Nationalisation of the mining industry would set South Africa back 30 years and would not solve the country’s unemployment problem, Chamber of Mines chief economist Roger Baxter said on Wednesday.

Speaking at a Chartered Financial Analyst South Africa and Gordon Institute of Business Science conference, he said South Africa should not repeat the mistakes of its African counterparts, such as Zambia and Tanzania.

“The impact on South Africa would be devastating and would not solve the country’s unemployment challenges. The diagnosis might be right but the problem solving and the prescription around nationalisation might be wrong,” Baxter said.

On Tuesday, Mineral Resources Minister Susan Shabangu addressed, amongst others, the American Chamber of Commerce saying that nationalisation would not solve South Africa’s “evil triplets” of poverty, inequality and unemployment.

Baxter said that some 92% of the mining industry’s expenditure was located in South Africa. “Why would one believe that nationalisation will provide benefits, when the benefits are already captured locally.”

As one of government’s top-five priority sectors, what now remained key was growing the mining sector, he said, adding that it had declined by 1% yearly in the past 16 years.

The country’s mining sector remains one of South Africa’s “high export and foreign exchange contributors, supports job creation and is a gross domestic product multiplier”.

Tackling constraints, such as government bureaucracy, education in the labour force and inadequate infrastructure capacity, remained critical to the growth of the country’s economy, the mining sector and competitiveness, Baxter said.

Meanwhile, he added that amendments to the Mineral and Petroleum Resources Development Act were expected to be announced soon.

Changes to the Act would look to remove ambiguities, make provision for consultation processes, streamline the licensing processes and strengthen the law in areas where it allows the Minister to invite applications for mining rights in areas that were previously granted, issued, revoked or even expired.