LETTER: Land expropriation harms investment
Expropriation without compensation may not be an attack on investors, but it is an attack on investment
It is distressing when governments pursue counterproductive policies. It is embarrassing when it is feebly justified. Both impulses were on display in President Cyril Ramaphosa’s recent performance in parliament “Nothing sinister about nationalising Reserve Bank, says Cyril Ramaphosa”, (March 7).
Land expropriation without compensation may not be an attack on investors, but it has shown itself to be an attack on investment. It’s doubtful that anything else in the past year has done as much damage to the country’s prospects as this policy discussion, not least the president’s own endorsement of the idea.
“We cannot invite people to invest in our country then say we will expropriate what you invest,” said the president. Yet this is not without precedent, here or internationally. Escalating empowerment demands and custodial takings have already done as much. Proposed legislation — in the security industry, for example — seeks even more. This is not, nor is it likely in the future to be, limited to land.
Meanwhile, the draft Expropriation Bill and regulations gazetted in terms of the Property Valuation Act considerably reduce the state’s liabilities when seizing private property, along with the entitlements of those subject to this. For foreign investors, the cancellation of bilateral investment treaties represents a similar downgrade of protections.
It is difficult to imagine what will be taken without compensation if not investments. It does the president no credit to try to dodge this, and the implications for the country.
Project Manager, Institute of Race Relations