Despite news of the adoption of the report to amend Section 25 of the Constitution to allow Land Expropriation without compensation, the value of the rand had been steady.
At the close of local trade on Thursday, 15 November 2018, the rand was 0.5 percent stronger at R14.25 to the US Dollar. And overnight, the rand traded stronger, and on Friday is expected to remain in the R14.00 and R14.30 range against the greenback.
The controversy around the United Kingdom’s Brexit plan continues to overshadow the controversial land reform debate in South Africa. Markets, especially those who trade the South African currency, are squarely focused on the UK, as uncertainty remains over UK Prime Minister Theresa May’s ability to push through a credible Brexit deal, following the resignation of two cabinet ministers.
Even with the focus being on the UK, the governing ANC’s plan to expropriate land for redistribution was, however, flagged as a credit risk by Moody’s Investors Service. In a report on Thursday, 15 November 2018, the ratings agency said government policy predictability is becoming less certain ahead of elections in 2019.
The motion to change Section 25 was set by the Economic Freedom Fighters’ Floyd Shivambu and 12 out of 16 votes were in favour of it. However, other opposition parties including the Democratic Alliance (DA), Congress of the People and Freedom Front Plus are not in favour of a constitutional amendment, and are gearing up for a legal fight in the country’s courts.
The DA said in a briefing on Thursday, 15 November 2018, that the adoption of the report was flawed and an attempt to expedite election prospects of the ANC and EFF.