Last week the South African President Cyril Ramaphosa addressed the nation and announced that the ANC would be pressing ahead with the policy of expropriation without compensation. This would mean changing the South African constitution to allow the confiscation of private property without monetary restitution (EWC). It wasn’t an entirely shock move by Ramaphosa, he had been making statements to this effect for some time now. In June he said:
“One of those is to expropriate without compensation to unlock the wealth of this land, which has been held in few hands from the days of colonialism. That alone should be able to add an injection to the growth of our country.”
Readers of Imagine Athena will not need convincing that undermining property rights is a disastrous move by the ANC and augurs ill for the South African economy. It has never worked and there are numerous historical examples of how disastrous it can be. What is the definition of madness again?
However, despite Ramaphosa’s official backing of the EWC policy, there is still a political and legal process that needs to be followed. The EWC bill is still under consideration by the Constitutional Review Committee and, undoubtedly, it will face many more legal and parliamentary challenges before it could ever be made into law.
Some argue that Ramaphosa is not completely committed to land reform and is simply trying to drum up support for the ANC with populist rhetoric before the general election in 2019. The ratings agency Fitch puts forward that argument and predicts that “radical land reform is unlikely in South Africa” and rather that any amendments the ANC seeks to the property clause of the constitution will clarify under precisely what conditions EWC is permissible (still not great, they shouldn’t be messing with property rights at all). Political Analyst John-Kane Berman at the Institute for Race Relations, however, disagrees with this notion and argues that Ramaphosa “should no longer be given the benefit of the doubt”. Kane-Berman says,
“Some analysts think that Mr Ramaphosa can win the 2019 election on the basis of EWC promises which he will then quietly forget as he puts the genie back into the bottle. This is wishful thinking. What do they expect him to say: “Sorry, comrades, I didn’t really mean it, but thanks for your support anyway“?
South Africa is currently facing significant economic challenges and the EWC bill could not have come at a worse time, just when the country is looking to go on a foreign investment drive. Whatever game Ramaphosa is playing, it is certainly a risky one.