How to Stop a South African Land Grab

President of South Africa Cyril Ramaphosa gives a press conference after a EU-South Africa Summit meeting at the European Council in Brussels on November 15, 2018.

President of South Africa Cyril Ramaphosa gives a press conference after a EU-South Africa Summit meeting at the European Council in Brussels on November 15, 2018.


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john thys/Agence France-Presse/Getty Images

Global economic jitters make this an especially bad time for developing economies to embark on bad policy experiments, yet that’s what South Africa did this month in advancing a sweeping plan to expropriate private land. The only saving grace is that voters will have a chance to weigh in before this scheme becomes law.

A parliamentary committee on Nov. 15 recommended a constitutional amendment that would allow the government to expropriate land without compensation. The idea has been a fixation in South Africa for years, in the belief that bouts of poor economic growth arise because colonial rule left whites with a majority of the country’s farmland.

But anyone seeking the roots of South Africa’s recent malaise should look elsewhere. Agriculture accounts for less than 3% of gross domestic product, and the number of acres owned by nonwhites or the government nearly doubled between 1994 and 2016 under the “willing buyer, willing seller” land policy adopted by Nelson Mandela.

Weak rule of law and bad policies during the nine-year left-wing administration of former President Jacob Zuma are better explanations for the country’s woes. Land expropriation will make matters worse by deterring investors worried about property rights, especially if such a policy is written into the country’s constitution as the current proposal envisions.

President Cyril Ramaphosa entered office this year promising a turnaround from a shrinking economy with 27% unemployment. As a businessman, perhaps he understands the economic stakes in the expropriation fight. But he is bowing to political pressure from the left of the ruling African National Congress party and is supporting the land grab.

No one should believe his bromides that this is a pro-business policy undertaken “so that we can have more stability.” The experience of Zimbabwe says otherwise.

Robert Mugabe allowed millions of acres of commercial farms to be seized in the early 2000s. Skilled farmers fled, and one estimate showed food production fell 60%. Export earnings and foreign-currency reserves disappeared along with foreign direct investment. Banks were drowned in bad debt as land titles became worthless. Hyperinflation began once the country tried to pay off its debt by printing more money. The economy shrank.

The bright spot in South Africa’s expropriation gambit is that there probably won’t be time to finish the legislative process before next year’s national elections. Several parties object to expropriation, setting up a vigorous debate on the question. It’s a discussion South African voters need to have before their lawmakers do serious damage to the country.

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