Tag: land expropriation

By Crecey Kuyedzwa for Fin24 

Former white commercial farmers in Zimbabwe who had their land expropriated under the fast track land reform programme in the early 2000’s have accepted government’s offer of an interim payment of RTGS$53m (R238m at current exchange rates).

In 2000 Zimbabwe expropriated land from white commercial farmers without compensation and distributed it to landless black people and the connected elite, who now own multiple farms.

The country budgeted RTGS$53m in its 2019 national budget as compensation to the former farmers, and the offer has now been accepted by a union representing them. The compensation is for farm improvements.

Zimbabwe introduced a new currency called the RTGS$, or real-time gross settlement dollar, in February. One RTGS$ can buy R4.50, according to the Reserve Bank of Zimbabwe on Monday morning.

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In a statement the Commercial Farmers Union said they had to accept the advanced interim payment as some farmers were in financial distress.

“As this is a limited fund, it is hoped that those who are not in financial distress do not take it up so as to maximise the effect on others not so fortunate.”

The total bill could run into billions and the Zimbabwean government is working with international financial institutions on how best to fund the compensation.

In its own statement on the issue, which was released over the weekend, the Zimbabwean government said by end of April 2019 the registration papers for beneficiary farmers would be complete and disbursements will commence.

Valuations for farm improvements are also expected to be completed by end of May 2019, reads the statement.

Government adopts land expropriation report

By Gaye Davis & Babalo Ndenze for EWN

South Africa’s taken the first step towards legislating for the expropriation of land without compensation, but there is a long road ahead before it becomes law.

Parliament’s constitutional review committee has adopted its final report, which recommends that Section 25 of the Constitution, the property clause, be amended to make expropriation without compensation explicit.

The report is expected to come before the National Assembly for debate and adoption in two weeks’ time.

Parliament is expected to debate and adopt the committee’s report at the end of November, but that’s just the start of a lengthy process to amend the Constitution, which could also face legal challenges along the way.

A parliamentary committee will then have to draft and process what will be the 18th Constitution Amendment Bill.

That’ll involve a fresh round of public participation and comment.

Given some parties’ and civil society organisations’ opposition to amending the Constitution, legal challenges could delay the process.

Parliament’s schedule also makes it unlikely the bill will be voted on before next year’s elections.

A final hurdle is that any constitutional amendment that affects the Bill of Rights requires a much bigger than a normal majority to pass.

Constitutional review committee co-chairperson Stan Maila said: “If you want to change anything in Chapter 2 (which deals with the Bill of Rights, and is where Section 25 appears), then you need a two-thirds majority vote in the National Assembly and six (of the nine) provinces (backing it) in the National Council of Provinces.”

At the same time, the ANC has made it absolutely clear that there’s no chance of a constitutional amendment before next year’s elections, as stated in the committee’s adopted report.

The EFF, which voted with the ANC, has also called on the amendment to be finalised before the end of the current term.

Committee member Vincent Smith said: “What is very clear is that there will be no voting on the actual constitutional amendment before elections, I hope that clarifies it. There will be no voting on it, it’s just not practically possible.”

The ANC has also dismissed opposition accusations that the party and EFF are using land expropriation as an electioneering ploy.

“Is this a sham for electioneering purposes? It’s not, because people who understand know that the process of actually amending the Constitution is not going to happen until after the elections,” Smith added.

The party added that the adoption of this final report will bring about an end to policy uncertainty while also addressing historic wrongs.

Source: Fin24

The rand briefly broke below R14.00 to the US dollar following the news that Parliament’s portfolio committee on public works withdrew its expropriation bill on Tuesday.

The public works committee said in a short statement that it “officially resolved, in accordance with Joint Rule 208 (2), to reject (withdraw) the Expropriation Bill [B4D of 2015] so that it may be re-introduced at a later stage”. The bill is separate to the review of section 25 of the Constitution currently under way to make it possible for the state to expropriate land without compensation.

The rand, which immediately firmed to R13.95/$, returned to trade 0.06% firmer at R14.15 to the greenback by 17:13 in Johannesburg.

Important to note is that the expropriation bill existed before the latest processes on land expropriation and was referred back to Parliament by former president Jacob Zuma, who said consultation around the bill was inadequate.

Zuma returned the bill to parliament in 2017 due to inadequate public participation for the bill.

During its December conference, the ANC and its delegates agreed that expropriating land without compensation should be among mechanisms to effect land reform.

The condition was that expropriation should not undermine the economy, agricultural production and food security.

The constitutional review committee is due to report back to Parliament regarding its findings from the nationwide hearings on expropriation soon.

By Bekezela Pakathi for Business Day

British Prime Minister Theresa May has welcomed SA’s approach to land reform, saying the UK supported land reform that’s legal and transparent.

“The UK has, for some time now, supported land reform that is legal, transparent and follows a democratic process … it’s an issue I raised with President [Cyril] Ramaphosa when he was in London earlier this year. I will be talking about it with him later [on Tuesday] … but I welcome the comments he has already made about approaching land reform, bearing in mind the economic and social consequences … and that land reform will be no smash and grab,” May said at a business forum in Cape Town earlier on Tuesday.

