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As a proposal to seize white-owned farms looks set to upend Mandela’s post-apartheid vision, businesses warn it puts more than just race relations in jeopardy. By Donald Paul in Cape Town.

The so-called ‘willing buyer, willing seller’ model negotiated by Nelson Mandela and South Africa’s last white president, F W de Klerk, could soon be consigned to history.

The ruling African National Congress (ANC) is likely to support an amendment to the country’s constitution that would allow the seizure of private land without compensation.

Minister for Public Works and Infrastructure Patricia de Lille defended the new Expropriation Bill, which was drawn up to amend Section 25 of the constitution, in order to introduce land expropriation without compensation.

The bill, which has been driven by pressure from smaller hard-left parties, has been in the works for several years and has generated more than 200,000 written submissions in favour and against.

Matthew Parks, parliamentary coordinator for the ANC-linked Congress of South African Trade Unions (Cosatu), said that the bill and the amendment would speed up land reform, which had been ‘held to ransom’ by the high prices being demanded.

He said there should be no need to compensate those who had acquired the land through ‘apartheid-era appropriations’.

Land reform – and particularly the concept of expropriation without compensation – is an issue that has overshadowed South African politics ever since the end of apartheid in 1994. According to Parks, millions of South Africans are landless and living in informal settlements, something, he said, the bill will redress.

There has been a large push back against any amendment to the constitution from businesses, most notably from the Banking Association of South Africa (Basa), which represents registered banks in the country.

Banks have approximately R1.6 trillion ($112 billion) in land‚ commercial property and home loans.

Expropriation without compensation, it said, could spark an economic crisis, similar to the 2007/2008 global recession which was triggered by the downturn in land-based property in the USA.

Basa’s claim has been refuted by Tembeka Ngcukaitobi, a judge in the Land Claims Court. Speaking recently at a webinar organised by the Wits School of Governance, he said it was doubtful that ‘compensation on a targeted basis for specific classes of property will bring down the entire banking industry’.

Much of the discussion over land reform is being driven by the hard-left, ANC-breakaway party the Economic Freedom Fighters (EFF), whose deputy president, Floyd Shivambu, has said that the issue is non-negotiable.

The EFF, which is hoping to capitalise on South Africa’s sluggish post-lockdown recovery at upcoming municipal elections, is calling for the nationalisation of all land in the country, including all black-owned land.

The ANC has taken a less radical approach and has made a point of reassuring the Zulu royal family that it is not targeting the enormous tracts the family holds in trust for its subjects.

But the ANC has changed its stance on expropriation without compensation of white-owned land, having adhered to the ‘willing buyer, willing seller’ principle championed by its former leader Mandela.

It is thought the policy shift has been largely driven by fears over the EFF and the upcoming elections, scheduled for October this year.

The ANC faces a balancing act – making sure its voters don’t opt for the populist call of the EFF while ensuring that South Africa can continue to attract foreign and local investment.

The threat posed by expropriation without compensation is manifold as it speaks to the rule of law and the security of property rights.

Failure to attract and keep investments in the country will impact the urban poor severely, as witnessed in the once-booming Zimbabwe, whose land reform programme ushered in two decades of economic collapse, mass emigration and sporadic famine.

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