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SA land reform still a muddy arena

Faranaaz Parker

President Jacob Zuma's recent speech shows that land reform is on the government's agenda but it's still unclear exactly what is being proposed.

South African President Jacob Zuma’s speech at the ANC’s 99th anniversary celebration shows that while land reform is on the government’s agenda, it’s still unclear exactly what is being proposed.

The country’s land reform programme is a sore point for government and little progress has been made in the 15 years since the end of apartheid. The programme originally aimed to transfer 30% of land to black ownership by 2014. But last year Minister of Rural Development and Land Reform Minister Gugile Nkwinte said the government did not have enough money to carry out the programme and that no new target for land reform would be set as there was not enough information to set a realistic target.

On Saturday, Zuma said that government would be looking at three forms of land holding—holding state land through leasehold, freehold with limited extent on private land, and allowing foreigners to lease but not own South African land.

He said: “If we as South Africa allow people to keep buying our land, we will end up with a country where other people own our land. This is why we need to be careful in how we handle foreigners who come to buy land.”

The ideas Zuma raised in his speech in Polokwane are said to draw on ideas contained in a draft green paper prepared by the Department of Rural Development and Land Reform which, though not officially released, is already in circulation.

Still on the agenda
The idea of limiting the terms on which foreigners can own land in South Africa was raised as far back as 2004. The government convened a panel of experts on foreign ownership of land, which reported back in 2006.

According to Ruth Hall, senior researcher at the Institute for Poverty, Land and Agrarian Studies at the University of the Western Cape, the panel could not conclusively determine the scale of foreign ownership or show whether foreigners buying land were impeding land reform. “It estimated that 2% of agricultural holdings were held by foreigners,” she said.

The panel recommended an ongoing investigation into the affect of foreign land ownership on land use and prices, and called for a moratorium on the purchase and sale of South African land to non-citizens.

At the time, analysts and estate agents warned that a moratorium would negatively affect foreign investment in property and the panel’s recommendations were not implemented.

Red herring
Experts say the devil is in the detail, and restricting foreigners to holding leases rather than land deeds will not necessarily affect investment.

“Foreign ownership is a bit of a red herring, in that limiting it will not simply resolve the problems facing land reform,” said Hall.

“Limiting the rights that foreigners can have to land is not unusual,” she added. “Many countries across the world do so without deterring foreign investors. Investors will need certainty and clear tenure rights, and long-term leases are often sufficient.”

She pointed out that restricting foreigners from owning land would place domestic investors, and not necessarily the rural poor, in a better position to expand their ownership.

Clarity still needed
Professor Cherryl Walker, a land-reform expert from the department of sociology at the University of Stellenbosch, agreed. “For some free marketers, any limits to unfettered private land ownership and transactions are seen as a threat to investment and the economy,” she said.

“But the extent to which they do indeed impact on the current market and land values will depend crucially on the specifics. [For] example, ‘leasehold’ could mean a 99-year lease or much shorter periods.”

She said there would need to be more clarity as to what is being proposed and asked whether the proposal would apply, for example, only to future transactions or perhaps only to non-resident foreigners or foreign-owned companies.

“One really needs more detailed proposals to be able to comment on what these proposals mean for land reform and it is critical that the green paper be released for informed review and debate. [There is a] danger that these could be more symbolic than substantive policy goals that actually benefit rural poor and the landless or tenure-insecure,” she said.


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