REAL PROPERTY?
Instead of focusing on land ownership the government should emphasise education to ensure upward social mobility of black South Africans, writes
Congress (ANC), Ramaphosa is pressed for time to win back poor black voters.
Land redistribution would theoretically, and to a degree, bridge the vast wealth gap between black and white South Africans. The ANC therefore terms it a moral imperative.
How did it get to this point? First, South Africa’s colonial masters barred blacks from owning any land outside their “homelands”, or tribal reserves.
Later, after independence from Great Britain, the white minority government used apartheid as a tool of oppression to ensure that blacks owned no more than 13 per cent of South African land at any given time.
Consequently, South Africa’s post-apartheid constitution that arrived in 1994 instructed future governments via Section 5 (aka the “property clause”) to pursue equitable land redistribution and “expropriate” if necessary in the “public interest”, but only upon fair compensation as decided by negotiations or the courts.
It goes without saying that in the long-term, a minority group owning too much capital is a recipe for revolution — think Jews in Nazi Germany — and especially given South Africa’s painful memories of institutionalised racism.
But the country today stands on the precipice of a recession. Its economy continues to wobble between contraction and anaemic growth, while a meltdown in the global commodities markets has slashed exports.
Moreover, droughts and water shortages have lowered yields and raised the spectre of food insecurity. And unemployment, especially among the youth, is almost half the potential labour pool. These are dark days.
The classic means for countries to bounce back from such dire straits is to court more foreign investments that re-energise local industries. And South Africa has a solid track record in this regard, particularly in the automotive and manufacturing sectors.
However, the populist bent of the present government is sure to raise red flags for foreign investors who seek socioeconomic stability above all else.
Likewise, given the tendency of cash-strapped states to nationalise industries and capital in the “national interest”, and expressly with the Marxist Economic Freedom Fighters (EFF) party rapidly gaining electoral ground, an expropriation drive that extends to foreign-owned assets becomes all too real a risk despite government assurances to the contrary.
Next, Ramaphosa’s recent statements that suggest greater black ownership of agricultural land will somehow magically kickstart South Africa’s economic engine puzzle me.
It is farcical to assume that city dwellers can immediately jump into commercial farming and sustain productivity, more so when studies indicate state support for already transferred land has been poor.
Therefore, we can surmise that without a solid roadmap following “expropriation” that incorporates training, market access, seeds and subsidies etc., the government is simply setting up the new farmers to fail. How will this raise their standard of living?
If anything, it will reinforce their belief that rich black South Africans like Ramaphosa, a former tycoon, are indulging in tokenism to appease their own consciences instead of engaging in meaningful policymaking to pull the poor out of poverty, which presently stands at one in three among South African blacks.
What I find even more baffling is the government defending the programme by pointing out that first in line for redistribution will be unused state and otherwise unoccupied land.
In a country with low arable land, the fact that certain tracts remain unused suggests they have little to no cropping potential.
Moreover, with cronyism the norm during ousted former president Jacob Zuma’s nine years in power, the fact that unused state land was not gifted to his yes-men again suggests their productive potential is meagre.
How, then, will such a policy raise the earning potential of poor blacks?
Moreover, the ANC’s core defence of the constitutional amendment goes against global economic trends. A cursory online search of booming industries worldwide reveals a tech-centric tilt with cyber security, virtual reality, green energy and biotechnology leading the pack.
Why, then, does the ANC believe impoverished blacks tilling their own soil will trigger sustainable growth in the national gross domestic product? Sounds like 18th century economics.
A far better approach is to focus on education. There are two reasons for this.
First, higher education is the surest guarantee of upward social mobility in low-to-middle income nations.
Second, knowledge is not only power, it also builds confidence. Currently, less than 20 per cent of black South Africans complete high school compared with 65 per cent of their white peers.
No prize, then, for guessing which race has the higher university graduation rate. Consequently, blacks are routinely outqualified for white-collar jobs that are the gateway to wealth creation.
To summarise, Ramaphosa’s government has its heart in the right place, but the proposed strategy is blinkered by the ANC’s eagerness to stay in power after next year’s polls.
The major worry for investors and the international community, however, is this eagerness may turn land reforms into a land grab. All bets are off if the recession hits harder than forecast.