SA's sovereign rand-denominated debt is at 'BB+', the first rung of sub-investment grade.