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Populism wins out at Nasrec

News Analysis

Populism triumphed at the ANC conference on Wednesday when the party passed a resolution in favour of land expropriation without compensation as well as one to nationalise the South African Reserve Bank (SARB).

While the question of the Reserve Bank’s state-ownership appeared a done deal before the conference commenced, the resolution on land was unforeseen and tensions over the issue almost collapsed the conference.

This followed an announcement from Jacob Zuma on Saturday, when the conference began, that free higher education would be implemented for students from households earning up to R350 000, starting in 2018.

On Wednesday night the ANC chair of the sectoral commission on Economic Transformation, Enoch Godongwana announced that the party had resolved to seek a contentious change in the Constitution to allow expropriation of land without compensation.

The resolution however also required this only be done if sustainable and without harming other sectors of the economy. Part of the resolution was that there should be no illegal occupation of land.

The prickly issue had found its way onto the table during discussions at the party’s policy conference in July.

ANC spokesperson Zizi Kodwa denied accounts that delegates had come to blows on Wednesday night over the question of land, after a journalist tweeted video of what appears to be a fracas between delegates.

Although no one was beaten, Godongwana said discussions were tough and rowdy “and it nearly collapsed the conference … there is no doubt about that,” he told reporters.

According to one insider, the discussions in the economic transformation commission went smoothly. But when the commission reported back to delegates in a plenary session, a disruptive group gathered and forced the issue of expropriation despite the majority not being in favour of it. 

“The final conclusion is, we agree the national executive committee will initiate some amendments in the Constitution’s section 25 in order to achieve expropriation without compensation,” said Godongwana.

But, “for that to happen, it must be sustainable.”

Conditions for sustainability are that it must not impact on agricultural production, food security and other parts of the economy. “Important for us is the sustainability test,” he said.

Debt on agricultural land is estimated at R160-billion, with 70% of that being owed to commercial banks Godongwana said. “We are aware whatever we do we should not impact on the financial sector, we should not impact on another sector’s narrative.”

There was no deadline to decide on the issue as an informed decision was required. “There is no rush to change the Constitution, there is detailed work to be done in this regard,” he said.

Godongwana refused to gives his own personal views on the land matter – although he said one could suspect what they were – and said he was simply communicating the party view in line with the resolution.

The resolution to nationalise the Reserve Bank was uncontested. Only a handful of central banks globally are held by private shareholders and South Africa’s is one of them. The move is anticipated to have no impact on how the bank operates. Changing the mandate of the bank, although this was up for discussion, was not adopted as a resolution Godongwana confirmed.

The ANC however developed a proposal to nationalise the bank in a manner “that does not benefit private shareholder speculators”. The bank has a number of private shareholders, some of whom have said that they will not permit the nationalisation of their shares without compensation. Shareholders such as German national Michael Duerr believe the shares trade at well below their value – in the region of around R4700 – rather than the R9.60 last traded.

Asked how the state could afford to buy the shareholding, Godongwana agreed with comments from the press briefing floor that the government did not have the cash to do so.

National Treasury is already facing a revenue gap of R50-billion and will have to find as much if it is to fulfil Zuma’s free higher education commitment. — with additional reporting by Lynley Donnelley

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