The following is an extract from Anthea Jeffery's book Countdown to Socialism: The National Democratic Revolution in South Africa since 1994, Jonathan Ball Publishers, Johannesburg, 2023
4 August 2023
The National Democratic Revolution (NDR) is the key to understanding ANC rule over the past three decades – yet most South Africans have been kept in the dark about it. In her latest book, Countdown to Socialism, Anthea Jeffery investigates how the NDR has been implemented in different spheres, including mining, water, and land reform.
In the post-apartheid period, the ANC’s Strategy & Tactics documents have gradually become more open about NDR objectives regarding land… The pivotal NDR objective was finally made clear at the Nasrec conference in 2017, when the ANC resolved that ‘the expropriation of land without compensation should be among the mechanisms available to give effect to land reform and redistribution’. This EWC goal was reaffirmed both at the SACP’s 15th national congress in July 2022 and at the ANC’s national conference in December 2022.
The Expropriation Bill of 2020 now before Parliament expressly allows ‘nil’ compensation on land expropriation in five listed circumstances. Among other things, nil compensation may be paid for unused land which is being held in the hope its value will increase over time; for property which is unsafe and poses a risk to others; and for land which has supposedly been ‘abandoned’ by owners who are failing to ‘exercise control’ over it.
In a country where land invasions and building hijackings are rife – and generally go unchecked and unpunished – this last provision is particularly damaging as it could encourage land seizures as a precursor to EWC. In addition, the circumstances in which ‘nil’ compensation may be paid are expressly ‘not limited’ to the five listed in the Bill, making it impossible to tell how far nil compensation could in time extend.
The Bill’s procedures for expropriation are heavily skewed in favour of the state. The Bill empowers hundreds of state entities, once they have completed various preliminary steps, to serve the owner with ‘a notice of expropriation’. Under that notice, both ownership and the right to possess the property will automatically pass to the expropriating authority on specified dates. Those dates could be set within a week or a fortnight of the notice being served and well before compensation has been determined or paid.
In theory, the Bill allows expropriated owners to approach the courts to contest both the validity of an expropriation and the amount of compensation offered. In practice, however, people who are already reeling from the loss of their farms, homes, business premises, or other assets will generally find it too difficult and costly to litigate.
The Expropriation Bill also defines ‘expropriation’ in a narrow way as the ‘compulsory acquisition’ of property by the state. This definition harks back to the flawed Constitutional Court judgment in the Agri SA case in 2013 – and is intended to ensure that the ‘assumption of custodianship’ does not count as an expropriation or require the payment of compensation.
Most people assume that the EWC threat in the Expropriation Bill stems primarily from the clauses authorising ‘nil’ compensation for land expropriation. But the even more serious risk is that the definition of expropriation in the Bill will be used to exclude the payment of any compensation when farming, mining, or other land is vested in the custodianship of the state under new statutes yet to be adopted.
Many commentators on the Expropriation Bill have tried to play down its damaging provisions by stressing that the state’s decisions on ‘nil’ or other compensation, if not agreed with owners, will have to be ‘approved or decided’ by the courts. However, the government is now intent on excluding the High Court from deciding on the compensation to be paid – and giving this task either to the magistrates’ courts or to a new Land Court.
The Land Court Bill has already been adopted by Parliament… [M]any of the judges appointed to the Land Court are likely to new appointees with a commitment to land reform but little experience on the bench. The Land Court will also be empowered to admit hearsay and other evidence usually excluded as unreliable. In addition, it will allow two ‘lay assessors’ – some of whom could be land reform activists – to overrule a presiding judge on all questions of fact (but not questions of law).
Decisions on the amount of compensation to be paid are likely to be tagged as questions of fact to be decided by these potentially partisan assessors. Whether the criteria for the payment of ‘nil’ compensation have been met – for example, whether owners have ‘abandoned’ their land and buildings by ‘failing to exercise control’ over them in the face of orchestrated land invasions – may also be regarded as questions of fact to be decided in the same way.
