The much talked about ANC national conference starts tomorrow. The big ticket item is of course the showdown for top spot between Dr.Dlamini-Zuma and Mr.Ramaphosa in a leadership race that has the potential to change the trajectory of our economy and with it the future of every South African.
However, the conference is not only about leadership contestation, there are several highly important policy discussions being tabled over the duration of the meeting, five of which include policy discussions around land reform, mining matters (nationalisation vs local beneficiation), targeting of anti-competitive business practices, the nationalisation of the Reserve Bank, and wealth taxes.
This piece takes a closer look at the land reform debate, what the options tabled around policy changes are and the position on the issue, of both front-runners in the ANC leadership race.
Land redistribution policy options
A good place to start is with the Constitution. The phrase, ’just and equitable’ that came out of the policy proposal document in March this year caused a media storm, leading to suggestions that attempts will be made to change the Constitution.
However, on closer study of the Constitution in respect to land ’reform’, participants in this process are not bound by "just and equitable" compensation. This is why the willing buyer/willing seller model has been in effect, making a transaction between seller and government no different to a private transaction. Incidentally, in the ANC’s 2012 Mangaung conference, it was resolved to do away with the willing buyer/willing seller principle, but nothing has yet been done around enactment of this ANC resolution.
It is when the state chooses to exercise expropriation that the phrase appears. Section 25(3) of the Constitution states that compensation must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including:
- The current use of the property;
- The history of the acquisition and use of the property;
- The market value of the property;
- The extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and
- The purpose of the expropriation.
The list isn’t a closed one, implied by the word ’including’, which as Theo Boshoff, head of legal intelligence at the Agricultural Business Chamber, explains, makes codifying of compensation problematic, because "one cannot create a logarithm that accounts for all the possible unlisted factors a court may deem relevant, given the circumstances. Likewise, it is impossible to formulate how much weight should be attached to each factor as its applicability will differ depending on the circumstances of each case."
The June/July ANC national policy conference that then followed, unanimously resolved that "radical land redistribution is needed". The conference concluded that every option should be open for discussion, including tax reforms and even changes to the Constitution. The two approaches that were eventually identified as the most popular among delegates were:
1st Proposal: The Constitution should be amended, allowing the state to expropriate land without compensation.
2nd Proposal: Section 25 of the Constitution (which guarantees property rights) would be respected, but the state would act more aggressively to expropriate land (something the state has rarely done in the past) in line with the ’just and equitable principle’ aforementioned.
Agricultural land in the spotlight
In the ANC’s National Conference Report, which will be utilised during the 16-20 December conference, there is a statement that reads: "The programme of land redistribution has been inadequate. Not enough productive land has been transferred into the hands of the black farmers and producers."
However, this isn’t only directed at ownership within the private sector, as illustrated by the draft Bill on Communal Land Tenure, where the goal is to transfer ownership of land owned by the state to communities. However, it is widely recognised that the amount of land currently owned by the state will not be enough to meet the need...
Redistribution of agricultural land has been a hot topic for years and progress has been slow and often economically destructive. The table below illustrates the shifting dynamic of ownership and the reduction in agricultural zoned land over the same period.
The Department of Agriculture, Forestry and Fisheries has acknowledged that the alarming levels of unproductivity among recipients of agricultural land is due largely to the lack of capacity and skills of those who have received land as well as lack of access to finance. It is hoped that this issue, together with concerns around food security, be considered during deliberations over which option to pursue around land reform.
Where do Dr.Dlamini-Zuma and Ramaphosa stand on the issue?
Dr. Nkosazana Dlamini-Zuma
Central to her vision is "redistribution of our land which was taken from us through the barrel of the gun".
Dlamini-Zuma is an internally qualified medical doctor, a former Minister of Health under Nelson Mandela and previous African Union Commission Chairperson.
Current president Jacob Zuma has come out in full support of his ex-wife, and it is very clear, that should she be elected, it would "signal a sharp rhetorical shift towards more leftist economic policy," according to John Ashbourne, Africa economist at Capital Economics.
Her views on land are passionate and puts her firmly into the radical transformation camp. She regularly highlights the issue and it has formed a central part of her campaign for presidency.
