Toronto - A senior South African business figure totally dismissed concerns about the nationalisation of mines in South Africa on Thursday, soon after the ANC suspended a key proponent of the idea.
Speaking following an event organised by the Canada-South Africa Chamber of Business, well-known mining executive
Bobby Godsell said the odds of the mines being nationalised were as remote as those of the Tea Party in the United States being able to abolish the US Federal Reserve.
"The youth league of the ANC has developed some unrealistic and unimplementable answers to some absolutely vital questions," said Godsell, the former chief executive of AngloGold Ashanti and a key member of South Africa's National Planning Commission.
The ANC on Thursday suspended youth wing leader
Julius Malema, one of the leading proponents of the mine nationalisation idea, for five years, accusing him of causing a rift within the party.
"The centre of gravity in the ANC is not there... To do it with compensation, you'd be talking about trillions of dollars, which the South African government doesn't have," said Godsell.
"And to do it without compensation, you need to amend our Bill of Rights, for which you need a 75% majority in the South African parliament, and I can see absolutely no chance of that majority being achieved."
South Africa is one of the world's top platinum and gold producers and Malema's calls for nationalisation of the mines to reduce poverty and inequality have rattled investors both within and outside Africa's largest economy.
Godsell said the extent of poverty, unemployment and inequality in South Africa is unconscionable, but the answers being put forward by Malema and his supporters are untenable.
"It is not possible to build a properly cohesive society with these levels of economic exclusion, so that something needs to be done, to me, is absolutely clear," said Godsell, who nonetheless remains optimistic about the growth prospects of both South Africa and the whole continent.
Godsell noted that for the last decade-and-a-half Africa has recorded the highest continental growth rate in the world, admittedly from a low base. This should only improve, helped by mining, infrastructure spending and investment in a still small energy sector.
"In the next decade, I'd imagine that African growth rates as a whole are going to be 2 percentage points higher than developed country growth rates. And in the better countries in Africa... growth rates will be as much as 4 percentage points above average growth rates in America, Europe or Japan," he said.
"The burgeoning middle class in Africa is also going to be an important driver of demand. Investment follows demand - it seldom anticipates it."
Highlighting details from a report to be released by South Africa's planning commission on Friday, Godsell said the country is taking the necessary action to curb rampant unemployment.
"In the long term, what South Africa needs over the next 20 years is growth at about 5%, and it could then reduce its unemployment rate from about 25% now to 6% by 2030," he said.