Land ownership is one of the most central issues for post-colonial African nations. Presently, South Africa is experiencing histrionic reforms in its laws, including a constitutional amendment on this issue. While the current land reforms require recompense to the landholders in case their land is taken, the proposed amendment suggests expropriation of land without any compensation to the previous landholder (Sorensen 2019). This proposal comes with a shift in the national policy and at a time when the land reforms have made tremendous progress.
According to Ferguson (2013), the certified statistics of land redistribution and land restitution programmes shared by the parliament suggest that the total area redistributed is 4850100 ha, and the entire portion of the area restored through compensation claims is 3389727 ha. Moreover, the area for which compensation was given stands at 2772457 ha. Therefore, more than 11 million ha of land has been reallocated with the help of programmes from the government. Also, if one includes the 4027 million ha of state-owned land, the effective land area which transferred out of white landlords through redistribution and compensation programmes is 15,039 million ha.
This makes the notion of expropriation of land without compensation even more disheartening which ignores the financial realities of farming. Furthermore, Zimbabwe which is one of the few countries that has opted for a similar policy is departing from it. Nevertheless, it would be better for African national congress to take some fundamental lessons for South Africa through the experience of Zimbabwe. In hindsight, Zimbabwe tells that its expropriation deprived of recompense bill was a disastrously bad idea (Moolman 2018). Furthermore, it also suggests that even though they may have taken the land without giving reimbursement for it, the country is collectively paying for it through years of decline in its economy which has resulted in de-industrialisation, agricultural revenue loss and unemployment. In 2009, Kepe and Cousins (2002) appraised that the overall cost of land reforms in Zimbabwe cost the country around $20 billion which includes, foregone economic growth, food aid imports and lost export revenue that could have helped Zimbabwe’s economy.
Over 90per cent rate of redundancy and tepid growth of the economy has forced the Zimbabwean government to correct it fundamental mistake which is to give compensation to farmers for the expropriation of their land, which stands at around $11 billion. The key argument is that if the national government fails to pay compensation to its commercial sector then, someone else will have to pay for it. Besides, the compensation effect, as Kwarteng and Botchway (2019) puts it, will see that the citizens of Africa and the entire economy pays for land appropriations through lost job opportunities, lost agriculture export proceeds and decline in confidence which ultimately results in the flight of foreign and domestic direct investment form the sector and the overall economy.
In this manner there are two immediate points which should be noted to speak for both, the inherent difficulty in the execution of such as bill and is implications thereof. Firstly, it is not clear how the law proposed to cater for the improvements made on the land and the assets on the farm. The land is approximately 10% of the total value of transferrable and fixed assets are taken into consideration (Clark 2019). Would such an investment sink or will it be subjected to compensation? Moreover, if the compensation is due not for the land itself, but the farm assets, then would it not be prudent for the regime to pay for the 90% improvements on the land to obtain the 10% which represents the actual value of the same (Viljown 2020).
Secondly, South African agricultural land is seriously under debt. In this case, if the expropriation becomes a reality, then the question is, if not farmers, will the banks be compensated for the expropriation who is technically the owner of the land. If not, then this would translate into wiping out R160 billion from the official records of the bank (Akinola 2020). In case the government decides to cover the associated debt, then the only difference is that the money goes to banks, instead of the farmers.
Thirdly, the South African government will realise that expropriation of land without compensating is extremely complex, by which time the proposed reform will have hindered completely. This will more likely lead to another draconian reform to enable the government to capture the land with impunity. From the experience of Zimbabwe, one can learn an important lesson that expropriation without recompense can do permanent injury to the agricultural land market in an economy which effectively reduces the value of the assets and the land. In a similar manner, the increased risk of future land expropriate without any compensation suggests that it is unlikely of new capital to be invested on land (Sihlobo and Kapuya 2018). Consequently, even though the compensation cost for the land will fall which will assist the government in expediting the land reform, the cost will be undertaken by the beneficiaries of land reforms who will be exposed to low prices of farm assets, falling prices of the land and high cost of borrowing.
With low compensation costs of government being out weighted by the high borrowing cost and low farm asset prices of the beneficiaries, it is clear that the value-neutral expropriation concept is a myth. In a quasi capitalist economy, there is no such thing as expropriation which is deprived of recompence because if the government refuses to pay, the cost will ripple into the overall economy. Thus, if the government seizes the property which is private, somewhere or someone in the overall economy will have to pay, whether through loss in future and current opportunities or through a prolonged decline in the African economy which will corrode the procuring power of money and will lead to losses in savings and deindustrialisation (Moolman 2019).
Moreover, it is evident that the more favourable outcome is redistribution of land. Unemployment, poverty and racial grievances in South Africa cannot be addressed without it. Reallocation is also the economic answer in the long run (Boshoff 2017). With a mainly economically unproductive, unemployed and uneducated portion of South Africa’s population, the nation’s economy is growing at a dismal rate of 1.3 per cent. This problem will only be exacerbated by leaving the land in the hands of white farmers (Mthembu 2019). However, if because of the expropriation of land without compensation, the unproductive portion of the population becomes more influential, then the government can start skill development and training programs to mitigate the economic impact of land reform. Considering the track record of the government, such a policy might be out of reach (Purchase and Boshoff 2017).
It is also quite possible that the effect of the mentioned land reform policy might produce the same results it did in China. In China, the expropriation of land without compensation resulted in diverse contradictions (Sihlobo 2018). The change of policy heightened socio-political injustice and instability and also resulted in the rise of conflict over land mainly due to the persisting scarcity of land, urban bulge and rise in population. Farmers who feared to lose their only source of income engaged in violent resistance. Adekoye (2019) agreed that such land reforms can positively influence the development of the nation, but also argues that for national development, the land is not the only sufficient condition. Also, as Erasmus (2018) noted, the land is one of the most vital assets for farmers which translates to a significant source of power and wealth. Therefore, a threat to land, power and wealth constitutes economic, political, and social insecurity.
Simply put, the current framework for land reform has failed to respond effectively to the three key elements of such land reforms, namely, tenure security, redistribution and restitution. Prevalent land reform scheme has lost in its effort to facilitate agrarian development and represent what is described by the democratic alliance as the lost opportunity for empowering the youth of South Africans to participate in economic development (Dlamini and Ogunnubi 2018). In addition to this, land-related violence, structural violence and land conflict because of skewed land arrangements and the dangers of unresolved issue related to land continue to pose to political, economic and social security calls for a change in policy (Farred 2018).
In conclusion, it is evident that there is a great need for effective land reforms in South Africa that can speed up the transformation of the agricultural sector and can address the inequalities in the socio-political aspects of the nation. However, this should be done in such a manner which contributes to its triple objectives of employment creation, food security and economic growth. The argument that expropriation of land without compensation will make the transfer of land to the disadvantaged portion of the nation faster may be true, but at the same time, it should also be noted that it will be extremely damaging for South Africa's agriculture sector and can also lead to economic collapse. Moreover, instead of the political push for acquiring more land, the government should try to improve the efficiency of its agriculture sector and should focus on improving the productivity and competitiveness of the same.
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