Wednesday, December 19, 2018
   
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Land expropriation 'a red herring'

The SA Property Owners Association (Sapoa), a representative body of commercial property owners in South Africa, has raised concern about the implications of expropriation of land without compensation in the sector, particularly on food security, agricultural production and the economy.

Neil Gopal, the chief executive of Sapoa, said the association supported a land expropriation process where the rights of present and future landowners were balanced with the need to ensure stability and economic growth.

Gopal said land reform in South Africa had to be done with cognisance of property rights and a need for a thriving and competitive economy.

"We understand that the country cannot afford to protect private property with such zeal that it entrenches privilege, creates further inequality and entrenches poverty," Gopal said.

"This is a recipe for instability. The guarantee of private ownership to ensure investment, in tandem with addressing the ills of the past, is fundamental to a stable democracy."

The concerns come as the land debate intensifies in the country, following Parliament's voting on the review section 25 of the constitution to pave the way for expropriation without compensation.

Econometric chief economist Dr Azar Jammine said the issue had been "overblown and was a red herring" and saw it as "political games".

Jammine said President Cyril Ramaphosa knew how difficult such a policy would be to implement despite it being official ANC policy.

He said "reality will hit the fan" when the government tried to implement such a policy, which he believed was an attempt to "pull the rug from under the EFF (Economic Freedom Front)" ahead of next year's general election.

"But I don't know how clearly they (foreigners) understand the political dynamics in South Africa and the way this is used as a political football.

"It is a risk because direct foreign investment could be dissuaded by this talk. Portfolio investment could come and go but investors in bricks and mortar will worry if their investment is safe," he said.

Bulelwa Mabasa, a director and land claims specialist at Werksmans Attorneys, questioned what would happen to the debt of banks if land was expropriated without compensation. Mabasa said the risk for the banks was that they would be left with the debt on the land that was currently mortgaged in favour of mortgagors.

Mabasa said it was also not clear whether or not the proposed amendments to section 25 of the constitution to permit expropriation of land without compensation would apply retrospectively or prospectively.

"Another question is the extent to which expropriation will take place.

"It remains to be seen whether or not it will only apply to agricultural land or whether or not it will include residential land too," Mabasa said.

"Whatever the final decision, the amount of debt at stake is likely to run into hundreds of billions of rand."

Roy Cokayne
The Sunday Independent

 
 

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