JOHANNESBURG – At its 54th national elective conference in December 2017, the African National Congress (ANC) resolved that it would seek a change in the constitution to allow for the expropriation of land without compensation. The public consultations are ongoing to amend section 25 of the constitution.
The assumption was that expropriations will only apply to empty, rural lands. So far most of the claims since 1994 took place in the hinterland, where people were given land or money. “If they took the money their claims for land are no longer valid,” one expert suggested. Unfortunately the focus on this topic was narrow and had not gained momentum.
Before he started to change tune perhaps for easy votes, Democratic Alliance (DA) leader Mmusi Maimane said the proposed land reforms are “not economically viable” and will not expand the wealth to poor South Africans. Actually it seems that he had not thought carefully about the land question before he commented. The truth is that property owners in urban South Africa stand to benefit a great deal from land reform, when land ownership is transferred to the state.
Let me demonstrate how everyone stands to benefit from land reform in South Africa.
Wits academic and economist Professor Chris Malikane once wrote on Facebook that “the people of Protea [a Soweto suburb] have the most advanced scientific understanding of the land question.”
When prompted by another person what he exactly meant by this statement, Malikane responded, “Protea residents say the houses are worthless, hence they are overvalued.” In this regard, they pay R5000 monthly mortgage for their houses which they then brilliantly connect to the land issue. Their argument is that land should be actually free since it was stolen.
Malikane goes on to say, “So if you deduct the fictitious land value from the mortgage, the cost of the house should be around R1500 [instead of R5000].” This sends shivers to banks who collect more than twice the actual value of a house over a 20 year period.
Banks are filthy rich while the rest of the population is becoming poorer every day. Thus, the land question has potential to reduce poverty, create more economic opportunities and significantly reduce the power of capital as well as that of foreigners in the South African economy.
To achieve this, Malikane’s long standing argument has always been that land in South Africa should be wholly owned by the state. The underlying view is that citizens should all pay rent to the state rather than to the greedy elites and banks, including residential, agricultural, mining and commercial land.
We know that most of the land in South Africa (not counting tribal lands) belongs to the white aristocracy, not government. Simply put, cadstral maps fail to show who the real landowners are for one reason, landowners do not want to be known.
Taking the argument further, two friends built houses in Estcourt and former KwaNdebele, both located semi-rural communal land. If they were to be properly valued and also supposed they were in our glorified upmarket Gauteng or Durban North suburbs, the two properties could easily fetch about R3m to R4m in the market.
What was remarkable though is that they spent around R200k to build because land is free of charge outside the metropolis. The two compatriots do not have a permanent albatross around their necks in the form of unending bond repayments. Since the two houses are not in Waterkloof or Umhlanga, banks refused to be involved in any manner. They declined one of the friends a loan to furnish the kitchen on grounds that he had no title deed.
How come banks refuse to provide finance for customers to buy houses in communal land or rural areas?
The proposal is to turn all land in the country to be 100 percent state-owned irrespective of location. In this way, it will be possible not only to get the black majority in South Africa involved in the economy but also this model will create a single land ownership regime for the whole country. Furthermore, it will be possible to conjoin the economy with desired political outcomes. At present economic activity in rural areas and townships is not accounted for in the gross national product.
According to Peruvian economist Hernando de Soto, “Unreported, unrecorded economic activity results in many small entrepreneurs who lack legal ownership of their property, making it difficult for them to obtain credit, sell the business, or expand.”
He further argued, “The existence of such massive exclusion generates two parallel economies, legal and extra legal. An elite minority enjoys the economic benefits of the law and globalization, while the majority of entrepreneurs are stuck in poverty, where their assets—adding up to more than US$10 trillion worldwide—languish as dead capital in the shadows of the law.”
The logical intervention is therefore to ensure sameness of rules and also reducing the hold of banks on ordinary citizens is to transfer land ownership to the state. The argument for title deeds distorts the argument because people are worried about transferability tether than creating equality and empowerment to the marginalised.
Legacies of colonialism
Refusal to reverse the legacies of colonialism and apartheid imply that the land question is bound to divide the South African society more than it is today.
