Now that the Constitutional Court has ruled that the local government election must be held between 27th October and 1st November 2021, parliamentary proceedings are to be paused from (10th September) until 2nd November (after the local poll).
This means that the final version of the ‘expropriation without compensation’ or EWC constitutional amendment bill (formally the Draft Constitution Eighteenth Amendment Bill of 2021) – as prepared by the Ad Hoc Committee chaired by Dr Mathole Motshekga – will not be put before the National Assembly for adoption until Parliament reconvenes. The text of this final version remains the same as the second draft gazetted in July for written comment by 13th August 2021.
A ‘careful listening’ to the people?
When the committee adopted this final version last Friday, Motshekga claimed that it had ‘carefully listened to the people of this country’ on what the Bill should contain. However, this is clearly not so.
Close on 149 000 written submissions were sent in by the 13th August deadline, but the MPs serving on on committee had no chance to review these documents for themselves, as the Constitution requires. Instead, they relied on a summary prepared by Parliamentary Legal Services. Neither committee members nor the wider public can assess how accurately this summary captures the points that people made.
However, the committee has previously shown disdain, if not contempt, for the evidence-based written submissions sent in by the IRR, organised agriculture, major business associations, banks concerned about a looming banking crisis, civil society organisations wanting more credible changes to land reform – and hundreds of thousands of ordinary South Africans fearful of the nationalisation of land and other assets that the Bill will authorise.
Instead of heeding these concerns, the committee has focused primarily on the perspectives that were effectively planted in people’s heads by the ANC and the EFF during the oral hearings in the provinces. This process began as early as February 2018, when the Constitutional Review Committee (CRC) was mandated to ‘get the views of ordinary South Africans’ and others about ‘the necessity…of expropriating land without compensation’.
In the recent and graphic words of City Press editor Mondli Makhanya: ‘MPs [then] fanned out across the country, getting the views of the public about the necessity of amending the Constitution. Dominated by the EFF and the populist wing of the ANC, the discourse became a binary question of whether the masses would like to be given land and thus be magically lifted out of poverty, or have the land stay in the hands of its current (white) owners and be condemned to an eternity of hunger.
‘Both parties packed the halls with their supporters and bussed people to the venues. People who had no idea what Section 25 was and how it affected their lives would take to the microphone and declare that “we want our land back”. It was a most cynical exercise that exploited the emotions of the vulnerable and marginalised members of our society.’
A BRITISH LEGAL EXPERT'S OPINION ON EXPROPRIATION OF LAND WITHOUT COMPENSATIO
Even among the people thus primed to speak, few dealt expressly with the need to amend Section 25 or explained why this would help turn land reform from current failure (at least 50% of transferred farms have collapsed) to future success. As Makhanya notes, most talked solely about wanting land and the prosperity they presumed that this would bring. Few showed any awareness of the many other factors vital in practice to profitability: from entrepreneurship and know-how to working capital and markets.
Nor were those primed to speak warned by the ANC and the EFF that the government plans to nationalise the land taken from its current owners by keeping it in the ownership or custodianship of the state. This, of course, will leave many black South Africans with nothing more than tenuous rights of ‘access’ to land, rather than the solid freehold title that most want – and have cynically been induced to believe they will obtain.
A Bill that benefits all South Africans?
In praising the final version of the Bill, Motshekga also claimed that it would be ‘of benefit to all South Africans, regardless of colour’. This is an extraordinary assertion to make when the Bill’s damage to fixed investment, economic growth, tax revenues, public debt, and unemployment is sure to be enormous.
In January 2021 two economists from the GOPA Group Southern Africa, Dr Roelof Botha and Professor Ilse Botha, updated their 2018 model of the likely economic impact of the Bill. In doing so, they once again drew on the experiences of seven other countries, including Venezuela and Zimbabwe, that have adopted EWC-like policies in recent years.
In these nations, the ratio of fixed investment to GDP showed an average decline of 14% after EWC-type policies took effect. Based on these examples, South Africa is likely to see its fixed-investment-to-GDP ratio diminish by at least 5% (in scenario 1) or by 10% (in scenario 2) in little more than two years.
Using official Treasury and other data, the two Bothas estimated that, within this period alone:
in both scenarios, increased public debt would trigger further ratings downgrades, exacerbating an already high interest burden; while
the number of jobless people would rise by about 1.4 million under scenario 1, and even higher under scenario 2, which could trigger unrest and reduce confidence still further.
The IRR (and many others too) have repeatedly warned the committee of these dire outcomes. Time and again they have also pointed out that amending Section 25 cannot improve land reform when the real barriers to success lie in gross bureaucratic inefficiency, mounting corruption, limited working capital, poor post-settlement support – and the ANC’s ideological aversion to individual property ownership.
Exceeding the committee’s mandate
The Bill is also marred by yet another procedural flaw that Motshekga declines to acknowledge. The changes it proposes go far beyond the committee’s mandate, which is to authorise EWC for land alone and to ‘make explicit’ what is already ‘implicit’ in Section 25.
The final version of the Bill, by contrast, allows EWC for both land and ‘any improvements thereon’. It also obliges the state to take custodianship of ‘certain’ land, while failing to define this.
Yet Section 25 has never envisaged or authorised the state’s taking of custodianship. This puts the Bill way beyond the committee’s mandate. It also means that the committee cannot lawfully adopt the measure until Parliament has substantially expanded its mandate.
However, the legislature lacks the authority to extend the committee’s mandate in this way. Were it to attempt to do so, this would be inconsistent with the November 2018 recommendations of the CRC: that Section 25 should be amended to make explicit that which is implicit within it. These CRC recommendations were endorsed by Parliament in December 2018 and provide the legal foundation for the committee’s work.
Where to from here?
The flawed process of enacting the Bill will presumably limp on in November, when the National Assembly seeks to adopt it. The Assembly will need at least a two-thirds majority, which the ANC alone (with 57.5% of the seats) cannot supply. EFF support is thus essential – but the EFF wants state custodianship over ‘all’ land, not merely ‘certain’ land, as the Bill states. However, this apparent divide could wither away if ‘certain’ land is interpreted as meaning all privately-held land, which could easily be agreed.
The DA seems confident the Bill will die because the ANC and EFF will prove unable to bridge their differences on the custodianship clause, in particular. However, this is far from certain.
There is reason to hope that a two-thirds majority will not be secured and the Bill will be scrapped. But it is also important to keep preparing for the worst – and to recognise how close to the EFF the ANC already stands, and how little might be needed to close the remaining gap.
