Residents build shacks on a piece of land in Ezibeleni. Picture: SIMTEMBILE MGIDI
Residents build shacks on a piece of land in Ezibeleni. Picture: SIMTEMBILE MGIDI

The land debate is largely a political tactic to neutralise the EFF and radical elements in the ANC, BMI Research, a unit of Fitch Group, said on Wednesday.

In its outlook for SA’s agriculture sector, BMI said the call for expropriation of land without compensation was also about catering to black voters in the upcoming 2019 general elections.

BMI said President Cyril Ramaphosa, despite growing pressure from various political factions, had successfully maintained positive investor outlook with rating agencies Fitch Ratings, Moody’s and S&P Global Ratings, which held SA’s sovereign debt outlook at stable.

The ANC is pushing ahead to address the land question, uncertainty over which has already caused investor and market jitters.

The governing party partnered with the EFF in Parliament in February to vote through a motion supporting land expropriation without compensation, causing the rand to weaken and intensifying investor fear.

Investors feared damage to property rights and to the financial sector, as well as to the country’s food security.

Political analyst Somadoda Fikeni said it was unlikely that there would be any change in land policy before the elections. Only after the polls, when political parties knew where they stood, would the real bargaining start.

“The real question is how pragmatic will the real balancing act be in a manner which will both balance market sensitivities but also the constituency desires,” he said.

“It’s unlikely that the nation will return to business as usual because the fire is beginning to come from below, people say ‘we were promised this and that’. [They] will have to find a creative way, even though under siege and under pressure, to say how are we going to do this in a manner which is constructive,” he said.

BMI said Ramaphosa probably recognised that the land grabs that took place in Zimbabwe under the leadership of Robert Mugabe in the early 2000s could similarly trigger an economic downturn.

The president has cautioned against land grabs in SA, emphasising that the economy, food security and agricultural production had to remain intact.

BMI said based on Ramaphosa’s remarks, his “business-friendly profile” and commitment to improving investor sentiment, it believed that the president would favour practical solutions instead of Mugabe-style land grabs.

However, as the populist rhetoric intensified in the run-up to the election, which is said will be the most contested since 1994, Ramaphosa could be forced to compromise on the expropriation without compensation policy.

The ANC resolved at its Nasrec conference to adopt the policy of expropriation of land without compensation and work towards changing section 25 of the Constitution. Earlier in 2018, it held a land summit where it recommended the inclusion of expropriation without compensation in the Expropriation Bill, as it believed that the Constitution allowed the government to do so.

BMI had outlined three potential strategies.

First was that unutilised land or land that was held unproductively and purely for speculation purposes would be targeted.

Second, where land was actively farmed by labour tenants with no title holder, as is the case in many rural areas, the ANC would ensure that title deeds were transferred to workers, and third, that a large portion of land distribution would occur with government-owned land.

quintalg@businesslive.co.za

 

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