Some seem to believe that the Expropriation Act is the same as land reform, but in fact, they are not the same.
There was much concern last week when President Cyril Ramaphosa signed the Expropriation Act into law, with speculation rife that it could even sink the government of national unity (GNU). However, an expert says the fanfare about the Act’s consequences is not warranted.
The Expropriation Act repeals the Expropriation Act of 1975 and sets out how government can expropriate land in the public interest for various reasons, including without compensation.
Professor Waldo Krugell, an economics professor at North-West University in Potchefstroom, argues that people are exaggerating the consequences of the Expropriation Act, setting off significant backlash from the public, as well as some political parties, while others praised it.
Was all the fanfare warranted? According to Krugell, the answer is an unequivocal “no”.
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Signing of Expropriation Act not crisis it is made out to be
“President Ramaphosa’s signing of the Expropriation Act is not, on the face of it, the crisis that some people make it out to be. It is important to remember that the state always had the power to expropriate.
“The process of updating the law began in 2004 and last week’s signing of the Expropriation Act is not directly related to the debate on expropriation without compensation of 2017 and 2018. This new Act replaces the original law of 1975 and defines the circumstances where the state can expropriate land in the public interest.
“It also defines the process the state must use to engage property owners and compensate them. The law will now be applied and interpreted by the courts,” Krugell says.
He adds that although the reaction to the signing of the Act might have been exaggerated, a clearer, more focused message would have done wonders to allay market fears.
There was a lot of criticism for the president signing the Expropriation Act just after he told world leaders at the annual meeting of the World Economic Forum that South Africa is open for business and that their investments in South Africa will be safe.
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The fanfare about the Expropriation Act says a lot about SA politics
“The fact that this sometimes sounds like a crisis says something about our politics. People feel the state can expropriate, but not everyone trusts this government to do so fairly. Political analysts say the president signed the Expropriation Act now because he had to send a signal to ANC loyalists that he still supports their agenda of the National Democratic Revolution.
“I do not know if that faction of the MK party can still be persuaded, but the signal does nothing for the unity in the government of national unity.
“For the sake of investors and the economy, one would much rather hear a focused message of market-oriented reform. Research shows that policy uncertainty is bad for investment and low levels of investment are bad for economic growth.”
Krugell says faster growth is the only way to create opportunities that can reduce the inequalities of the past.
The Expropriation Act went through a five-year process of public consultation and parliamentary deliberation and aligns legislation on expropriation with the Constitution, according to the Presidency.
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Is the Expropriation Act in line with the Constitution?
Section 25 of the Constitution recognises expropriation as an essential mechanism for the state to acquire someone’s property for a public purpose or in the public interest, subject to just and equitable compensation being paid.
Until now, property expropriation has been governed by the Expropriation Act of 1975, which predates the expropriation mechanism provided for in Section 25(2) of the Constitution. The Expropriation Act outlines how and on what basis expropriation can be conducted.
The new law will assist local, provincial, and national authorities in expropriating land in the public interest for various reasons to promote inclusivity and access to natural resources, the presidency says. The Expropriation Act also provides for disputes to be referred for mediation or to appropriate courts.
