AfriBusiness strongly opposes expropriation without compensation

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Gugile Nkwinti, Minister of Rural Development and Land Reform, said that property for purposes of land reform should be expropriated without compensation. This was the Minister’s contribution to the debate during Pres. Jacob Zuma’s state of the nation address to fulfil Zuma’s ideal of radical socio-economic transformation with regard to land reform.

This seems to suggest that Government is attempting to follow the same route that has been taken in Zimbabwe with regard to property rights. This becomes especially evident when the Minister refers to making the necessary constitutional amendments to give effect to the process. The specific sections in the Constitution that currently prohibit the acquisition of property by the state without providing compensation are sections 25(2)(b) and 25(3).

These sections determine that the expropriation of property is subject to just and equitable compensation, as well as how this is to be calculated. The suggestion that amendments should be made thereto in plain terms means that Government is more than willing to infringe on private property rights in order to push its political agenda, without any forethought to the consequences that might spread therefrom.

Rating agencies take a keen look at legislation and policies that have a negative effect on property rights and ownership in a country when determining a country’s credit rating. If Government is serious about expropriation without compensation, a severe ratings downgrade might be imminent.

Pres. Zuma has sent the Land Expropriation Bill back to Parliament due to qualms about public participation and whether the Bill will pass constitutional muster. The Bill still provides that just and equitable compensation is a requirement, but we now know that it is Government’s intent to do away with this requirement.

“AfriBusiness will not hesitate to institute legal proceedings to protect, defend and uphold the Constitution. Should Government pass any form of legislation that seeks to undermine the sanctity of property rights in South Africa, it will be faced with strong opposition,” says Armand Greyling, Law and Policy Analyst at AfriBusiness.