The real problem with the land expropriation motion just passed in Parliament is that it does not actually seek to speed up the transfer of land to any individual or group of owners.
On the contrary, says Berry Everitt, CEO of the Chas Everitt International property group, it seeks only to put more land in the hands of the State - which has an extremely poor track record when it comes to land reform and redistribution over the past 24 years.
“Most South Africans understand and support the urgent need to address historic injustices and achieve a much more equitable distribution of land, property ownership and wealth.
“But unfortunately, this motion has come with no plan attached about how the gross inefficiencies and corruption that have dogged the process so far will be addressed and fixed – or what the State intends to do differently going forward, using the considerable power and resources it already has at its disposal.”
As a result, he says, the motion could all too easily create the impression that it is just the first move in a longer-term plan to nationalise all property in SA, and for everyone from famers to flat-dwellers to have to lease their land from the State.
“This certainly seems to be the vision of the Economic Freedom Front, but as has already been pointed out, this would destroy one of the pillars of the economy, because banks would no longer be able to use land as security, for example for the working capital that farmers need every season. It is our understanding that agricultural debt currently totals around R160bn, and if that were to be recalled, it would certainly put the whole country’s food security at risk.
“There would also be no underlying security for home loans, so anyone who wanted to buy a home would need to pay the full purchase price in cash. This would deprive millions of ordinary South Africans of the only opportunity that most of them have to build up their personal wealth and financial security for their families.”
Consequently, Everitt says, he does not believe that nationalisation is the intention of the governing party, or that there is any need to panic in reaction to the expropriation motion – “not least because President Ramaphosa has emphatically stated several times that expropriation without compensation will only be supported when it poses no threat to agricultural production, food security or the financial institutions.
“However, the fact is that the motion to amend Section 25 of our Constitution, which is now under review by the parliamentary Constitution Committee, has already raised a red flag among the investors South Africa needs so badly if it is to achieve even modest success in growing the economy and reducing chronic unemployment.
“And as a country we already know that perception is everything when it comes to attracting new foreign investments and persuading local investors to keep their money here rather than take it offshore.
“So for the sake of all our futures, the ‘land issue’ needs to be handled with much more finesse and transparency than is currently the case. Government urgently needs to spell out its intentions and a clear plan for realising its land restitution objectives and agricultural / land reform programme.”
Article by: Chas Everitt Internationalblog comments powered by Disqus
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