Posted on May 31, 2016

South Africa’s Expropriation Bill Passes in Parliament

The Economist, May 27, 2016

The alarmingly named Expropriation Bill, passed on May 26th by South Africa’s parliament, is being hailed by the ruling party as a victory for blacks who were dispossessed of their land by white colonists. More than two decades after the first democratic election of 1994, the vast majority of land is still owned by white South Africans. The African National Congress (ANC) has until now operated a “willing seller, willing buyer” policy of land reform. But this has proved slow and ineffective. Only about 8-10% of white-owned land has been transferred to black owners since the party came to power, a third of its target of 30%.

The new bill, which still needs to be signed by the president, Jacob Zuma, aims to speed this up, by allowing the state to expropriate land by paying an amount determined by a “Valuer-General”.

Critics fear the bill could affect agricultural production at a time when South Africa is recovering from a serious drought, as well as suffering from creakingly slow economic growth and an expected downgrade of its credit-rating to junk status later this year. Some white farmers look nervously to Zimbabwe and Robert Mugabe’s disastrous land reform policies of the early 2000s.

But others see the bill as more of a populist gesture, unlikely to have a substantial impact. The ANC is heading into municipal elections, set for August 3rd, in a weakened state. The Economic Freedom Fighters (EFF), an upstart rival that promises the nationalisation of mines and expropriation of white-owned land without compensation, has been drawing votes from poor young blacks. Through the Expropriation Bill, the ANC hopes to steal back some of its popularity.