Give land to South Africa’s landless

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SOUTH AFRICA (ft.com) – Cyril Ramaphosa has called it the “original sin”. South Africa’s new president has pledged to correct “the violent dispossession of our people’s land”. That dispossession reached its height in 1913 when the Native Land Act set aside a miserable 7 per cent of terrain for four-fifths of the population. That segregationist act merely formalised a de facto policy that had gradually dispossessed black farmers, turning them into a rootless proletariat forced to work as cheap labour in gold and diamond mines. If all property is theft, the larceny in South Africa has been colour-coded for everyone to see.

Talk of land reform is back on the agenda in South Africa. In February, a matter of days into Mr Ramaphosa’s presidency, the African National Congress launched a review of the constitution that would allow more explicitly for expropriation of land without compensation. In doing so, it has buckled to pressure from the breakaway and radical Economic Freedom Fighters. It has also raised fears that South Africa could now go the way of Zimbabwe: driving whites off the land, spooking investors, wrecking the economy and endangering the country’s self-sufficiency in food.

Those fears are overdone. South Africa, for all its structural problems and festering injustice, is far from being a Zimbabwe. For one thing, it is Africa’s most urban society, with at least two-thirds of the population living in cities. For another, it has strong institutions that have weathered an assault by Jacob Zuma, the former president. Under Mr Ramaphosa, it is now in the hands of an arch constitutionalist.

The post-apartheid constitution already allows for land expropriation. Clause 25 permits property to be expropriated “for a public purpose or in the public interest”, a definition that could easily mean righting the wrongs of South Africa under white minority rule.

In practice, the ANC has hardly used the clause at its disposal. Far from doing too much land reform, it has done too little. Twenty-four years after the end of apartheid, there are still no clear records of who owns land, but even Agri SA, an industry group more optimistic than most about post-1994 transformation, estimates that 73.3 per cent of land is owned by whites, who make up just 8.4 per cent of the population.

Land reform is not only morally justified, it is socially and economically necessary

Ruth Hall, a professor at the University of the Western Cape, argues that, by contrast to the excellent property rights enjoyed under the ANC by whites, blacks have been less fortunate. The government routinely pushes people out of informal settlements and about 2m tenant farmers have been displaced.

“Expropriation of land rights without compensation is happening on an ongoing basis,” she says. “But it is poor and black people whose rights are being expropriated.”

Land reform is not only morally justified, it is socially and economically necessary. In per capita terms, Mr Zuma’s tenure constituted a near lost decade. Asian-style double-digit growth looks all but impossible, even under decent management. That leaves redistribution as one way of addressing entrenched imbalances resulting from an apartheid system that deliberately impoverished the black majority.

All over Africa — and in other parts of the developing world — land is not being put to work owing to the fact that it is not owned by those who occupy it. Rundassa Eshete, an Ethiopian critic of the government in Addis Ababa, calls it “dead capital”.

Farmers are not incentivised to work land they do not own. Nor can they use it as collateral to borrow. Much of China’s economic miracle came about by spiriting private property out of the “dead capital” of collectivised farms. Parcelling up land to smallholders was, as Joseph Studwell has written in How Asia Works, the foundation of economic take-off in Japan, Taiwan and South Korea.

Urban South Africa cannot repeat exactly the same trick. Not many blacks living in cities want to farm. That does not make land reform impossible. Many black South Africans live in peri-urban informal settlements to which they have no title. Some occupy city centre buildings long abandoned by landlords. In the countryside, many black farmers live a precarious existence on land owned by others, in many cases traditional leaders. The priority should be to formalise such arrangements. Giving title deeds or other official claims to those now landless would have a potent symbolic, as well as economic, impact.

Sensibly handled, land reform need look nothing like Zimbabwe. Mr Ramaphosa has been blamed by some for yielding to the ultra-left. In fact, he is yielding to the inevitability of history. If the ANC does not grasp the nettle, others will.

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