Picture: REUTERS
Picture: REUTERS

President Cyril Ramaphosa’s announcement that the ANC had decided to change the Constitution to expropriate land without compensation could lead to constitutional challenges as it appears to pre-empt the ongoing public participation processes on the matter, a legal expert said on Thursday.

Ramaphosa made the announcement on national television on Tuesday.

Parliament’s constitutional review committee is still holding public hearings across the country on the matter, and is due to report back in September.

According to Peter Leon, a partner at international law firm Herbert Smith Freehills, Ramaphosa’s announcement may conflict with the Constitution’s requirement for meaningful public participation.

"It appears to conflict with the constitutional requirement that a bill amending the Constitution can be adopted only if there is a meaningful process of public participation. By presenting the ANC’s decision as a fait accompli, the governing party is impermissibly pre-empting this process, which in itself could lead to constitutional challenges," said Leon.

Peter Leon. Picture: RUSSELL ROBERTS
Peter Leon. Picture: RUSSELL ROBERTS

He said the announcement was troubling for SA as the country grapples with record unemployment, low growth, high inflation and declining foreign direct investment.

"The notion that expropriation of land without compensation will remedy inequality and advance economic development conflicts with the views expressed by the International Monetary Fund (IMF) earlier this week.

"According to the IMF, the government must address policy uncertainty if it wishes to address negative per capita growth, inequality and high levels of unemployment.

"Amending the Constitution to make explicit provision for expropriating land without compensation will do exactly the opposite," said Leon.

David Nathanson, a global equity specialist at Bellwood Capital, said respect for property rights was one of the most important determinants of a country’s success. Ramaphosa’s latest announcement added to the growing list of concerns facing South African investors, he said, chief of which are SA’s deteriorating fiscal position and the financial condition of its state-owned enterprises.

He said the matter again demonstrated to investors why it made no sense to be overexposed to any single country, more so one with significant political risks and tenuous property rights.

phakathib@businesslive.co.za