Central to President Ramaphosa’s plans for revitalising South Africa is ‘a massive increase in investment in the productive sectors of the economy.’ What does this mean for land reform and the prospects for growth, development and job creation in the agricultural sector?
The bottom line is that new farmers on redistributed land will not be successful and new jobs will not be created unless the productivity of land is improved. Productivity will not improve unless investment in agriculture is increased. Government cannot generate such investments, so growth and jobs in agriculture can only be produced by the private sector. Encouraging this kind of investment requires a new and different approach to land reform.
How can the environment be made more supportive?
The first principle should be to refrain from changing the Constitution. No constitution is inviolable and there can be occasions when a constitution should or must be changed. However, some parts of a constitution are more sensitive than others; given the enormous economic challenges we face and the collapse of economic growth over the last decade, property rights is an area of particular sensitivity.
Blaming the Constitution for the failure of land reform is a classic piece of political misdirection; acting on it will at best raise uncertainty and reduce investment and at worst provoke a banking crisis that will destroy institutions such as the Land Bank, spill over into the rest of the economy and make everybody, particularly the poor, worse off.
A second priority is to clear the decks. The 2017 High-level Panel Report to parliament chaired by former president Kgalema Motlanthe estimates that there are more than 7,000 unsettled pre-1999 claims and another more than 19,000 unfinalised. Since then thousands of additional claims have been lodged, all of which remain unresolved.