EDITORIAL: Cyril’s land conundrum
The ANC is paying the price for having lost its way and, in the process, the support of critical constituencies
For years now, the ANC’s great skill has been stating the obvious about SA’s depressing social reality. Its great failing has been not doing anything about it — as with the land question.
Writing in the Financial Times, President Cyril Ramaphosa recently made a poignant case for land reform, citing the World Bank: "SA’s historical, highly skewed distribution of land and productive assets is a source of inequality and social fragility."
There is no disputing this — the problem is how to fix it. In the article, Ramaphosa tried his best to downplay the negative aspects of the ANC’s decision to expropriate land without compensation. "This is no land grab; nor is it an assault on the private ownership of property," he wrote.
"The ANC has been clear that its land reform programme should not undermine future investment in the economy or damage agricultural production and food security. The proposals will not erode property rights, but will instead ensure that the rights of all South Africans, and not just those who currently own land, are strengthened."
It’s a noble sentiment, and at least Ramaphosa has now put specifics on the table. This week, government withdrew the Expropriation Bill, which has been stuck in purgatory in parliament, to explicitly clarify how expropriation without compensation might happen, which is useful.
But, practically, how can expropriating land avoid becoming an assault on property rights?
Ramaphosa’s way out of this conundrum has been to suggest it will be applied selectively, and not to working farms. There have been several suggestions on when expropriation without compensation may be justified, he wrote. "These include, for instance, unused land, derelict buildings, purely speculative land holdings, or circumstances where occupiers have strong historical rights and title holders do not occupy or use their land, such as labour tenancy, informal settlements and abandoned inner-city buildings."
The problem is not only that this appears to be out of step with what his own party intends; it’s also way out of step with what the EFF wants. Will the EFF support a constitutional amendment to expropriate land without compensation if it will only apply to derelict buildings? It seems unlikely.
Overall, the ANC is paying the price for having lost its way and, in the process, the support of critical constituencies. It’s now in rejuvenation mode, latching on to any policy promise that could improve its grass-roots popularity. But this is not the way to make policy.
First, more often than not, the public sees through the façade. The ANC’s by-election results since expropriation without compensation was announced have been mixed.
Second, creating policies for the short term often throws up more problems than it solves. The noxious US President Donald Trump, probably because of his own political problems, has now latched on to the issue. As usual, he doesn’t know what he’s talking about — but the mere fact of his attention is bad for the thousands of people in the motor industry who rely on exports under the African Growth & Opportunity Act.
As time goes on, more unintended consequences will become apparent, putting pressure on the ANC to either give way to the EFF’s vision, or be painted as duplicitous and ineffective.
Ramaphosa said, correctly, that land reform in SA is a moral, social and economic imperative. And yet, for years, the amount the government spent on restitution is about the same as it spent on the squads of protection goons who surround politicians whenever they emerge in public. For example, the government spent R2.7bn last year on land reform within the R10.4bn budget of the department of rural development & land reform. It spent R2.6bn on VIP protection and security.
Clearly, these moral, social and economic "imperatives" are less imperative than the ANC pretends. And that fact alone demonstrates the credibility gap that now bedevils the party.
Business needs to be more explicit about its views on this matter. The problem is not what the ANC says it wants, but what the likely outcome will be. For business to ignore the problem in the hope that it won’t be as bad as some think, is to do South Africans a huge disservice.