ANC's Land Expropriation Dilemma

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Joined: Fri Dec 29, 2017 10:47 am

Tue Aug 07, 2018 7:57 pm

South African president Cyril Ramaphosa's announcement that his government would implement land reforms caught some by surprise. It seemed to be a capitulation to Julius Malema's Economic Freedom Fighters (EFF) party. The EFF has for long called for forceful seizures of white owned farms, a position that has earned them a sizable number of followers who have become disillusioned with the ANC's failure, inability or refusal to implement land reforms. Nearly three decades after the official end of Apartheid, majority of black South Africans still live below the poverty line. This is despite the country being classified as the second largest economy in Africa and the 34th largest in the world. White South Africans, who account for less than 10% of the population, wield immense economic power. Malema's persistent calls for land reforms have put the ANC in an awkward position, with the EFF painting the government as the new oppressors. For that reason, Ramaphosa's announcement could be interpreted as ANC's attempt at winning back the support that has been eroded by the EFF.

Now the question remains how exactly the government will go ahead with the process of seizing white owned land. 139 farms have already been earmarked for expropriation, in a trial project that, if successful, could be expanded. The plan is to seize the farms without compensating the owners, which could prove to be a Herculean task. A similar project in Zimbabwe ended in disarray due to poor planning and corruption. Most white owned farms ended up being allocated to Robert Mugabe's cronies, who in turn had zero knowledge about running such huge enterprises. This led to a sharp downturn in Zimbabwe's agricultural production, which, coupled with western sanctions, resulted in economic disaster. Hopefully, Ramaphosa has learned some lessons from Mugabe's failure. South Africa's white farmers are also said to have used their farms as collateral and taken huge loans, so in case they're chased off, they will keep the money and leave the banks to pick the pieces. So on paper, the government will be confiscating white owned land, but in reality it will be owned by South African banks. So what happens in such a case? Does the government compensate the banks? What this means is that if not handled carefully, the land seizures could easily trigger a ripple effect that could adversely affect the entire economy.