Property & Wealth

Land expropriation is the wrong end of the wealth stick

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Radical, populist pronouncements are bound to increase in the months ahead as politicians will constantly have much of their minds occupied by the looming 2019 national elections.

Already President Jacob Zuma and the Economic Freedom Fighters’ leader Julius Malema seem to be locked in a competition to see who can out radicalise who on this emotional subject..

Both the ANC and EFF are using their public platforms to divert voters attention away from the multi-layered questions around massive service delivery failures. In the process, they are missing an already available treasure trove to dramatically improve the economic lot of millions of South Africans – instead of allowing it to rather become a huge source of frustration.

While these two parties are locked in so-called mortal combat on the floor of Parliament, Malema recently let slip that he'll use his 6.8% voter share to support the ANC should it agree, and take steps to change the constitution – changes that would make expropriation of land without compensation possible.

The EFF have long been promoting a regime in terms whereof land can be appropriated by the state without compensation while the Constitution in its present form is clear, the state may appropriate land in the public interest but against tendering fair compensation.

Wrong end of the stick

Let’s first look at the wrong end of this stick.

In the early days of the EFF, Malema was an ardent admirer of Robert Mugabe. What greatly impressed him was the revolutionary zeal of Zanu-PF when it came to land grabs – a ruthless system of allowing expropriation without compensation.

Nevertheless, the subsequent deflation of that once flourishing economy and the melt down of its currency has greatly diminished the appeal of following dopting this route. As things now stand, President Mugabe's government are finding it increasingly more difficult to pay salaries on time, or even at all...

However, our President is a master in the art of promoting populist policies. In this case, he is using the tear-jerker appeal of land reform to justify his call for circumventing the fair compensation process.

He is on record as saying that 2017 is the year for taking the land back to the people. And, in this objective he is gradually bringing the various ANC factions together under a united banner which has stood him in good stead in the past.

He specifically made mention of the land issue at the launch of an Operation Phakisa project, underscoring the need for bold steps to dramatically transform SA's economy. 

In the world of politics, talk is cheap and the reality is that, the EFF have no real intention of 'redistributing' the land to individual people or thierfamilies as independent economically functioning, units.

Malema, and the EFF for that matter, keeps glossing over the important detail that their own policies won't allow any South African to own land on an individual basis, should the party be in power.

Its “radical” land policy is that "The state should, through its legislative capacity, transfer all land to the state, which will administer and use the land for sustainable development purposes.”

In short, the EFF advocates a radical socialist dispensation which we all now know failed miserably in the USSR and in Eastern Europe and which precipitated the fall of the Berlin Wall and the present economic malaise in that part of the world.

The real opportunity

However, the ANC’s record on true economic transformation based on the transfer of land to the people of the land does not look so good either.

Almost two and a half decades after it came to power, it is a fact that at the at municipal level alone, the state is the formal owner of upwards of five million urban plots currently occupied by previously disadvantaged individuals.

Many of these individuals, havig been denied the right own any property by the apartheid government, have lived on these properties for their entire lives.

The problem with this state of affairs is that, these individuals remained being mere tenants rather than property owners.

How shoddy service delivery on this front has been thus far, is underscored by the fact that, for example, residents in Pomona estate at Kempton Park, who have been living there legally since the early 1990’s, had to turn to the Land Claims Court to prevent their eviction.

And, how explosive this issue has become was most recently illustrated at Mamelodi, Tshwane  where delays in the delivery of RDP housing triggered incidents of xenophobia and violent protests.

Having done so well in the municipal elections of 2015, especially in metropolitan areas, the time may have come for the Democratic Alliance to be seen to take-up the cause of those five million plus urbanised people having been excluded from home ownership by local authorities.

Also read: South Africa a “failed state” state on xenophobia management

Traditional land

To this problem in formal towns and cities can be added position of some 18 million South Africans – or, a third of our population – live in the former so-called homelands, where land ownership also still resides largely in the hands of the state via traditional leaders. This is the subject of ongoing legal and legislative battles.

Until this issue is brought to a satisfactory close, and the right to individual land ownership made possible, the most important entry point to the formal economy, for those living in traditonal areas, a crucial door to true economic transformation will remain shut to a third of the population.

We are convinced, and there are already examples, that the private sector will come to the party big-time, if a well-planned national campaign to establish private home ownership on existing state-owned housing inventory is launched.

by Eve van Basten

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