At her gala dinner on Wednesday, she dedicated a portion of her speech to the issue saying that "South Africans will be watching to hear our debates around historic injustices like land".
At the same event, she also quoted the freedom charter which says that South Africa belongs to all who lived in it, saying the land and the economy had to be shared among all the people in the country.
Regarding the land issue, Dr.Dlamini-Zuma has gone on record saying: "Our forbearers said it, we must implement it." She has previously cited 1913, saying by that year, "land was already taken away from blacks". In an address in June of this year, she said that the land issue needed to be addressed "immediately".
Addressing ANC members at Kgoloko’s memorial lecture, she said in October, "We still don’t have land. Africans are pushed to the mountains, to the rocky hills... It’s important to remember that when the ANC talks about land today, it is a struggle our forbearers started and we have the obligation to conclude."
It is no secret that Dr.Dlamini-Zuma wishes to accelerate this area of transformation and go beyond the current protocols to achieve this. She has said "We agree that using the fiscus for land redistribution must be accompanied by other measures if we are to achieve the goal at the required pace."
"I’ll return the land to rightful owners if elected ANC president"
Current Deputy President, Ramaphosa, is a wealthy businessman, activist, Trade Union leader and was a key player in the formation of the Constitution and Mandela’s government of unity.
While a confirmed socialist, he also commands the respect of Business South Africa and is the market’s preferred choice for the ANC top job.
Cyril Ramaphosa has also been vocal on the land issue, stating a month back that "We want our land back and we want the land to be in the hands of our people. We’re going to make sure that land is put back in the hands of our people."
During a SACP rally in October Ramaphosa highlighted land as one of his key areas of focus, saying "We must make sure that the land is brought back to our people. Those who were removed from our land must have their land returned and those who stole that land must have that land returned back to our people."
In March 2017, Responding to questions in the National Assembly from the EFF, Deputy President Cyril Ramaphosa appeared sympathetic to the idea of a change in the Constitution that would permit expropriation of land without compensation.
While not stating his personal preference, he did indicate that amending the Constitution was one of many ways to go about it when he said "Admittedly, amending the Constitution is a strategy..."
What is clear is that both candidates have placed enormous importance on the land issue during their political careers and in particular during their campaign for ANC presidency. Both have promised swift progress and both have eluded to new ways of getting the job done. In the interim, South Africans remain uncertain and investors unsettled. The EFF have indicated a willingness to partner in a motion to amend the Constitution to allow for expropriation without compensation.
Presidency of the ANC isn’t the only item that may be decided upon in the ANC’s 54th National Conference. The way land will be acquired for redistribution may be as well.
Theo Boshoff - Mail and Guardian - ANC shows its hand with land reform - https://mg.co.za/article/2017-03-24-00-anc-shows-its-hand-with-land-reform
Tehillah Niselow - fin24.com - 5 ANC policy proposals that could change SA’s economy
Tshidi Madia - News24.com - ’Our forebearers said it, we must implement it’ - Dlamini-Zuma on land
The Citizen - Africans still don’t have land, says Dlamini-Zuma
Paddy Harper - Mail & Guardian - What NDZ stands for
Eye Witness News - "I’ll return the land to rightful owners if elected ANC president"
Bafana Nzimande - Times Live - Know your candidate: Cyril Ramaphosa carries promise of unity
Bekezela Phakathi - Business Day - Constitution can be amended, says Cyril Ramaphosa
Investment Specialist at Discovery Invest
Mark graduated with a Business Science Degree from the University of Cape Town in 2007. He then joined Sharenet, during which time he also completed his B.Com Honours through UNISA. Mark has helped to build, launch and manage derivative and share trading brokerage businesses. He is also a JSE Registered Securities Trader, and has worked on the trading desk at Sharenet. After seven-and-a-half years at Sharenet Mark then moved to Reitway Global (a specialist Global Listed Property Fund Manager) where his passion for property was further kindled. Mark currently works for Discovery Invest as an Investment Specialist on their Investec Managed fund offering. He has over ten years of experience in the equity and asset management sector and can be reached at: email@example.com
The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Discovery Invest.