Last week, US President Donald Trump posted a controversial tweet on SA’s push to expropriate land without compensation. “I have asked Secretary of State [Mike] Pompeo to closely study the South Africa land and farm seizures and expropriations and the large scale killing of farmers,” tweeted Trump. “South African Government is now seizing land from white farmers.”

Responding to questions on the matter and whether expropriation without compensation could hurt SA’s efforts to attract foreign investment, May reiterated that the UK supported land reform that is “legal and transparent”. She said SA and the broader African continent offered significant opportunities for investors.

“I think there are real opportunities for the future. I brought a significant business delegation with me across a wide range of business activities from financial services to agriculture. Obviously we look across Africa … they are looking to invest [but] want to ensure that countries have that stable aspect investors are always looking for,” May said.

The UK’s development aid would look at how “we can assist in bringing stability to those states that are fragile”, she said.

May was in SA as part of a three-nation visit to Africa in an effort to strengthen Britain’s economic relations with the continent, ahead of the UK’s exit from the EU In 2019. She is due to visit Nigeria and Kenya this week.

Types of land the ANC may expropriate

By Phillip de Wet for Business Insider SA 

There is no detailed policy on land expropriation yet, but the political drivers behind it make it possible to predict what kind of properties may be first in line.

Land owned by parastatals in cities is high on the list, as is abandoned buildings in city centres.

Productive farms also feature – but lower down, under particular circumstances, and possibly with real value paid for the land.

The ANC fully intends to change the Constitution to speed up land reform and make expropriation without compensation easier – and there are things the ANC could “implement immediately”, the party says.

It is not yet clear just exactly what that means. How will bank bonds over expropriated property be handled? Does the ANC have a plan for dealing with legal challenges based on the fundamental principle that state action cannot be arbitrary?

But the very fact that those questions remain unanswered show that President Cyril Ramaphosa’s late-night speech on Tuesday was driven by political necessity, experts say, not least of all elections coming up in 2019.

And that actually helps to predict what kind of property is likely to be expropriated. Here are the predictions for what the government will likely target first, with or without compensation.

Urban land owned by state companies such as Transnet and Eskom
Plots of land owned by state-owned enterprises (SOEs) in cities such as Cape Town – especially those that are partially undeveloped – could make for some quick expropriation wins, says Ruth Hall of the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape.

“Well-located land in cities will be crucial, and there is a lot of that owned by parastatals.”

Eskom’s Megawatt Park headquarters, with its large open tracts and underused sports fields on the fashionable northern fringes of Johannesburg, is a good example, says Susan Booysen, director of research at the Mapungubwe Institute for Strategic Reflection (Mistra).

“It is centrally located, close to business opportunities and transport, just the kind of place people have been agitating for.”

And SOEs – especially ones as dependent on government debt as Eskom – are unlikely to fight back quite as hard as some private landowners, making for land that can be successfully and finally seized ahead of 2019 elections.

Abandoned, hijacked and unmaintained buildings in the city centres
The demand for cheap housing is acute in just about every city centre, and just about every city features abandoned and sometimes downright dangerous buildings only nominally still in private ownership.

Expropriating such buildings as a faster alternative to, say, seeking to liquidate their holding companies for the rates and taxes owed to municipalities, will be politically palatable, and socially desirable. Such expropriations are also unlikely to face serious legal challenges – and make for lots of useful numbers: high potential property values, high number of people who can be housed, large amounts of floor space, and other metrics that come across well in billboard-style advertisements.

The only question is what happens to the municipal debt associated with such buildings.

Land hosting – and adjoining – current informal settlements
“Expropriation is a mechanism for breaking [a] deadlock,” says Hall. “Whether or not you compensate is a different matter.”

And deadlock is the situation on land under and around some current informal settlements, where the title-holders have abandoned any pretence to control the land, but are hanging on to it because there is some small hope of cash down the line.

That hope dwindles fast after a change to the Constitution and a firm promise by the government to expropriate land without paying anything for it – and could make owners willing, even eager, to take whatever they are offered.

Abandoned mines and mine dumps
Unused mining land is very likely to be in the expropriation mix, says Booysen, especially if there is a prospect of reopening a mine, and so resurrecting jobs and broader economic opportunity.

Mineral resources minister Gwede Mantashe is very keen to keep mines out of care and maintenance, with his department stepping in to find buyers for assets others no longer want.

Expropriating shuttered mines would be a warning to companies who wish to keep “care and maintenance” shafts on their balance sheets. It would also make a strong political statement.

Smallholdings, especially abandoned or unused but agriculturally-promising ones
There is a need, at least politically, to expropriate land that can be farmed. Yet the ANC seems genuinely keen to not disrupt food production or the economy, and there are more voters in peri-urban areas than rural ones.

This, says Booysen, all suggest that unused or underused smallholdings on urban fringes will draw the eyes of expropriators.

The fact that such land is better suited to subsistence-level agriculture, because of proximity to markets and services, is a bonus.

Portions of farms long worked, for their own gain, by tenant-workers
KwaZulu-Natal and Mpumalanga in particular feature farms where generations of tenant-workers have worked some of the land for their own account, says Hall.

