Land reform in South Africa is crucial for inclusive growth

By Cyril Ramaphosa

It is nearly 25 years since South Africa became a democracy, yet the promise of that historic achievement has not yet been fully realised by the millions of people who are unemployed and live in poverty.

Despite significant progress, many of the economic disparities of the apartheid era persist. After a decade of slow growth, the South African government has embarked on a major investment drive to stimulate economic growth and create new jobs.

It has begun to tackle the obstacles to growth by working towards greater policy certainty, shifting resources towards infrastructure investment, reducing bureaucratic inefficiency and stabilising public finances.

Among the greatest obstacles to growth is the severe inequality between black and white South Africans. For the South African economy to reach its full potential, it is therefore necessary to significantly narrow gaps in income, skills, assets and opportunities. 

One of the areas where this disparity is most devastating is in the ownership and access to land. As the World Bank has observed, “South Africa’s historical, highly skewed distribution of land and productive assets is a source of inequality and social fragility.” It argues that, after skills, current distribution of land is the second biggest constraint to poverty reduction and shared prosperity. In order for South Africa to secure the future, and to ensure equitable and just human development opportunities as envisioned by our first democratic president – Nelson Mandela, reform of patterns of land ownership in South Africa is a critical issue.

That is why the government has embarked on a process of accelerated land reform and why South Africans are currently engaged in an intense debate over the prospect of expropriation of land without compensation as one among several measures to achieve this reform. Unfortunately, several commentators have confined their engagement on this matter to soundbites and not to the substance. 

The ‘land question’ goes back more than a century to the 1913 Natives Land Act, which provided legislative form to a process of dispossession that had been underway since colonial times. It confined the country’s African population to just over 10 percent of the land, reserving the rest for the white minority. These laws alienated the majority of our citizens from their places of birth and burial, stripped them of their assets and deprived them of their livelihoods.  

 

Even now, the dispossession of land continues to determine the prospects of millions of South Africans. And it holds back the country’s economic development. By restricting the ownership of land to a small minority, the apartheid regime ensured that one of the country’s most valuable economic resources would be severely underutilised.  

During this year the Department of Rural Development and Land Reform released results of a Land Audit to establish land ownership patterns. Among other insights forthcoming from the land audit, it emerged that: 

  • Individuals, companies and trusts own 90% of land in South Africa
  • Individuals own 39%, Trusts own 31%, companies own 25%, Community based organisations own 4% and co-ownership at 1%
  • In terms of farms and agricultural holdings 97% of the total agricultural holdings are owned by 7% of total land owners
  • Agricultural land ownership by race: 72% of farms and agricultural holdings are owned by whites, 15% by coloured citizens, and 5% by Indians, and 4% by Africans.

For decades, the country’s assets – its land, its minerals, its human resources, its enterprises – have been owned, controlled and managed in a way that has prevented the extraction of their full value. Our intention is to unlock the economic potential of land. Without the recognition of the property rights of all our people, we will not overcome inequality, and without giving the poor the means to productively farm the land, we will not defeat poverty.

In promoting accelerated land reform, the ruling African National Congress, recently resolved to propose a constitutional amendment that would make explicit the conditions under which land could justifiably be expropriated without compensation. While the current clause in the constitution dealing with property rights does not necessarily prohibit such a measure, the ANC’s view is that an amendment would provide certainty and clarity.

The proposed amendment would need to reinforce the fundamental principles of the property clause, which, among other things, prohibits the arbitrary deprivation of property and holds that expropriation is possible in the public interest subject to just and equitable compensation. It also says that no provision can impede the process of land reform to redress the results of past racial discrimination.

While a parliamentary committee is currently wrapping up public hearings on this issue and still needs to give consideration to any possible constitutional amendment, there have been several suggestions on when expropriation without compensation may be justified. These include, for instance, unused land, derelict buildings, purely speculative land holding, 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.

This is no land grab. Nor is it an assault on the private ownership of property. 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. South Africa has learned from the experiences of other countries, both from what has worked and what has not, and will not make the same mistakes that others have made.

The proposal on expropriation without compensation is one element of a broader programme of land reform that seeks to ensure that all citizens can have their land rights recognised, whether they live in communal areas, informal settlements or on commercial farms. It includes the release of well-located urban land for low-cost housing so that the poor can own property and live close to economic opportunities.

For land reform to succeed, it is essential that support is given to beneficiaries of land redistribution through financing, training, market access, irrigation and the provision of seeds, fertiliser and equipment, all of which contribute to the sustainability of emerging agricultural enterprises.

Land reform in South Africa is a moral, social and economic imperative. By bringing more land into productive use, by giving more South Africans assets and opportunities for sustainable livelihoods, the country is creating conditions for greater, more inclusive and more meaningful growth.

** Cyril Ramaphosa is the President of South Africa.