It is quite conceivable that after the start of a large-scale programme of seizures, the resultant administrative bottlenecks would produce an ideal pretext for nationalisation as the only feasible solution.
The report of the Presidential Panel on Land Reform was released last Sunday. Pensively awaited, it was perceived as providing a weathervane as to the direction that land reform – and the government’s determination to pursue a policy of expropriation without compensation (EWC) – would take. This looming threat to property rights is, after all, one of the most pronounced challenges to South Africa’s economic prospects since 1994.
News coverage of the matter has been predictably extensive, and sometimes surprising.
‘Land panel affirms property rights, limits expropriation’, declared a front-page story in a major daily newspaper on Monday. ‘New proposals on property rights prove land expropriation will be tightly controlled’, read a media release from a business organisation. A widely read online platform weighed in with ‘Nationalisation of land not on the cards – presidential panel member’, while another with a business slant offered ‘Why Cyril Ramaphosa’s land reform panel loves individual ownership of farms – and thinks group-farming is a quick way to make people poor’.
Upbeat headlines, these. Although others have been less sanguine, they represent a palpable sense of relief and optimism that, at the very least, the move on property rights won’t be all that bad.
As Geoff Jacobs, president of the Cape Chamber of Commerce and Industry remarked: ‘The new proposals on property rights and land expropriation make it clear that the process will be tightly controlled and this will go a long way to eliminate fears of disorder.’
The report is a large document, clocking in at around 132 pages. Its analysis and recommendations are multifaceted and complicated and will no doubt be discussed in depth in the weeks ahead. But its overall reality is likely to be a great deal less comforting than the optimistic impressions suggest.
The report does not advocate the nationalisation of all land in the country, and does pay its respects to the principle of property rights. It also does not advocate wholesale land seizures, at least not directly.
It endorses EWC – in the sense of paying ‘nil’ compensation – as a means to drive land reform. Perhaps more importantly, it posits the extensive expansion of state latitude to intervene in private property. These include suggestions for land ceilings, restrictions on foreign ownership of land, and land taxes.
The cumulative effect of these would be to degrade the substance of property rights. In some instances – such as the surrender of ‘surplus’ land after the imposition of land ceilings – this is quite likely to amount to EWC. So is the mooted compensation policy, which implies the seizure of a part of the value of expropriated land, and suggesting that the idea of compensation at market value will be rarely contemplated.
And proposals for acquiring land as part of municipal development plans will be backed by the threat of expropriation: ‘Individual owners of properties that meet the criteria of land required for redistribution, or for tenure upgrades for farm dwellers, may offer their land as donations, or enter into negotiations with the State, failing which the State may proceed to expropriate.’
One cannot help but see in this the implication that what municipalities want (‘with the input of local residents and the support of Department of Rural Development and Land Reform’), they will get. As my colleague Anthea Jeffery has remarked, this is fundamentally coercive.
To its great credit, the report does acknowledge the considerable governance failings of the country’s land reform measures – corruption, incompetence and so on. Indeed, these are problems of well-nigh the entire State system, not least its municipalities. They are also rooted in no small measure in the ideological preoccupations of the ruling party, notably the latter’s belief in the imperative of politicised as opposed to professionalised control of the State. These pathologies will not be addressed without a thorough rethinking of the way in which the State is managed. And the consequences for empowering the State – as it exists in reality – to do what is proposed will likely be dire. ‘Disorder’ is less a risk than a certainty.
For all this, there will likely be those who see in this document at least some certainty about the future. This, too, is premature. The panel’s report is not legally binding. It is intended to ‘advise’ policy options. Government may adopt its recommendations in whole, in part or not at all. (Consider that other expert contributions, such as on electoral reform, have languished unimplemented.)
However, it does accord with the broad thrust of the intentions of the ruling party and government, repeatedly affirmed: EWC is to be introduced, empowering the State, nominally in the interests of land reform (or to further ‘radical economic transformation’).
The report provides endorsement for this perilous path, and shunts the country along it. What should emphatically not be relied upon is this report acting as a limit to future action. There is nothing that prevents policy makers from accepting some of its recommendations, or its overall logic – and taking them further.
So, on one of the key concerns for property owners and business, it must be emphasised that the report in no way takes the nationalisation of land off the table. That is a decision the ruling party and government may take, and possibly will take, independently of what this report may advise. Indeed, there is ample evidence that this is a course of action with serious backing. And it is quite conceivable that after embarking on a large-scale programme of seizures, the resultant administrative bottlenecks – disorder? – would produce an ideal pretext for nationalisation as the only feasible solution.
South Africa would be well advised to be ready for this. There are many reasons to be sceptical of the advisory report. But it would be a tragic mistake to believe it to be the end of this challenge to South Africa’s future.
Terence Corrigan is a project manager at the Institute of Race Relations.
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