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Six myths underpinning the Expropriation Act
The African National Congress’s plan to change the property clause in our Constitution to allow the state to expropriate property without compensation (EWC) failed. However, President Cyril Ramaphosa has just signed the Expropriation Act which provides for nil compensation to be paid for land.
The act includes a list of cases, but is open ended.
However, it makes clear that no compensation will be paid where land is expropriated in the public interest under certain conditions. These include:
- Where the land isn’t being used and the owner’s plan isn’t to develop it or use it to generate income, but to benefit from the appreciate of its market value;
- Where an organ of state holds it and it’s not being used for its core functions and is unlikely to require the land for its future activities in this regard, and the organ of state acquired the land for no consideration;
- Where the owner has abandoned the land by failing to exercise control over it despite being capable of doing so; and
- Where the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.
The government alleges that EWC is necessary to restore land that was stolen during apartheid; to redistribute land so that home ownership matches racial demographics; and to appease an electorate that’s crying out for land.
President Ramaphosa not only claims that EWC won’t hurt the economy, but that it will bring more people into the fold by helping beneficiaries become farmers. Before adopting such a radical policy at a time when our economy has been devastated by the pandemic and lockdowns, we should do some much-needed myth busting.
Myth one: land hasn’t been given back to its rightful owners
South Africa has a dark history of land theft. Justice requires that the wrongs of the past are addressed by awarding compensation to the victims of land dispossession. Over the past 30 years, the land claims court has resolved more than 95% of the claims that have arisen. More than 1.8 million individuals have received compensation either in the form of land or money, and fewer than 3 500 claims remain unresolved.
Myth two: home ownership is skewed along racial lines
Amidst the cry for land reform is the claim that we need to have a more equitable distribution of land based on the country’s racial demographics. We should be suspicious of racial demographic thinking because it’s exactly what the apartheid government specialised in. However, for those who are sympathetic to it, the home ownership data demonstrates that racial groups own homes in almost perfect proportion to their numbers.
Myth three: people are crying out for land
When South Africans are asked about the country’s most serious unresolved problems, unemployment, crime, and education are at the top of the list, while racism and land reform are at the bottom.
When people win their land-claim cases, they are given the choice of receiving land or financial compensation. In 92% of cases, people choose money over land. This shouldn’t come as much of a surprise because money translates into freedom. Beneficiaries can use that money to start businesses, pay off debts, or invest in the market. The facts show that land isn’t a burning issue for ordinary citizens. It’s an issue being capitalised on by a few radicals with big loudhailers.
Myth four: anyone can be a farmer
The government spent more than R1.4 billion buying farms in the Eastern Cape to redistribute to aspirant farmers. Of the 265 farms purchased, only 26 remain viable. In 90% of those cases, once thriving farms that produced food and employment are now in ruin. Being a farmer isn’t easy. It’s a technical job that requires an enormous amount of time, expertise, and money.
Myth five: the Constitution impedes land reform
Section 25 of the Constitution provides a roadmap for land reform while ensuring that no-one is arbitrarily deprived of property. It empowers the state to expropriate property in the public interest, which includes land reform. A classic case would be the construction of the Gautrain project, which needed to run through privately owned land; or the acquisition of land to build RDP (reconstruction and development programme) homes. The Constitution recognises that in such cases, private owners deserve compensation and the following test is used:
The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including, the current use of the property; the history of the acquisition and use of the property; the market value of the property; the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and the purpose of the expropriation.
Myth six: EWC won’t damage the economy
This is akin to saying that a vow of celibacy won’t affect your sex life. Unfortunately, life involves trade-offs. You can’t remove property rights and have a flourishing economy. Foreign investors won’t risk having their land confiscated in South Africa when they can pick any number of other nations that will protect their investment.
One doesn’t have to look at Mao’s Cultural Revolution or the horrors of Stalin’s regime to know how bad this idea is. When Mugabe implemented EWC in Zimbabwe, it led to the world’s worst case of hyperinflation. It wasn’t just the original land owners that were hurt, the average man on the street was left destitute after the economy was annihilated.
Once the above myths about land reform have been revealed, the following becomes apparent. Almost all victims of land dispossession have been compensated. Homeownership matches racial demographics. Barring a few opportunistic politicians, almost no-one views land reform as a burning issue. The transfer of functioning farms to ill-equipped beneficiaries has been a spectacular failure. EWC has been tried in communist regimes around the world, and it has wrought riches for a few elites and devastation for everyone else. Ramaphosa’s resurrection of this terrible idea endangers the continuation of the Government of National Unity, and may ultimately lead to a vote of no confidence in his presidency being called.
- Mark Oppenheimer is a practising advocate and member of the Johannesburg Bar. He is the president of the South African Institute of Race Relations.
*All statistics have been sourced from the Institute of Race Relations.
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Jake
February 3, 2025 at 8:37 am
Common sense from a wise man who knows the topic at hand. The bill, it’s just an excuse for land theft how blind or naive can people be.
CHaim
February 4, 2025 at 12:50 pm
You can bury the heart of the matter in as much legalese as you wan and you can attempt to bully and intimidate with piles of legal documents that nobody has the time or inclination to read, but the simple truth is this and it may be an inconvenient truth – the whites stole the land from the indigenous people of South Africa and not only stole it but then brutally oppressed them, killed them, jailed them, marginalised them, and more. If I were running this country, and I am white, I would freeze the assets of every single white person in the country and then deport them. It is only by the grace of the African people that they still allow us here. So if I were any white person being indignant about expropriation laws and reverse discrimination, blah-blah-blah, I would put a sock in it and just be grateful they still let us breathe, walk, live, operate in their country. The fact that, what is it, after some 30 years of democracy the Africans in their own country are still cowtowing to the whites, are still being submissive and respectful, are still mostly earning minimum wage, being exploited and disrespected IN THEIR OWN LAND by people who invaded and stole it. WAKE UP. WAKE UP. WAKE UP.