Johann Rupert enters the land debate
Security of ownership must not be buried in land debate — Rupert
● Discussions on SA’s contentious land reform plans have missed the point, according to one of the world’s wealthiest businessmen, Johann Rupert, who this week weighed in on the matter that has divided the country and sparked panic among investors abroad and at home.
Although the government and the ANC have yet to define their strategy for land expropriation and how they intend to roll this out, Rupert told Business Times that there were misconceptions and that conversations about the matter had mostly confused “land” with “property”.
“Without an inalienable right to private property, no person can build capital,” Rupert said. His argument is premised on the market principle that globally and throughout history institutions have insisted on security before lending out their depositors’ funds.
“SA is no different, except in SA, blacks were denied this basic human right,” he said.
Rupert is chairman of Swiss-based luxury goods company Richemont and of SA-based investment firm Remgro, which has stakes in Mediclinic International, Unilever, Distell, eMedia Investments and petroleum firm Total, among others.
Forbes last year put his personal wealth at $6.3bn (about R85bn).
The Rupert family’s proximity to the National Party, which entrenched and broadened racial segregation in the late 1940s — including significant restrictions on property rights for black people — is documented in a book published last year by activist Hennie van Vuuren. Rupert made at least one donation to the party in 1989 when the party requested R20,000.
Last year the ANC publicly raked Rupert over the coals for his reported statement that radical economic transformation — then an ambiguous policy championed by the president of the day, Jacob Zuma — “was just a code word for theft”.
But this week Rupert took a more conciliatory tone, pointing out that he had established Business Partners in 1980 as a means to uplift black entrepreneurs.
The creation of the company was spurred by apartheid legislation that prevented black people from owning fixed property in socalled white areas, and the fact that communal land in rural “homelands” was controlled by traditional leaders — which is often still the case.
Business Partners bought property in white areas and leased this to black entrepreneurs on long-term leases. This enabled them to obtain funding from Business Partners, and then from banks. About 700,000 new jobs were created from this, said Rupert.
But ultimately it is outright ownership of property that is one of the foundations of wealth creation and enables security of tenure. Rupert said to date he had funded more than 10,000 black and coloured households to help them obtain title deeds.
Tensions were raised this week after President Cyril Ramaphosa announced after the ANC’s lekgotla in Pretoria on Tuesday that the government would proceed to amend the constitution to allow land expropriation without compensation.
The rand weakened after the announcement, breaking an appreciation that had brought it to its strongest levels in seven weeks.
The rand ended the week 0.83% weaker to R13.28/dollar.
ANC secretary-general Ace Magashule said the lekgotla decision reflected comments expressed during the public hearings on land by parliament’s constitutional review committee. Parliament is currently seized with a review of the expropriation bill. The ANC wants to amend constitution clauses focused on expropriation.
Prof Ben Cousins, department of science & technology and National Research Foundation chair in poverty, land and agrarian studies at the University of the Western Cape, said insecurity about property rights would harm job creation.
“The ANC is trying to catch up ground. It’s now clear that as a society as a whole we have to grasp this issue, even if the economic impact, for example in terms of job creation, is quite limited. On the job-creation side, if the private sector feels that their private property rights are insecure, it’s going to slow local investment and it will scare off foreign investors.”
Cousins said core issues had to be dealt with: “We’ve got to change the racial ownership of land, but as a long-term project. That means having a proper redistribution programme . . . the ANC has said they are going to do this, but we need to know the details.”
He added: “We’ve got a massive problem with the restitution programme, which is now massively dysfunctional. We’ve got to fix those problems and resolve the restitution claims, possibly through lots of cash payouts. We’ve got to resolve the issue of the insecure land rights of people in informal settlements, in backyard shacks, in cities, communal areas and on farms. We need that tenure-reform component.
“A new Land Records Act, which records, registers and secures people’s land rights whether these are private title deeds or whether they are given tenure rights — a proper way of securing those rights against arbitrary eviction — is a third key element of a proper land reform programme.”