Land expropriation without compensation is an economic time bomb that could shatter investment confidence and seriously affect agricultural production, and thus exports. Dan Kriek, president of agricultural body AgriSA, has labelled last month's African National Congress (ANC) announcement that it would amend Section 25 of the Constitution to allow for expropriation of land without compensation as economic suicide. He said the agricultural sector had been the best performer across the first three quarters of 2017 and the largest contributor to South Africa’s 2% GDP growth in the third quarter. “If expropriation without compensation is allowed to continue, financial markets will undoubtedly divest from South Africa and investor confidence will be shattered,” said Kriek. He told FTW that there was “no rational basis” for this decision by the ANC. “The High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change, led by Kgalema Motlanthe, recently found that the biggest challenge standing in the way of land reform was not the property rights clause, but the implementation of land reform policies, procedures and extended entrenched corruption in the system,” Kriek said. He added that AgriSA had already developed a strategy that included funding models and “agricultural realities” that would enable successful transformation in the agricultural sector. “We have consistently been asking for security of tenure and property rights for rural communities and emerging farmers and it is time that the ANC sees this as an opportunity to empower new entrants to the agricultural sector and unlock funding mechanisms,” Kriek commented. He added that from a strategic point of view the whole land reform programme was unsuccessful. “And destroying current production is a poor strategy,” Kriek said, noting that the organisation wanted to discuss the ANC’s decision with its newly elected president, Cyril Ramaphosa. “We want to expand investor confidence and investment in the agricultural sector to reach our goal of creating jobs as defined in the National Development Plan (NDP),” Kriek said. While some political players, such as the Economic Freedom Fighters (EFF) and the Pan Africanist Congress of Azania (PAC), have supported the ANC’s announcement, many opposition parties have vowed to fight this decision “tooth and nail”. Bantu Holomisa’s United Democratic Movement (UDM) has urged the ANC to arrange a summit – which would include all stakeholders, including political parties, business, agricultural and civil rights roleplayers – to explain their decision. “The summit, in considering land expropriation, should also address the direct and indirect impact of land decisions on the economy, poverty, unemployment and even education,” said Holomisa. Bulelwa Mabasa, director at Werksmans Attorneys, said eradicating the notion of compensation would not make expropriation any easier. “There is no legislation or policy that obliges the state to provide institutional and financial support to those awarded with land. The current track record is woeful,” commented Mabasa, adding that there had been no indication on how investor confidence would be boosted and/or encouraged under the circumstance. “The pronouncement has also come in the context of a serious skills deficit in relation to land in general,” he pointed out. In his maiden speech after being elected as president of the ANC, Ramaphosa emphasised that the ruling party’s programmes of land reform and rural development – as part of the radical economic transformation (RET) programme – needed to “be done with care to avoid undermining the economy, agricultural production and food security”.
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If expropriation without compensation is allowed to continue, it would amount to no less than economic suicide. – Dan Kriek