Though President Cyril Ramaphosa has repeatedly stressed that land grabs will not be tolerated in South Africa, in practice land invasions have long been encouraged by the damaging terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act of 1998 (the PIE Act). This statute requires landowners wanting to evict unlawful occupiers to obtain a prior court order authorising this. However, the courts may not order eviction unless this is ‘just and equitable’ in all the circumstances, bearing in mind the needs of women, children, and the elderly. Where unlawful occupiers have been in place for six months or more, alternative accommodation must also be made available (by the municipality or ‘another landowner’), failing which eviction cannot proceed.
These provisions in the PIE Act, coupled with major housing shortages, have encouraged large and well-organised land invasions, often mounted with the help of criminal syndicates. Hundreds of people commonly invade municipal and other land, where they swiftly peg off stands, put up shacks, and sometimes drop pre-built structures on to the ground. Once people have occupied these shacks – or, according to a recent judgment of the Cape Town high court – once they have moved beyond the pegging stage and come close to finishing their structures – PIE comes into play and court orders for eviction are required.
In recent years, the City of Cape Town has lost some 360 hectares of land in this way, making it harder for it to provide low-cost housing for those on its lengthy waiting list. Other municipalities have also experienced major land invasions. The Expropriation Bill, which allows ‘nil’ compensation to be paid for land which owners no longer control, could encourage even more land invasions of this kind. All that will be needed is for corrupt municipal officials to work together with criminal syndicates to invade, occupy, and then expropriate land for nil compensation…
[Instead of recognising its own major role in land reform failures,] the ANC continues to insist that the ‘solution’ lies solely in land nationalisation: to be achieved either through EWC or via uncompensated custodial takings. Both types of state appropriation are likely to gather momentum once the Expropriation Bill comes into operation. In the interim, the state’s constant focus on EWC has undermined business confidence, deterred fixed investment, restricted economic growth, added to the unemployment crisis, and helped promote a flight of capital and skills.
Once land nationalisation begins, further adverse consequences are sure to follow, as the Banking Association of South Africa (Basa) has repeatedly warned. According to Basa, South African banks have ‘extended R1.6 trillion in residential, commercial, and agricultural mortgages to borrowers’. If these bonded properties are expropriated or taken into the state’s custodianship for zero compensation, the mortgage debts in issue will still have to be paid off but most owners will lack the means to do so. Defaults will follow and property values will decline, often to the point where owners owe more on their mortgages than their properties are worth. This could affect the market value of all land-based property in South Africa (which Basa estimates at R7 trillion) and trigger a banking crisis.
Experience in Zimbabwe shows just how serious such a crisis could be. In Zimbabwe, writes Craig Richardson, associate professor of economics at Salem College (in Winston-Salem, North Carolina) and author of a book on Zimbabwe’s collapse, the saga began in 2001 when the country’s constitution was amended to allow EWC. Before long, he adds, ‘the Zimbabwean government declared itself the owner of all farmland’.
What this meant was that ‘banks and other property owners now held worthless titles’. Land became what Peruvian economist Hernando de Soto calls ‘dead capital’ because it could no longer be leveraged and used as collateral. The predictable results included a major sell-off of Zimbabwe equities by foreign investors, a massive exodus of farming and other skills, a sharp decline in agricultural and other production, a dramatic narrowing of the tax base, a sudden decrease in the hard currency that agricultural and other exports had previously earned, and crippling shortages of the food, fuel, and medicines the country needed to import.
As Richardson recounts: ‘Without hard currency in its coffers, the Mugabe government turned to the Reserve Bank of Zimbabwe to pay its bills. Annual money supply growth rose from 57 percent in January 2001 to 103 percent by the end of the year, inaugurating a cycle of devastating hyperinflation…By March 2006 it took Z$60 000 to buy one loaf of bread.’
South Africa is still far away from this haunting tale of woe. But, with the Expropriation Bill soon to be enacted and many other NDR interventions in the pipeline, there is no room for complacency. As Richardson points out, property rights are like ‘the concrete foundations of a building: critical for supporting the frame and the roof, yet virtually invisible to its inhabitants’. Take them away, however, and the structure can no longer stand.
