by Teresa Nogueira Pinto

In December 2018, South Africa’s National Assembly approved a motion to amend Section 25 of the constitution, making more explicit the possibility of expropriating land without compensation (EWC). Since President Cyril Ramaphosa took office in February 2018, land has assumed a prominent role in the political agenda. While Mr. Ramaphosa has repeatedly tried to reassure investors on the topic, the truth is that the push toward expropriation has entered an uncertain, perhaps irreversible, path.

‘Land question’

South Africa’s constitution already recognizes the government’s power to expropriate land, provided that it is for a “public purpose” or “in the public interest” and subject to compensation, which must be “just and equitable” and determined either according to the “willing buyer, willing seller principle,” or defined by a duly authorized court. Given these already wide prerogatives, any amendment of Section 25 will be seen by markets and investors as an attack on property rights, with direct and negative impacts on the country’s banking and financial systems.

The EWC debate can only be fully understood through two distinct but intertwined perspectives. The first is historical and political: as a difficult legacy of settler colonialism, “the land question” is an easy subject of political manipulation. Twenty-five years after South African independence, the promise of a prosperous “rainbow nation” is perceived as increasingly out of reach, while politics and the economy are becoming more, not less, racialized. As has already been seen in Zimbabwe, politicizing and racializing the land question can have disastrous effects. Politically motivated land reform in South Africa’s northern neighbor ended up leading the country’s economy to a total collapse.

The second perspective is economic. Following the troubled presidency of Jacob Zuma (2009-2018), which fostered the process of “state capture” by the ruling elite and caused national output to shrink, the country’s economy has yet to recover. Growth remains weak, competitiveness is declining, and inequality and high unemployment (estimated at 27 percent) persist. The quality and efficiency of basic services have deteriorated and the country’s murder rate, among the 10 highest in the world, has increased for six consecutive years. In this context of frustrated expectations, many South Africans see land redistribution as the only means left to empower the country’s black majority.

Populist temptation

The growing disenchantment of South Africans with politics in general and with the ruling African National Congress (ANC) in particular suggests that uncompensated land seizure and the slogan of “radical economic transformation” are – like the land question itself – an emotional appeal born of political desperation, which in turn was caused by economic failure.

Although the ANC won the May 2019 general election, its share of the vote has declined over the past decade (from 65.9 percent in 2009 to 62.2 percent in 2014 and 57.5 percent in 2019). While the main opposition party remains the center-right Democratic Alliance (with 20.8 percent of the vote), the ANC has been losing ground to the Economic Freedom Fighters (EFF), the populist, radical left-wing formation of Julius Malema, which nearly doubled its result to 10.8 percent of the vote.

Mr. Malema – who declares that the time for reconciliation has passed and the hour of justice has struck – is the man chiefly responsible for politicizing the land question. It was his March 2018 motion for a constitutional amendment that forced the ANC to assume a position, albeit a less radical one than the EFF. Mr. Malema’s party calls for the complete abolition of foreign land ownership and the nationalization of all land, with half of it reserved for women and young people.

Changing society

Although many South Africans still see land in light of the colonial regime and the apartheid system, the truth is that South African society has changed over the past 25 years, as has land tenure. According to a 2017 Government land audit report, 72 percent of the country’s arable land is owned by whites, who account for approximately 8 percent of the population. However, another report released by AgriSA, an organization representing white commercial farmers, questions these figures and states that patterns of land ownership are shifting faster than the government admits.

The original target of transferring 30 percent of the arable land has been almost realized, according to AgriSA, not only through land redistribution schemes (under the willing buyer, willing seller principle) but also through market operations, as ordinary black South Africans buy property. Sales of farmland (white/white or white/black) have increased dramatically since the end of apartheid, with the rise in turnover transcending the settler/native divide.

At the same time, South Africa has urbanized: the share of its population living in cities has increased from 54 percent in 1994 to 65.5 percent in 2017. This means that the country’s most pressing economic and social challenges – rising poverty, inadequate infrastructure and services, unemployment – are found in urban areas, and will not be solved by land redistribution.

Regional perspective

The “land question” has taken different forms in Africa’s southern regions. In Zimbabwe, a chaotic land reform process kicked off in 2000, a year marked by a deep economic crisis and the emergence of the Movement for Democratic Change (MDC) as a direct challenge to President Robert Mugabe and the ruling ZANU-PF. The effects of Mr. Mugabe’s so-called Fast-Track Land Reform (FTLR) were long-lasting and disastrous. Violence and absolute disregard for property rights scared investors off, while insecurity over land tenure, a lack of skills and shortages of inputs deterred the new occupants from market production. According to the World Food Programme, between 2002 and 2003, 7.18 million Zimbabweans needed food assistance in a country that had once been a regional breadbasket.

The Zimbabwean experience – albeit extreme – demonstrates the impossibility of having one’s cake and eating it, too. The process of expropriation without compensation inevitably erodes the fundamental principles of a market economy.

Almost two decades later, Zimbabwe’s President Emmerson Mnangagwa – moved by the imperatives of economic realism – is trying to undo some of the FTLR’s damage. The government has announced its commitment to compensate owners for infrastructure and improvements made on the land (an estimated $17 million has been earmarked for this in the 2019 budget) and has offered 99-year leases to white farmers.

In Namibia, where land redistribution was based on the willing seller, willing buyer principle, the debate is following the South African path. Facing an economic contraction and general elections in November, President Hage Geingob has put land redistribution at the top of the agenda, stating that “careful consideration should be given to expropriation.” For now, the plan is to expropriate only underutilized farmland and farms owned by absentee landlords. However, this hypothesis has generated much criticism. While opponents of EWC fear the collapse of property rights, many of its defenders fear the process could end up enriching the country’s ruling elite.

Emotional issue

Recent events in South Africa suggest that the reason why former settler colonies should address – and close – the matter of land redistribution is primarily political. The issue is bound to resurface in times of economic hardship, rising inequality or whenever leaders feel their popularity threatened. Given its emotional resonance, it is almost certain to be exploited for political ends.

In contrast to Namibia, Zimbabwe’s exposure to the South African land question is mainly economic, since a protracted recession in South Africa would adversely impact an already disrupted Zimbabwean economy. President Mnangagwa will likely continue his efforts to reengage with Western donors, and symbolic compensation of white farmers is an important step in that direction. While there is internal resistance to this policy, it is not expecte