Conflicting policy signals about mine nationalisation are dampening investor enthusiasm, the South African Chamber of Commerce and Industry (Sacci) warned on Friday, appealing for leadership from the governing African National Congress (ANC).

CEO Neren Rau said that judging from engagements with the diplomatic corps and foreign investors, policy uncertainty and the issue of nationalisation have proved to be leading deterrents to greater investment in South Africa in recent years.

The nationalisation debate gained momentum this week with powerful labour federation, the Congress of South African Trade Unions (Cosatu) voicing its support for such a policy.

“Business has to date accepted the President’s assurance that nationalisation is not on the national agenda, but the open challenge to the view of the President from within his own party and the recent support given to nationalisaton by Cosatu, add to the conflicting messages,” Rau said.

He warned that the debate would dampen foreign investor enthusiasm at a time when worsening political crises and the financial woes of the European Union states would likely inhibit economic growth. The United Nations warned this week that austerity measures in countries such as Greece could threaten a global recovery.

“The combined impacts on the South African economy are likely to result in slower economic growth and an inability for business to contribute effectively to the national goals of job creation and poverty alleviation,” Rau said.

He said that the nationalisation debate was a leadership test for the governing ANC.

On Tuesday, tripartite alliance partner, the South African Communist Party general secretary Blade Nzimande said nationalisation was an attempt by the ANC Youth League to save black economic empowerment "elements in crisis", and would not help the poor.

But fellow historical tripartite alliance partner, Cosatu secretary general Zwelinzima Vavi advocated for the nationalisation of the mines and the banks at the federation's  fifth central committee meeting this week.

Further, the extension of the debate, by the ANC Youth League, to include expropriation without compensation, stood in stark contrast to the spirit and letter of the South African Constitution, Rau commented.

“It attacks the fundamentals of a free society including property rights, an independent central bank and a market economy.”

Last month, Business Leadership South Africa chairperson Bobby Godsell also said that the manner in which the debate was being conducted was eroding policy certainty and business confidence across the South African business landscape.