Cape Town – A roundup of Thursday’s top economic and finance reads on Fin24
Banks, land and expropriation
Banks could be some of the biggest losers if expropriation of farms without compensation takes place, with clients potentially defaulting on property loans they can no longer afford to service because they no longer have land.
On Tuesday the National Assembly adopted a motion, proposed by the Economic Freedom Fighters, for a committee to review Section 25 of the Constitution which concerns the right of property ownership. The motion was adopted with a vote of 241 in support, and 83 against.
But what exactly will happen to banks’ debt if a decision is taken to amend the land policy, is not clear at this early stage, experts have told Fin24. Banks are also taking a wait-and-see approach.
If the government decides not to compensate the banks when taking land, R160bn could be wiped off their books
Rand corrects on SA land issues and global factors
Following a recent rally on the back of political developments, global factors have set the rand on a path of correction.
The rand opened at R11.79 on Thursday, after trading weaker since Tuesday.
This followed the National Assembly’s adoption of a motion for land expropriation without compensation, analysts from NKC Economics suggest.
By 15:44 the local unit was trading at R11.91 to the greenback.
RMB economist Isaah Mhlanga explained in a market update that the rand’s movements are mainly influenced by global factors, particularly US dollar strength.
Lynne Brown quits as MP
The African National Congress’ parliamentary chief whip confirmed on Thursday that former minister of public enterprises Lynne Brown had resigned as a member of parliament.
Her resignation ends a four year spell at the National Assembly as an MP and minister. Her resignation comes about a week after Public Protector Busisiwe Mkhwebane found that she had unwittingly misled Parliament on Trillian and Eskom’s business relations.
Her resignation also comes as President Cyril Ramaphosa removed the former minister from his cabinet and replaced her with former finance minister Pravin Gordhan
Kganyago says SA leadership set on solid policy trajectory
South Africa’s new political leadership under President Cyril Ramaphosa sets a solid and credible policy trajectory, Reserve Bank Governor Lesetja Kganyago said.
“South Africans couldn’t have hoped for a better leader than the President we have now,” Kganyago said in an interview with Bloomberg TV in London on Thursday. “He is a serious constitutionalist, he understands the importance of the rule of law, having been at forefront of drafting the Constitution.”
Investor confidence started creeping back after the ruling African National Congress elected Ramaphosa as its new leader in December, paving the way for him to take over from Jacob Zuma when he resigned as the country’s president last month.
Eskom’s Sean Maritz dodges disciplinary hearing as he steps down
Eskom’s former interim CEO Sean Maritz has resigned from the power utility.
Eskom said in a statement on Thursday that by stepping down Maritz would no longer face an upcoming disciplinary hearing.
“Maritz’s resignation comes against the backdrop of serious charges of misconduct that were levelled against him, that would have been adjudicated at his disciplinary hearing scheduled for 8 – 9 March 2018,” Eskom said in a statement on Thursday.
“The disciplinary process to hold Maritz to account for any proven wrongdoing can no longer be pursued in light of clear legal precedent that a resignation by an employee unilaterally terminates the employment relationship,” it said.
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