#SONA2019: Will Cyril Ramaphosa make the right call on land reform?
As President Cyril Ramaphosa prepares to address South Africans and the world in his State of the Nation Address, the news that the Presidential Advisory Panel on Land Reform and Agriculture has finally handed its report to him and his deputy, David Mabuza, could foreshadow a new crisis.
That is, if it is not handled with far more aplomb than some recent controversies.
The Panel was set up in September last year to provide advice and input on the land reform process. Cynics might suggest that this is suspiciously reminiscent of that great national tradition of avoiding action by subjecting a matter to perpetual (and competing) consideration.
However, given how land politics has been pushed to the forefront of our public conversation, any pronouncement on it will be keenly watched.
This is entirely predictable. A leaked version of the document, reported on in April, seems to yaw in the direction suggested by recent legislation and policy utterances. Indications that it could lead to a ‘compensation policy’ – which would introduce a form of expropriation without compensation – have already reportedly prompted concerns. Certainly, Dan Kriek, president of the country’s premier farming body, Agri-SA, took sufficient issue with the contents that he declined to endorse the whole report, apparently submitting a minority report instead. (It will be interesting to learn whether this formed part of the handover.)
Even more attention is likely to be paid to the response of President Ramaphosa. The past few weeks have underlined just how perilous the country’s economic situation is. GDP figures saw a contraction – quite remarkably for the first quarter of the year, in which activity typically shows an upturn. Prospects of achieving the economic growth that South Africa so desperately needs now seems a distant prospect.
This will, as the IMF has pointed out, compound the country’s overall fiscal difficulties.
Comments from the ratings agencies have been no more positive. Moody’s, which has retained South Africa at investment grade as its peers have downgraded the country, offered a sour prognosis: ‘In the absence of effective policy change, the sovereign’s credit profile will most likely continue to erode, with fiscal strength weakening and growth remaining low. Fading prospects of policies that will sustain fiscal and economic strength, alongside any signs of diminishing resilience to shocks, would put downward pressure on the country’s rating.’
In other words, we may be facing the double-barrelled shock of a recession and a ratings downgrade.
This is premised on the idea that there will be insufficient appetite for reform on the part of government. But an understated threat is that there will, in fact, be reform of a sort. This is the reform that seeks to double down on moving along the path of statism (in the absence of anything resembling a capable state) and political control that has already inflicted great damage.
The furore in the past few weeks about the status of the Reserve Bank, and the possibility of South Africa attempting to print its way out of trouble, should sound a warning.
No favours have been done recently to the country’s prospects to draw in the investment it needs to propel growth, whether that be domestic or foreign. But President Ramaphosa and his colleagues (in this sense at least, he stands alongside the ANC’s Secretary General, Ace Magashule) have wrought arguably greater damage over a much longer period by their dogged adherence to EWC.
To reaffirm a commitment to continue down the road towards EWC will be to invite a blow to the country’s aspirations from which it will struggle to recover. Doing so will sound an intention to degrade the protection of property and to expand the remit and discretion of the deeply compromised state.
And it will be heard as such.
* Terence Corrigan is a project manager at the Institute of Race Relations.