IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBenefit Administrators & Investment Managers
IconBusiness Chambers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconEducation and Training
IconHuman Resources
IconInformation Technology and Software Partners
IconPension Fund Trustee Liability Insurance
IconPension Fund Trustee Training
IconPension Funds Adjudicator
IconPolicy Administration
IconPolicy Trading
IconRegulatory Authorities
IconRetirement Funds registered by the FSB
IconRetirement Products
IconSocial Grants (Government)
IconSurveys and Research
IconTraining Courses & Workshops
IconTrust Establishment & Management
IconWellness Programs
  Subscribe To »

Land expropriation - A calming perspective






Company Listing: Today's Trustee »






Stop the panic over EWC, urges veteran analyst Max du Preez. Sharing an insider’s ear, he highlights practical realities 





To take the sting out of the heated land-reform debate and to avoid large-scale expropriation without compensation (EWC), President Cyril Ramaphosa is likely to focus on low-hanging fruit and easy wins.

Land expropriation is a key issue in the ANC campaign for the 2019 election. If Ramaphosa does nothing to satisfy the clamour for expropriation, he and his party will pay the price. But if he gives in to the wild demands, he will destroy the economy -- deepen poverty and unemployment, possibly even trigger a revolt.

Ramaphosa, a member of his inner circle reassures me, knows this well. He’s determined to navigate his way carefully to what he calls a “win-win” solution.

Some basic facts

SA’s total surface area covers 122m hectares. Of this, 67% is commercial farmland. Communal black areas (the former homelands) take up 15%. State land– comprising conservation areas, schools, hospitals and the like – takes up 10%.

The remaining 8%, where about 60% of the population and 95% of white citizens reside, is urban and peri-urban. The eight metropolitan areas constitute only 2%, but 38% of the population lives in them.

In 1994 the Mandela-led ANC government launched two processes: a restitution process whereby direct descendants of people who were dispossessed of land after June 1913 could either get back the land or receive financial compensation for it (most preferred the money); and redistribution, to establish new black farmers on land.

On land redistribution, government then set a target of 30% of the land to be given to black farmers by 2014. This makes little sense as the agricultural value of land can differ vastly. For instance, 10 hectares of vineyard in Franschoek can buy you 10 000 hectares in Beaufort West.

Government says it has redistributed about 8% of the land since 1994. Redistribution alone cost R55bn. If this amount were used simply to buy farms advertised as being for sale, the target of 30% would have been reached. Clearly, billions of rand disappeared through corruption, wastage and maladministration.

Opinion surveys indicate that only about a third of black citizens want to own land for food production. Most of these people are rural or recently urbanized, each wanting less than five hectares.

How does this tally with the hectic land debates? Well, the land question is not in essence a farming issue. It is about history, symbolism, justice and black pride. For some – notably the EFF – it is an issue of punishing white people for the wrongs of the past.

More importantly, it is about urban rather than agricultural land. No farms are being invaded, but illegal urban land occupations now happen weekly. This is a result of the massive urbanization of black people from communal areas to urban areas during the past two decades. That two-thirds of South Africans are urbanized is by far the highest proportion in Africa.

During the decade to end-2010, the number of people in Gauteng grew from 9,4m to 12,8m (an increase of 31%) while the Western Cape population grew from 4,5m to 5,8m (an increase of 29%). Most of these incomers had low levels of education and skills. Government never tried sufficiently hard to plan for and cope with this urbanization, so massive squatter camps sprang up.

After its ‘land summit’ in May, the ANC decided to prove through a test case or two that the expropriation of land with little or no compensation is completely within the parameters of the present Constitution. It will also launch an ambitious plan to give pockets of state-owned urban land to the landless, offering title deeds and permission to build their own homes.

New legislation is being prepared to outline future processes of expropriation and land redistribution. Ramaphosa has also roped in Roelf Meyer, his Codesa buddy, who is leading a group of wealthy, progressive farmers to launch their own land-reform scheme.

There are instances where EWC makes sense. Examples are the derelict buildings in Johannesburg’s CBD and Hillbrow that have been abandoned by their owners. These buildings could, once renovated, house thousands of families. Another example is pieces of land on the Cape Flats that had been used for sand mining and then left deserted.

An interesting case could be the strategically-placed Ysterplaat air base between Century City and Milnerton in the Cape. It was part of a huge swathe of land bought in the late 1800s by entrepreneur Sir David Graaff, later a cabinet minister.

In 1944 the Graaff Family Trust leased the land for a tiny annual sum to the Union government for a military airfield. The deed of transfer stipulated that, once government stopped using it for this purpose, the land would return to the trust.

The land, on the N1 and close to the Cape Town CBD, is perfect for an affordable housing project by the city. If the trust insisted on sticking to the deed’s provisions, the state could expropriate the land in the public interest (as the Constitution allows) and argue in court that it shouldn’t pay anything near present market value.

A tougher nut to crack, at least politically, would be reform of the black communal areas by taking away some powers of the traditional leaders and giving people title deeds to individual units.

If, in the worst-case scenario, the ANC and EFF combine in parliament to change the Constitution, arbitrary expropriation will still not be possible. The rule of law is enshrined in the founding principles of the Constitution.

A parliamentary majority of 75% is needed for amendment. So, whatever happens, if the state expropriates your property, you are guaranteed access to the courts.

At present the state owns more than 4 000 commercial farms which it struggles to distribute to aspirant farmers. Around 80% of farms, already distributed, have failed miserably because there’s a lack of post-settlement support and training.

Even if it’s armed with a changed Constitution, the state simply lacks the capacity to dish out expropriated land. Neither does it have the capacity to defend EWC actions in court.

There’s no need to panic. At least, not yet.

Source: Today's Trustee
« Back to previous page Print this page » |

Breaking News »

Associated Compliance Newsletter 068 – August 2018

The August 2018 Associated Compliance Newsletter has been published in the Insurance Gateway® Knowledge Base. The compliance landscape has become increasingly time consuming and complex to navigate. It will ...
Read More »


Importance of RE Qualifying Criteria

In response to a recent enquiry from a candidate, it is important to highlight the absolute necessity to ensure that you take into account the qualifying criteria when preparing for the regulatory exams. Firstly, ...
Read More »


Black Business Growth Funding a win-win for financial sector black empowerment

The financial sector has four months left in which to shore up ownership and empowerment financing scores for 2018 against the targets of the Amended Financial Sector Code (FSC) by making use of the new alternative ...
Read More »


Bright Africa continues to shine

Africa continues to turn global investors’ heads, despite its challenges. Attracted by its many fast growing economies and burgeoning consumer and business spending – expected to reach US$6. ...
Read More »


More News »


Healthcare »


Investment »


Life »


Short-term »

Advertise Here
Advertise Here

From The Glossary »



One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics.
More Definitions »

By using this website you agree to the Terms of Use.
Copyright © Stoker Risk & ICT (Pty) Ltd 2004 - 2018.
All Rights Reserved.





Contact IG


Media Pack


RSS Feeds