Cyril Ramaphosa, right, and Frank-Walter Steinmeier at the Tuynhuys, Cape Town, on November 20 2018. Picture: GCIS/KOPANO TLAPE
Cyril Ramaphosa, right, and Frank-Walter Steinmeier at the Tuynhuys, Cape Town, on November 20 2018. Picture: GCIS/KOPANO TLAPE

On Tuesday, President Cyril Ramaphosa moved to quell investor fears over expropriation of land without compensation, saying the land reform process will be undertaken in an orderly and lawful manner.

The expropriation without compensation matter threatens to derail Ramaphosa’s investment drive to boost SA’s ailing economy amid fears that property rights will not be respected. Last week, parliament's joint constitutional review committee resolved to officially recommend that the constitution be amended, to make it explicit that expropriation be one of the means to address the skewed land ownership patterns dating back to colonial and apartheid eras.

Ramaphosa hosted German President Frank-Walter Steinmeier in Tuynhuys, Cape Town on Tuesday. The German president is in the country for an official state visit.

During a joint media briefing with Steinmeier, Ramaphosa reiterated that the land question needs to be addressed, but said this should be done within the confines of the law and ensure that property rights are respected.

“There will be no land grabs. Investors should have no fear,” Ramaphosa said.

“We cannot invite people to come and invest and then take their investments. It is like inviting a guest to your home and then rob them of their possessions. We cannot do that. Investors should know that their investments will be secure. We are [working on] a land reform process so that we can have more stability. The more stability we have, the more everybody’s interest is safe guarded including everybody’s investment,” Ramaphosa said.

Steinmeier suggested that the issue of “dispossession” had to be addressed. Germany had to deal with the matter of dispossession when East and West Germany were reunited in 1990, he said. Steinmeier said SA’s renewed fight against corruption put the country in good stead in terms of attracting foreign investment.

Germany is SA’s third-largest trading partner. More than 600 German companies have subsidiaries or production plants in SA sustaining about 100,000 jobs.

“We agreed to continue our efforts to further expand trade and investment between SA and Germany,” Ramaphosa said.

“This provides a firm foundation to grow our economic relationship in line with our effort to significantly increase investment in the country and, as part of the Jobs Summit agreements, to develop our export capacity,” he said.

According to Prof Ben Cousins, the director of the Institute for  Poverty, Land and Agrarian Studies at the University of the Western Cape, the risks that a constitutional amendment might pose to investment by either South African or foreign companies depends on the nature of the amendment.

“If a sweeping amendment occurs that allows for confiscation of land on a large scale, and does not allow scrutiny by the courts on a case-by-case basis, then the risks of disinvestment are large. But such an amendment is unlikely to be carried, precisely because of the massive risks involved,” Cousins said.

He said if a minor clarificatory amendment is agreed, and at the same time strong political leadership begins to rethink policy and drive a reinvigorated land reform programme, then the risks of disinvestment are considerably reduced.

Cousins pointed out that the only constitutional amendment that is likely to achieve a two-thirds majority vote in parliament is a minor, clarificatory amendment that confirms what is already the case: that in some instances “just and equitable” compensation will amount to zero compensation.

phakathib@businesslive.co.za