Introduction
The nationalizing of mines has been the on-going debate in South Africa, Mainly between the mineral minister Susan Shabangu and the ANC. The debate on the nationalization of mines has been the blame for foreign investors losing hope and faith in South Africa’s mining industry. According to the task team, the nationalizing of South Africa’s mines would be disastrous and that the increasing of taxes should be seen as an alternative option.
Why South African Mines should be nationalised
Former Youth League President Julius Malema and his supporters said that, Black majority In South Africa receives very little to nothing in South Africa’s minerals. Firstly, looking at what is nationalizing. Nationalizing is the process of taking an industry or asset into government ownership by a national government or state. According to Sapa from the mail and Guardian “BEE” is not capable of resolving the property questions, the ownership questions, the power questions in the South African Economy and Society.
What are the implications off nationalising the mines?
South Africa is the richest country in terms of producing platinum, chrome and manganese. Nationalizing the mines would just lead to investors loosing hope in the industry as it would not bring back a profit for them, and this is not good for South Africa’s revenue.
The Term Paper on South Africa 6
Afrikaans and English are the official languages. Afrikaans, derived from Dutch, is the mother tongue of the Afrikaners and the principal language of the Coloreds. More Afrikaners are bilingual than English-speakers. Most urban blacks speak English and Afrikaans in addition to their native language. The Bantu languages are not mutually intelligible. Many blacks speak Fanakalo, a lingua franca that ...
The nationalization of mines has not worked in any other country in the world and will not work in South Africa said The Chamber Of Mines. According to Jabu Maphalala , the nationalizing of mines has a potentially damaging impact on the economy.
Investment flows into South Africa would be diminished inhibiting economic growth, reducing employment opportunities and increasing the poverty rate in South Africa.
The Importance of Foreign Investments
South Africa’s business structure is generally well developed , and could be seen as a leading example of what other African countries should be like. Although South Africa’s business environment is still developing from the apartheid era, it needs as much help from foreign capital as possible.
Examples of Countries that have tried nationalizing
In 1905 the Italian Rail Ways were nationalized by Ferrovie dello Stato Italiane
Another country that has nationalised their mining sector was Zimbabwe. Zimbabwean minister Saviour Kasukuwear announced the plan of partially nationalizing the mining sector. At the time it seemed like a good idea to give a part of the mining sector back to the people , but the “land reform” should have been a sign to them as a precaution before any decisions were to be made.
In the year 2000, Zimbabwe took 110 000 square KM of land from farmers and gave it to the black people. Most of these lands ended up in the hands of President Mugabe’s party members’ hands. Agriculture production fell 3% in 2000to -3%.
The Reform movements in the US advocated specific nationalization. In the 19th century the people’s party proposed to break the monopolist control over freight rates of the railroads through national ownership of transportation
The Term Paper on Nationalisation of South Mines and the Npo Sector
Nationalisation of SA Mines and the Nonprofit Sector? Or While Nero Fiddles, Rome Burns. By Ann Bown, Charisma Communications. www.charisma.za.org. Ms Bown is a consultant to the nonprofit sector on matters of sustainability, fundraising and public relations. The Freedom Charter signed and sealed in June 1955 stated that the people shall share in the country’s wealth and more importantly ‘the ...
One of the first governments to initiate a complete nationalization of an industry was the Soviet Union. Nationalization was used by formerly colonial and semi-colonial countries to secure the countries natural resources against exploitation (e.g. the nationalization by the Mexican government in the 1920’s and 30’s of the country’s various mines and to safe guard Mexico’s vast oil deposit).
Why Nationalizing of mines is not the answer
“A policy of nationalizing mines would not be a “smart strategy” for South Africa and changes to taxes or ownership will only be made after extensive consultation with the industry”, Trevor Manuel
Nationalization of mines in South Africa has proposed a tax increase; it would worry investors looking to invest in South Africa mining sector, and perhaps in other South African sectors of business.
South Africa faces many challenges such as high unemployment rate, 50% being of youth aged between the ages of 18and 35, high levels of poverty where above20%of people lives under the poverty line. The mines bring in foreign investors and in turn, they bring in employment for South Africa, nationalizing the mines would just aggravate those statistics.
The unemployment and inequality challenge was a national crisis, not a mining issue, and would not be solved by nationalisation said the country’s Chamber of Mines, Bheki Sibiya.
The advantages of nationalisation of mines
