STUART THEOBALD: Impasse shows security of land rights hinges on accessibility and justice

Posted in: Economics, Politics, South Africa on July 5, 2021


Standoff between ANC and EFF is due to people feeling they cannot accrue tangible economic benefits.

This column was first published in Business Day. 

With the ANC and EFF at loggerheads over amending section 25 of the constitution, it may well end up not being amended at all. That is a good thing, but the question of property rights is far from resolved.

Countries with weak property rights have lower investment rates and lower economic growth. There are very few “facts” in economics that are so well supported by evidence. Thousands of studies corroborate this from countries as diverse as Benin to Japan. But don’t think just because section 25 goes unamended we have strong property rights.

Security of rights tends to be advocated at the expense of the accessibility and justice of rights. Until the latter two facets of property rights are dealt with, security will always be weak. Those who trumpet the importance of security lack credibility because they already have property and are concerned primarily with protecting their existing assets. The argument is thus unpersuasive.

The distribution of land (and to a lesser extent other property) in SA is profoundly unjust. It is the result of apartheid and colonial dispossession before it. Writers such as Tembeka Ngcukaitobi and Charles van Onselen have meticulously detailed how colonial administrations systematically disposed black South Africans before apartheid codified and enforced an all-encompassing property rights regime that systematically endowed white people.

Property rights are also not particularly accessible. About 60% of South Africans have no recorded land or property rights while those who do, face increasingly dysfunctional administration of these rights. Many, including beneficiaries of land reform, have tenuous and unclear rights that retard their ability to use their property to be economically active.

Social acceptance

While the debate has been focused on amending section 25 of the constitution and the Expropriation Bill, societies that have reliable property rights have them because they are accepted as important concepts across a population. The wording of legislation must reflect social attitudes, or forever face instability. The political volatility around property rights exists because of the gap between legislation and social attitudes.

In the case of SA, we have not reached a level of social acceptance because we have not properly dealt with justice or accessibility. If people felt that property rights gave them tangible economic benefits and that the distribution of rights was about justice, we would not be having our current debate. In this environment you find radical populist policy such as the EFF’s, which would dispossess everyone of property rights, through to the ANC’s somewhat unclear policy of expropriation without compensation, but only when appropriate.

There is no easy fix. Security is fundamental but fixing historic injustice and making property rights accessible is often in tension with security. Despite it being clear policy, we have failed to deliver redress of past injustice and we have failed to make rights accessible.

We have been trying since 1994 to get this right. The land reform programme, while not aggressive enough in design, has manifestly failed on its own terms to deliver correction for past wrongs. As the Presidential Panel on Land Reform reported in 2019, the state has delivered 8.4-million hectares of land between 1994 and 2018, about 10% of commercial farmland compared with the target of 30% by 2014. We have also been notionally committed to giving the occupiers of land some degree of tenure over that land and fallen far short of targets.

Populism problems

It is glib to point out that this outcome reflects corruption and ineptitude on the part of the government. The failure of the land reform programme and land tenure is a failure of leadership and administration. This has been an awkward background fact for the ANC to deal with, making amending section 25 a politically easier focal point.

The political process, in which the ANC and EFF are at loggerheads — meaning there will not be the required two-thirds majority to amend the constitution — suffers the usual problems of populism rather than an honest grappling with the problems. The populism is driven by public revulsion at those who trumpet security of rights over redress or accessibility.

The political process should be much more honest about two things: the problems we face on land predominantly reflect administrative failures rather than the constraints of the law; and the undermining of the security of property rights will have very real and serious economic consequences. Those economic consequences are not primarily about land, though that is important.

The economic literature is clear that everyone from software engineers to subsistence farmers do not create assets unless they are confident they will continue to own them in future.

One obvious own goal that can be dealt with is the overly wide scope of the Expropriation Bill to all property — physical and intangible — that provides no benefit in terms of land reform and only harm in terms of security of property rights. But the fundamental reform we need will be a harder long-term process requiring genuine political skills and commitment to the public interest.

• Theobald is chair of research-led consultancy Intellidex.

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