An elite minority, which remains largely white, appear content with the present status quo where the black majority is excluded from economic benefits of the law through the maintenance of a dual property ownership system in South Africa. This is achieved via old-fashioned Roman-Dutch law which deviously found way into the country’s constitution in the democratic era.
What is sad is that in areas that now form the huge area of the Tshwane metro and beyond, farms were stolen and removed from the national asset register. The loot that took place towards the end of apartheid rule. This topic remains a no-go area for anyone seeking justice. See the cases concerning South African Reserve Bank v Public Protector and Others/ ABSA Bank Limited versus Others pertaining to the “Alleged Failure to Recover Misappropriated Funds” to the tune of R1.125 billion.
Nobody wants to take responsibility for large amounts and assets stolen before the black majority government took over in 1994.
Stealing of immovable property like land, dams, houses and farms also took place at a large scale. The stolen goods were “regularised” in a number of ways. The case of Pretoria East farms make an interesting study of how stolen lands have ensured that the white minority elite not only continue to benefit from the loot but also manage to retain the area’s whites only image two decades after the end of apartheid.
Criminal elements in high government positions then unashamedly stole state farms in an area from Lynnwood to Bronkhorspruit. The majority of these farms were allocated to the University of Pretoria, Department of Agriculture, CSIR, NRF, etc. for agrarian and research purposes. Other stolen pieces of were around Hatfield and Pretoria North, close to where the Tuks school for veterinary sciences is located.
The majority of the capital city and surrounds, from Rustenburg to large parts of Mpumalanga, were government sites for a variety of purposes: nuclear and defense research (Phelindaba, SANDF, Armscor, etc.), aviation, security and defense (Denel, intelligence, police, etc.), sheltered employment and state industries (Yskor, Transnet, Mannekraag factories in Silverton and Pretoria West, etc.) and so forth.
After all these farms disappeared, Pretoria has had unexpected and inexplicable growth in areas away from the city centre. Strangely no one has asked who owned the land before sprawling suburbs emerged close to Verwoerdsberg (Centurion), Pretoria East and Pretoria North. Nevertheless the criminals took advantage of the situation and collude(d) with banks and major companies/ corporatives (korporatiewe) to develop new suburbs of Silver Lakes, Equestria, Mooikloof, Woodlands, etc.
This criminal activity has gone unpunished since 1994. The outcome of this is that the Pretoria east area is ‘lilly-white’ since people cannot afford stands that cost no less than R1m, in areas that do not even have public schools, public facilities, pavements, roads, etc.
The perspective on land ownership and property rights advanced by Malikane is very important because it contributes to the current discourse on land restitution in South Africa. Generally, when the topic of expropriation of land without compensation comes up everyone assumes that it only refers only to farmlands. But, the truth is that everywhere land is priced above what ordinary citizens can afford. It therefore makes sense to nationalize all land from Beitbridge to Cape Town and from Ngwavuma to Springbok.
Malikane adds to say, “This is a crucial RET [radical economic transformation] perspective on land.”
In South Africa, buying a home is considered a cultural rite of passage. But do we seriously need to own houses? This belief system makes bankers richer, and all of us poor. We can use money “locked up” in our homes to educate and feed our children. Unfortunately all the money goes to paying for land, indirectly or directly.
At least we now understand that the issue of land does not only apply to the rural areas where chiefs, miners, farmers and others have interest. But it also concerns title deeds that are currently in the possession of banks, corporations and individuals in urban South Africa.
As a start, expropriations of land must cover the urban areas. The result will see prices of houses significantly drop and thus shifting power from capital to citizens. People must be given hundred year leases for all types of land that they want to use. Ownership must vest on the state.
If this privilege of land ownership is not extended to everyone, the gap between those who have and the poor will forever grow. Land is supposed to be free like oxygen that we breathe. It is not a commodity that must be sold and or held in private hands.
Siyabonga Hadebe is executive manager at South Africa’s Department of Labour responsible for the management of international relations portfolio for the Department. His views do not represent his employer.
The views expressed here are not necessarily those of Independent Media.
- BUSINESS REPORT