Economic disaster over land must be avoided at all costs

The ANC believes the “silver bullet” for all South Africa’s woes is Expropriation Without Compensation (EWC), yet it could actually be the projectile which finally executes the economy.

No one has, apparently, thought through the implications of widespread seizure of property.

There has been attention paid to the fact that investors will not want to put their money into a country where their money is not safe.

The ANC’s response to this – often by its chief marketer, President Cyril Ramaphosa – has been to poohpooh fears by implying that, only in exceptional cases, will land be taken without compensation and the most deals will be done on the “willing buyer, willing seller” principle.

At the same time, however, Ramaphosa is also backing an amendment to the draft expropriation laws which would remove from the courts the power to decide when no compensation should be paid. This will now lie in the hands of the executive.

Most alarmingly, though, nobody has addressed the problem of what happens to bonded property which is expropriated without compensation … which applies to a huge chunk of land and its improvements.

Banks say the debt must be settled. But – by whom? Government cannot afford to – or it would not have proposed EWC in the first place. Nor should bond owners be forced to pay for something which has been taken from them. Making the banks carry the loss would make the economy and financial system collapse.

That collapse will inevitably happen because land seizures will lead to a drastic decline in confidence across all sectors. That is what happened in Zimbabwe, and in Venezuela, which both followed land confiscation policies and believed those would lead to a socialist Utopia.

We hope that there are still some sensible people in the ANC left and that the disaster can be avoided.

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