by Hannes Wessels
Just recently I have received a flurry of emails and messages signaling alarm at the contents of the Expropriation Bill which is soon to go before the South African Parliament where it seems certain to become law. I have no doubt that the DA will launch a spirited attack on the provisions, but as we have learned to know, the voice of reason is very unlikely to prevail. I did, however, note with wry resignation that many of the people who are now expressing concern about this turn of events, are staunch members of the Trump- hating brigade which included most South Africans.
The summary of the Bill, spread widely on social media which has triggered justifiable concern, sets out the procedures that expropriating authorities such as municipalities and other government agencies need to follow in order to dispossess people (read largely Whites) of their property. What has been pointed out that is of great significance to all South Africans is:
- The law applies to all property; movable and immovable not just agricultural land and may include intellectual property rights.
- An ‘expropriating authority’ such as a cash-strapped municipality will be granted great latitude in deciding whether to expropriate, and how much compensation to pay. Given the fact that most municipalities are insolvent, I think it is safe to say people should not get their hopes up regarding any degree of fairness in this evaluation process.
- The list of the five categories of land subject to no compensation is not a closed one and can easily be extended in practice. In addition, the proposed amendment to Section 25 of the Constitution will expressly allow expropriation without compensation of land and the improvements on it in circumstances decided by Parliament from time to time.
- After a property owner receives a notice of intention to expropriate, the individual can make representations. The expropriating authority must consider these representations but is not obliged to respond to them. Instead, the expropriating authority can proceed to issue a notice of expropriation.
- Ownership and the right to possession passes to the expropriating authority on the date on which it appears in the notice of expropriation. Irrespective of whether there is a dispute or not, the expropriation date could be as soon as the day after the date of the service of the notice.
- If the process happens quickly property owners may only be able to challenge the expropriation in court after they have lost the property and perhaps also the means of earning an income to pay for the litigation.
- The property owner will bear the onus of proof in any such litigation. This means the litigant will have to pay his own, and probably the State’s costs as well if unsuccessful.
- Mortgage bonds will be terminated on the date ownership passes to the state, but former owners will remain liable for their outstanding loans to the banks regardless of the quantum, if any, of the compensation.
In the context of the times and considering the mood of the majority of South African voters who are poorer than ever, and increasingly desperate for relief, the appeal of the populists like Julius Malema is growing. They promise an immediate and massive, redistribution of wealth, through relieving the perceived ‘rich’ (mostly white) of their ‘ill-gotten gains’. This is why the ruling ANC must now move quickly on this issue so as to retain majority support. Just as in Zimbabwe, Mozambique, Tanzania and many other African countries, the actual economic consequences of this action, will be brushed aside.
In the hubris of the new Biden era, what I have taken the liberty of pointing out to my Trump-hating friends and acquaintances, is my belief that the passing of this legislation, was probably delayed until the election defeat they have recently celebrated.
Last year, former Secretary of State Mike Pompeo, bluntly explained his administration’s view on this matter. After pointing out that in his view foreign aid has done little to alleviate poverty in Africa, he went on to remind his audience that centralised planning based on executive fiat had not worked in Africa, and specifically referred to Zimbabwe Tanzania and Ethiopia. Pompeo argued that African economies need “strong rule of law, respect for property rights and regulation that encourage investment”. Against this backdrop he lamented the fact that South Africa was then debating an amendment to permit the expropriation of private property without compensation. “That would be disastrous for that economy,” he said, “and most importantly for the South African people.” Just so the South African government knew he was prepared to match words with actions, he intimated that the trade benefits flowing to the country under AGOA (African Growth and Opportunity Act) would be jeopardised if the legislation was passed. Well, the ANC must have heaved a hefty sigh of relief when he and his boss were voted out of office.
I fear I can see it coming; twisted statistics and tropes will fuel the propaganda campaign to justify the policy. Just as in Zimbabwe where the mainstream media plugged the line that 70% of the ‘best’ land was owned by a tiny number of whites, exactly the same argument will be made in SA. Just as Mugabe did, President Ramaphosa will explain he is committed to amending the constitution to allow land expropriation without compensation in order to tackle the ‘historical injustice’ caused by white-minority rule.
I have little doubt this rationale will resonate with the Biden Administration and help South Africa speed up the journey on the road to ruin. I suppose all one can say to those in South Africa who welcomed this, is be careful what you wish for.