Too much mystery around land reform plans

Mar 5, 2018 | Local Property, News, Newsletter content

The real problem with the land expropriation motion is that it does not actually seek to speed up the transfer of land to any individual or group of owners, says Berry Everitt, CEO of the Chas Everitt International property group

Everitt says it seeks only to put more land in the hands of the state, which he says has an extremely poor track record when it comes to land reform and redistribution over the past 24 years.

“Most South Africans understand and support the urgent need to address historic injustices and achieve a much more equitable distribution of land, property ownership and wealth.

“Unfortunately, this motion has come with no plan attached about how the gross inefficiencies and corruption that have dogged the process so far will be addressed and fixed, or what the state intends to do differently going forward, using the considerable power and resources it already has at its disposal.”

Nationalise all property?

As a result, he says, the motion could all too easily create the impression that it is just the first move in a longer-term plan to nationalise all property in SA, and for everyone from famers to flat-dwellers to have to lease their land from the state.

“This certainly seems to be the vision of the Economic Freedom Front but this would destroy one of the pillars of the economy because banks would no longer be able to use land as security, for example for the working capital that farmers need every season.

“There would also be no underlying security for home loans, and this would deprive millions of ordinary South Africans of the only opportunity that most of them have to build up their personal wealth and financial security for their families.”

Jan le Roux, Chief Executive of Rebosa, doesn’t believe it is necessary to reiterate all the normal objections to the expropriation of land without compensation. “Property rights form the bedrock of a capitalist society and nobody can tamper with that without causing irreparable damage to rich and poor alike.”

Says le Roux: “I do however believe that we should take a step back in the current economic climate. President Ramaphosa has just taken over after the disastrous, despotic reign of Jacob Zuma and has an election to win next year. The DA managed to take votes from Jacob Zuma but will have an uphill battle doing the same with the current president. The most likely party to undermine the power of the ANC is the EFF. Letting this debate on property rights “move along” at the moment just about eliminates the EFF threat. My prediction (and hope) is that this may well die a quiet death in due course. As recently as last year the ANC, under Zuma was opposed to this. This is politics and electioneering.

“That does of course not mean that every possible objection should not be raised in view of the potential danger it poses.”

No threat?

Everitt says, he does not believe that nationalisation is the intention of the governing party, or that there is any need to panic in reaction to the expropriation motion – “not least because President Ramaphosa has emphatically stated several times that expropriation without compensation will only be supported when it poses no threat to agricultural production, food security or the financial institutions.

“However, the fact is that the motion to amend Section 25 of our Constitution, which is now under review by the parliamentary Constitution Committee, has already raised a red flag among the investors South Africa needs so badly if it is to achieve even modest success in growing the economy and reducing chronic unemployment. Government urgently needs to spell out its intentions and a clear plan for realising its land restitution objectives and agricultural/land reform programme.”