South Africa Lawmakers Stymie Ruling Party Land-Seizure Plan

(Bloomberg) -- The South African ruling party’s plans to amend the constitution to make it easier for the government to expropriate land without compensation fell apart after it failed to secure parliamentary approval.

A bill that proposed changing a section of the constitution dealing with property rights was backed by 58% of lawmakers in the National Assembly on Tuesday, short of the required two-thirds majority. The ruling African National Congress decided four years ago that the amendments were needed to tackle racially skewed land-ownership patterns stemming from apartheid and colonial rule.

While the rejection of the bill is good news for investors and banks, it will provide ammunition for President Cyril Ramaphosa’s detractors in the ANC, who accuse him of failing to abide by its resolutions. Party directives to nationalize the central bank and establish a state lender that were taken in 2017 have also not been implemented. 

The rand pared its decline of as much as 0.8% to trade 0.3% weaker at 15.9676 per dollar by 4:52 p.m. in Johannesburg.

The ANC, which has ruled Africa’s most industrialized economy since the end of White-minority rule in 1994, has been riven by internal divisions over policy and who should occupy key leadership posts. While one party faction argues that the constitution already allows for the state to take land without paying for it, another insists that the lack of an explicit clause leaves it open to interpretation and ongoing legal challenges -- which would stall land reform.

The ANC controls 58% of the seats in the legislature and had hoped to enlist the support of the Economic Freedom Fighters, the third-biggest party, to change the constitution. While the EFF supports expropriation, it wants all land to be placed under state custodianship, whereas the ANC wanted a so-called mixed approach, whereby private ownership would still be allowed and land would only be seized under limited circumstances.

The ANC now intends to rely on another law that’s being processed by lawmakers and only needs the approval of a majority of them, to accelerate land redistribution, according to Paul Mashatile, the party’s treasurer-general. The Expropriation Bill states that land can be taken without pay when it is abandoned, held for speculative purposes, owned by the state or poses a health and safety risk.

The bill can’t be read separately from the constitution and its provisions are likely to remain open to interpretation, according to political analyst Lukhanyo Vangqa.

“Landowners who are offered nil compensation will forever be running to the courts to challenge the decision which will hinder the speed of the process of restitution,” he said.

Despite the constitutional change having been averted, the issue of land ownership remains a vexed one in South Africa. A government-ordered probe into the state of its land reform program found that within the prevailing legislative framework and at the current pace, settling land claims by those who were illegally dispossessed during the apartheid era would take 709 years.

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