ANC commits to orderly land reform

South Africa’s ruling African National Congress pledged to tackle land reform responsibly as investor concerns mount over plans to change the constitution to allow for expropriation without compensation.

“We will not and will never subscribe to land grabbing in South Africa, we are orderly and we are organised in what we do,” Fikile Mbalula, the ANC’s head of elections and a member of the party’s decision-making National Executive Committee, said at a meeting with agricultural lobby group Agri SA in Pretoria on Friday. “We’re after a constructive resolution on expropriation of land, which now will include non-compensation.”

The move to amend the constitution has added to wider emerging-market jitters in knocking the rand and South African bonds. Critics of the plan and investors have raised concerns that the move could lead to an erosion of property rights and ultimately, Zimbabwe-style farm seizures.

The ANC decided at a conference in December that more needs to be done to correct racially skewed land ownership patterns dating back to colonial and apartheid rule. While there’s widespread consensus that land reform needs to be accelerated, there are widely divergent views as to how it should be done.

Provide certainty

Ronald Lamola, who also sits on the ANC’s national executive, said it was accepted that the government had failed to effectively address land restitution and that the current situation had created uncertainty for citizens and financial markets — something the ruling party is seeking to address.

“There must a mixture of ownership,” he said. “We have to be able to give some certainty with regards to property rights.”

Government data shows more than two-thirds of farmland is owned by whites, who constitute 7.8% of the country’s 57.7 million people. South Africa’s constitution currently permits land expropriation in the public interest. A parliamentary committee is considering possible amendments that will make it easier for the state to take land without paying for it.

Officials from lobby group Business Unity South Africa, the Banking Association of South Africa and Nedbank, the country’s biggest provider of commercial property finance, appeared before the panel in Cape Town on Friday, and warned that tampering with the constitution would have dire economic consequences.

Land redistribution has been frustrated by the insufficient coordination within the government, an incoherent legal framework, maladministration and a lack of training and capacity, said Tanya Cohen, BUSA’s chief executive officer.

Meaningful reform

“That’s not a failure of the constitution,” she said. “We don’t believe constitutional amendments are necessary for meaningful land reform.”

Nedbank Chief Executive Officer Mike Brown said the erosion of property rights would increase risk for banks, forcing them to raise lending costs, and could ultimately trigger a banking crisis.

“The constitution already strikes a careful and well-considered balance between the need to protect property ownership with the need to ensure land reform,” Brown said. “There is no deficit in the legal powers provided to the state by the constitution and in existing legislation to expropriate property for land reform purposes. However, they have not been adequately promoted and enforced.”

The ANC is seeking widespread expropriation and land will only be taken in “certain instances” and after negotiation, Enoch Godongwana, the ANC’s head of economic transformation, said in an interview on Thursday.

Farmers are committed to working with the party to ensure there is food security and regional stability, according to Phenias Gumede, Agri SA’s vice president.

“We want to create jobs, we want to develop thousands of black farmers in the country,” he said at the Pretoria meeting. “We must set our farmers at ease, that they too have a seat at the table.”