Proceed cautiously with land reform, Mr President

Theuns Eloff writes that one can have economic growth or expropriation without compensation but not both

Proceed cautiously with land reform, Mr President

15 January 2018

In the annual 8th January statement (delivered on the 13th January this year), ANC president Cyril Ramaphosa spelled out the central tasks of the ANC for 2018. He covered a wide range of themes and topics, and it is apparent that this is (as usual) not a piece drafted by the ANC president himself. There is the usual rhetoric about the National Democratic Revolution and the gains made in regard to its goals during the last number of years.

Nevertheless, a careful reader will discern Ramaphosa’s hand and that of his close allies in a number of issues and the way they were presented and emphasized. Both the selection of these, as well as the way in which they were framed, are a far cry from those highlighted in the 8th January statements of the last nine years. At least three such issues can be distinguished, namely the economy, corruption and land reform. This article looks briefly at the first two and then continues to focus on land reform and property.

With regard to the economy, the statement offers a fresh approach, totally different for the Zuma years:

Our vision is an economy that encourages and welcomes investment, offers policy certainty and addresses barriers that inhibit growth and social inclusion. Our commitment is to build strong partnerships in which efficient and accountable government agencies, responsible citizens and businesses, effective trade unions and civil society work together for the common good.”

There is no reference here to the notorious and over-simplified notion of radical economic transformation, meaning take from the (white) rich and give to the (African) poor, but rather welcoming investment, policy certainty and removing barriers to growth and social inclusion. The same is true of the statement’s reference to much needed collaboration between social partners and a candid acknowledgment that the governing party has not sustained these partnerships in recent years.” A better grasp of the complexities of the economy comes through in the statement that South Africa needs a multi-faceted growth strategy. The sectors specifically mentioned include manufacturing, tourism, agricultural and mineral resources. 

With regard to corruption and state capture, the statement portrays the strongest conviction and direction yet:

We shall confront corruption and state capture in all the forms and manifestations that these scourges assume. This includes the immediate establishment of a commission of inquiry into state capture. The investigation and prosecution of those responsible will be given top priority”.

This is not seeking unity at all costs, but unity built on principles, without corruption and state capture - and without those who are part of that. For the first time, a commitment is made to prosecution of those responsible. This is progress.

Land reform (and by implication property), is not mentioned in the list about the ANC government’s achievements of the last two decades. It is pointed out that land dispossession has contributed profoundly to poverty, hardship, unemployment and social dislocation. It is acknowledged that the pace of improving security of tenure and undertaking land restitution and redistribution had been too slow and its impact limited; and that there had also not been a sufficient link between the return of land and the provision of support to beneficiaries. Importantly, the pursuing of the decision to expropriate land without compensation will be done in a manner that not only meets the constitutional requirement of redress, but also promotes economic development, agricultural production and food security”.

The good news is that there is an acknowledgement that all is not well with the present implementation of land reform programmes, including appropriate support to beneficiaries. The earlier announcement by Ramaphosa to investigate the reasons for failure of these programmes is a good start.

It is also significant that the implementation of land reform is qualified by a reference to the constitutional requirement of redress (my emphasis), as a reminder that the Constitution remains the highest law of the land and that it does contain measures of redress. More importantly, land reform should promote (my emphasis) economic development, agricultural production and food security - it should be more than not harming it, but should actively promote it.

The second piece of good news is that the statement announces that the ANC will “pursue the enormous potential of agriculture to promote industrialisation, create employment and transform our economy”. This will have the effect of improving food security, developing agro-processing, manufacturing of agricultural inputs and increasing exports. This goes beyond a blind pursuit of expropriation, but considers the economic effects of agricultural development positively and could signal good news for a sector often ignored or even criticized by government and wracked by drought and an often-unfriendly administrative environment.

In the summary of the tasks for the ANC in 2018, a last comment is made about land reform and agricultural development. The approach would be a comprehensive one that “utilises a range of mechanisms to accelerate the redistribution of land to black South Africans and to provide the necessary support to ensure that this is accompanied by an increase in agricultural production and food security”. This is constructive language. Given the conference resolution the last message is that the NEC “will develop proposals with regard to expropriation of land without compensation as part of the mechanisms available to government”. Interpreted positively, this could even mean that expropriation without compensation may not be implemented.

One can detect the hand of the new president in 8th January statement. It is, however, also common cause that he is walking a tightrope with the two main factions in the ANC, and therefore it is too early to see a fundamentally different ANC emerging or to declare victory for the constitutionalists.

Be that as it may, the issue of land reform and expropriation without compensation looms large in the national discourse. It would serve the rational leadership of the ANC well to consider the following salient points in this regard:

- The “hunger for land” is primarily for a place to settle, to build a house, to belong, and not necessarily to farm. This is borne out by the fact that more than 70% of all successful land claimants preferred the cash and not the land, according to a number of national surveys. It would therefore, make sense to move speedily with giving land and tenure to citizens living in and around cities. This will address a large part of the land hunger and give space for macro land reform initiatives to be prepared.

- Section 25 of the Constitution is, in its present form, adequate to address the need for land reform - as long as there is the political will and concomitant capacity to do so and give support to new farmers. Indeed, the second part gives the state a responsibility to drive land reform, with compensation. The Land Claims Court’s willing buyer, willing seller principle has - according to the in-depth land audit done by AgriSA in 2017 - proven to be very successful. By and large, this did not apply to state driven restitution, mainly because of inadequate support for new farmers, and the fact that in most cases title deeds were not given to claimants, but the land held in trust by the state. This prevented new land owners from accessing much needed capital to develop their newly acquired properties.

- The economy will be harmed and actually has already suffered some harm, because of the December resolution. Investors will not come to a country where security of title is not guaranteed by the Constitution. It may technically be possible to acquire the two thirds majority needed to change section 25, but it would violate a variety of international legal principles. Furthermore, there are no successful international examples of expropriation without compensation in recent history. On the contrary, Zimbabwe and the former Soviet Union point to the exact opposite.

Ordinary South Africans may be willing to support you in your most difficult task Mr President. We understand the polarities you have to deal with. But we implore you: proceed with caution in the field of land reform. Private ownership, and the protection thereof, are sacrosanct in all countries of the world where economic growth is sought and greater equality achieved. It will not be different for South Africa.

Theuns Eloff is Executive Director, FW de Klerk Foundation.