Posted on July 30, 2004

Mbeki’s Plan For Land Redistribution

Basildon Peta, Independent (UK), Jul. 30

The South African government is considering new regulations to limit foreign ownership of property in South Africa, in a move that would directly affect British investors.

The proposed measures, which are still being worked out by the government, are an attempt to deal with soaring property prices caused by rich foreigners buying properties in South Africa, pushing local people out of the market. A large number of Britons, have bought homes in Cape Town, taking advantage of the strong pound against the South African rand.

The main opposition Democratic Alliance yesterday attacked the proposed move on the ground that limiting foreign property ownership would discourage investment.

Meanwhile, South Africa’s white landowners are angry over a tough black empowerment policy proposed by the government to transfer half of white-owned agricultural land to blacks. The draft agriculture empowerment policy announced this week by Thoko Didiza, the Agriculture Minister, also requires 35 per cent black ownership of mainly white- owned agriculture based companies by 2008. This means white-owned agricultural companies would have to start selling equity to blacks, if the policy is adopted in November.

The policy would also require 10 per cent ownership by farmworkers of all farm-level enterprises by 2008. Another requirement is for agricultural enterprises to spend 50 per cent of their money on buying goods and services from black-owned companies by 2010, a target that increases to 70 per cent by 2014.

White farm owners say the plan sets “unrealistic” targets and would set South Africa on the route taken by its southern neighbour, Zimbabwe. Agri South Africa, representing 40,000 commercial farm owners and 45,000 smaller-scale farmers, said the plan to transfer half of productive farmland to blacks by 2014 sets out goals that may be hard to reach. The Transvaal Agricultural Union, a hardline white farmers’ group, charged that “South Africa was now following Zimbabwe’s path”. Another mainly white farmers’ group, Grain South Africa, said the policy had failed to take into account concerns raised by farmers in negotiations with the government before the draft policy was compiled.

Ms Didiza said the new initiatives were meant to facilitate the entry of blacks into the farming sector. “The objectives [of this policy] are to eliminate racial discrimination in the agricultural sector,” she said. The plan means black farmers will own 30 per cent of agricultural land by 2014 while another 20 per cent will be available for lease to black farmers. Thirty-five per cent of farm businesses will be black-owned by 2008.

Under apartheid, the best farm land was reserved for whites while impoverished blacks were systematically driven off their land. South Africa’s first black president, Nelson Mandela, launched reforms in 1995 to try to rectify the land ownership patterns in South Africa. However, very little progress was made under Mr Mandela’s policy, in whichland redistribution was voluntary.

President Mbeki’s government estimates that only 3 per cent of land has been acquired under this system. It has thus drawn the controversial draft charter on black empowerment in the agricultural sector to try and expedite land reform.

But Mr Mbeki has often been warned that land reform is an emotive issue and can create chaos if not handled properly.

Analysts said because of the low margins in agriculture, it would be very difficult to fund the transfer of land and the purchase of equity in agribusiness by blacks in the four-year deadline.

Ms Didiza conceded that funding was a challenge.

Unlike the Zimbabwe government, South Africa has pledged to compensate farmers who lose their land, although the details are not spelt out.

Motsepe Matlala, president of the National African Farmers Union, whose members suffered under apartheid policies, said the targets were important.