That is one area where the government may face an early confrontation with private owners, but also an area where compensation is likely to be carefully considered, with factors such as the value of the land, debt to banks, and provenance of the land coming into play.

By Natasha Marrian for Business Day

The ANC has decided to change the Constitution to expropriate land without compensation.

This was decided at a two-day lekgotla held in Irene, outside Pretoria, which concluded on Tuesday.

The move is seen as one which reflects the majority perspective expressed at the ongoing hearings on land taking place across the country headed by Parliament’s Constitutional Review Committee.

Business Day understands that a decision was taken by the ANC national executive committee lekgotla to “amend the Constitution to explicitly allow for expropriation without compensation”.

The party is set to make a submission to the parliamentary process under way to this effect.

The decision has far-reaching consequences for both the South African economy as well as its political space. It comes following yet another quarter in which the South African economy has shed jobs, with Statistics SA announcing an increase in the unemployment rate on Tuesday. The move is set to further dent investor sentiment and confidence by local business in the economy.

However, it can be viewed as a decidedly political move to neutralise the Economic Freedom Fighters (EFF) whose members have been dominating parliamentary hearings on whether the Constitution should be amended.

The ANC in a statement from President Cyril Ramaphosa late on Tuesday said it had become “patently clear that our people want the Constitution be more explicit about expropriation of land without compensation, as demonstrated in the public hearings.

“There is also a growing body of opinion, by a number of South Africans, that the Constitution as it stands does not impede expropriation of land without compensation.

“The lekgotla reaffirmed its position that a comprehensive land reform programme that enables equitable access to land will unlock economic growth, by bringing more land in South Africa to full use, and enable the productive participation of millions more South Africans in the economy,” Ramaphosa said in a statement.

“Accordingly, the ANC will, through the parliamentary process, finalise a proposed amendment to the Constitution that outlines more clearly the conditions under which expropriation of land without compensation can be affected.”

There has been intense debate inside the ANC about whether Section 25 of the Constitution should be amended to expropriate land without compensation.

The ANC took the decision on expropriation without compensation at its national elective conference at Nasrec in December. It partnered with the EFF in Parliament in February to vote for a motion for the expropriation of land without compensation. The EFF wants all SA land to belong to the state, but the ANC’s stance on this remains unclear. There have been dissenting views inside the ANC and the alliance over whether it was necessary to amend the Constitution to allow for expropriation without compensation.

Ramaphosa’s own investment envoy, former finance minister Trevor Manuel, said in June that explaining SA’s ongoing land debate to investors had been tougher than expected.

In 24 years, the ruling party has failed to adequately address the issues of land redistribution and expropriation. In an effort to right these wrongs, President Cyril Ramaphosa backed a motion tabled by the EFF that called for a constitutional amendment for land expropriation without compensation, even as the governing party’s amendments effectively watered down the original opposition motion.

However, the question of land reform is not one easily addressed.

“People are incredibly desperate to get a permanent place to stay and it comes with a history of requiring land,” says Lizette Lancaster from the Institute for Security Studies (ISS) in an article by News24.

She says the trend from 2013 to 2018 showed that at least 70 protests related to land invasion had turned violent.

The desperation felt by many is used as a political too to increase supporters or stir up anger against the opposition.

According to News 24, an attempted landgrab in the coastal town of Hermanus in the Western Cape on Monday turned violent, following a tense standoff with groups of protesters and police, Marchers sett a recycling plant and a police station alight, stoned cars and demolished buildings. Police used teargas and rubber bullets to disperse the crowd.

Land invasions are increasing

Since the start of the year, more than 10 areas across the country have been invaded, says News24. Earlier this month, areas north of Johannesburg, including Olievenhoutbosch, Blue Hills and Waterfall were invaded.

Image credit: News24

Other areas targeted in Gauteng included Marlboro, Alexandra, the Golden Highway near Eldorado Park, Weilers Farm, Orange Farm Extension 10 and East Lynne.
The Western Cape has also experienced invasions in Dunoon and Gugulethu.

Parliamentary debate

Parliament is due to debate the issue of expropriation of land without compensation in August, after an amended EFF motion was passed to review section 25 of the Constitution.

However, according to News24, Rural Development and Land Reform Minister Maite Nkoana-Mashabane has indicated that she is preparing for a test case to expropriate land without compensation. “We cannot wait for Parliament,” she says.

The red flags

According to News24:

South Africans who own land are also wary of the arbitrary loss of land if the review leads to changes that would allow government to unilaterally claim land in the name of expropriation.

Possible conflation of land and general property is also a concern.

Banks and financial institutions, meanwhile, are concerned about what will happen to if their clients default on property loans.

With its history as an advanced and sophisticated economy on the continent, SA has a great deal of exposure to the Western economy, whose political elite have already reacted to the motion with concern.

The fear is that full scale land grabs would wreak untold damage on an already vulnerable and underperforming South African economy.

The international investor community is sure to want their investments in SA protected. While investors are not yet too alarmed by comparisons to Zimbabwe’s land grabs, some in the international community ate preparing for the worst.

Source: News24

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