Picture: 123RF/LOES KIEBOOM
Picture: 123RF/LOES KIEBOOM

Foreign direct investment (FDI) in SA is running at only $2.5bn per annum, far below the hoped for level of $20bn. This trend predates Covid-19. The main reason for this reluctance on the part of foreigners to invest is policy uncertainty and fear of inequitable expropriation. The Expropriation Bill does nothing to allay these fears. It should be amended.

As this bill ostensibly deals essentially with land, its ambit should be restricted to land and consequential improvements. I realise that section 25 of the constitution does not limit the definition of property to land, but it is not clear that this is intended to extend the concept to private homes, shares, intellectual property, pensions and so on.

Until such time as the full ambit of section 25 of the constitution is determined by the courts, I suggest the Bill explicitly restrict its ambit to land and relevant improvements such as farm buildings, and water and mineral rights, and make it clear that it does not extend to urban residential homes, nonproperty shares and other investments, or pensions.

The service of a notice of expropriation should be stayed until any court process is resolved. Serving such notice during legal proceedings is not in my opinion fair administrative practice, and is therefore unconstitutional.

Payment in full should take place on transfer of ownership. A number of potential expropriating authorities such as municipalities are effectively bankrupt. It is quite possible that in such cases payment will be unduly — or permanently — delayed if payment need only occur after transfer of ownership.

Finally, there is nothing in the constitution preventing consequential losses on expropriation being paid, such as moving expenses compensation for loss of profits. Such provisions are typically included in international expropriation laws. I submit that their absence here amounts to unfair administrative practice.

Government cannot have it both ways: it cannot solicit investment for economic growth and then go on to establish broad, uncertain and inequitable powers of expropriation. I urge government think again, and adopt the proposals set out above.

Willem Cronje
Cape Town

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