Too early to panic on land

The ANC’s plan to make it easier to take land without compensation could have an impact on financial-sector stability but it’s “too early to panic,” said Kuben Naidoo, the head of the Prudential Authority, which regulates banks.

The ANC supports changing the Constitution to make it easier to expropriate land, adding to emerging-market jitters that have knocked the country’s assets.

SA banks have lent farmers about R150 billion and have in excess of R1.3 trillion outstanding on property generally, Banking Association head Cas Coovadia said.

“There’s also concern about what’s next – is agricultural land at risk or is residential land also at risk?” asked Naidoo, who is also a deputy governor of the South African Reserve Bank.

“If residential land comes under question, and if property rights more generally come under question, that could have an extremely large systemic effect on the banking sector. The proposals are far too vague and uncertain for us to panic in any way.”

With general elections looming, President Cyril Ramaphosa has embraced expropriation without pay, but insists there won’t be a land grab.

A parliamentary panel will seek an extension to a September 28 deadline to present its findings on possible constitutional amendments, boosting the odds that the legislature won’t decide on the matter before next year’s elections.

Ramaphosa on Friday named Vuyokazi Mahlati as chairwoman of a 10-member panel that will advise the government on the implementation of the land-reform process.

The panel will advise the inter-ministerial committee chaired by Deputy President David Mabuza on various issues, including restitution, redistribution, tenure security and agricultural support, the presidency said in an emailed statement.