Expropriation without compensation Archives

BUSA calls for urgent engagement on land expropriation

Business Unity South Africa (BUSA) has noted the intention by the African National Congress (ANC) 54th National Conference to initiate some amendments to the Constitution of South Africa in order to achieve expropriation without compensation, while at the same time indicating that expropriation would also have to pass a sustainability test so as not to threaten food security, agricultural production and other sectors of the economy. Article 25 of the Constitution of the Republic of South Africa, provides for the expropriation of land that is compensated in a “just and equitable” manner. Article 25 further recognises the need to redress the historical injustices in the process of addressing land restitution.

BUSA expressed serious concern that the ANC’s decisions on land would result in policy uncertainty with negative socio-economic impact particularly undesirable in the current economic climate. BUSA said that the intention to initiate amendments to the Constitution of South Africa, when the existing provisions in Article 25 had not been implemented, was unwarranted. BUSA indicated that it will be seeking an urgent meeting with the ANC leadership to obtain clarity on this matter, as well as on other matters of key interest arising out of the conference.

“The issue of land reform is complex. The pace and depth of transformation has been patently insufficient – this needs to be comprehensively addressed. At the same time we need to build confidence so as to stimulate investment and production in the agricultural sector as a critical part of a diverse, inclusive and globally competitive economy,” stated BUSA CEO, Tanya Cohen.

BUSA views land restitution as an important instrument for fostering economic growth and black economic transformation. The acceleration of land redistribution needs to balance the urgency of social redress with sustainable land usage and food security.

Moody’s reprieve an opportunity to institute urgent reforms, says BUSA

Political stability required
Policy certainty must be prioritised
Credible plan for SOEs needed
Structural reform critical
Pro-growth roadmap crucial

Business Unity South Africa (BUSA) calls on SA Inc to effect the urgent and necessary economic reforms following Moody’s Investors Service decision to defer an announcement on the outcome of its review of the country’s sovereign credit ratings.

This is a welcome reprieve and ensures that South Africa will remain in the Citigroup World Bond Index, a key instrument which will enable the Government to continue raising much needed liquidity in the capital markets. SA Inc ought to take this as an opportunity to get its fiscal house in order and its policies aligned to a pro-growth and confidence-inspiring economic strategy, according to BUSA.

The five focus areas that BUSA views as critical in efforts to ensure South Africa retains its investment grade sovereign credit rating are: political stability, policy certainty, the reform of state-owned entities (SOEs), structural reform and a credible growth roadmap.

Political stability

In previous ratings reviews, Moody’s – as well as Fitch Ratings and S&P Global Ratings – had expressed concerns about political noise, noting increased pressure to pursue populist policies and on the country’s oversight institutions. With the General Election scheduled for May 2019, South Africa requires a political trajectory that inspires confidence in its ability to effect an economic turnaround. A free and fair elections process will also bolster confidence in the strength of the country’s institutions.

Thus far, the build-up to the General Election has been peaceful and all registered political parties have agreed to adhere to and subject themselves to the Electoral Code of Conduct.

In light of the ongoing Zondo Commission of Inquiry – and the testimony brought before it about political patronage and its role in state capture – and the recent signing into law of the Political Party Funding Bill, BUSA calls on political parties to be transparent about their sources of funding.

Policy certainty

Land expropriation without compensation and the visa regime are two of the most significant policy issues that need to be comprehensively addressed. The Government needs to work with social partners in determining timelines, modalities and an implementation framework.

SOE reform

Eskom remains the greatest risk to the economy and a comprehensive and an aligned position is required between the power utility and its stakeholders on how to effect a restructuring within the context of a broader overhaul of the energy sector.

In its monetary policy committee statement this week, the Reserve Bank revised down its growth forecasts for 2019 and 2020, citing weak business confidence and the potential resumption of load shedding. This highlights the gravity of the situation and the need for urgent intervention.

Structural reform

South Africa’s skills and education framework remains out of alignment and continues to undermine the country’s growth potential. It has also been referenced by various institutions as a key impediment in realising the country’s growth potential as a developing economy.

Growth roadmap

President Cyril Ramaphosa released the Economic Stimulus and Recovery Plan in September last year. BUSA calls on the Government to move with speed on the establishment of an Infrastructure Fund and to work with all social partners, business in particular, in the formulation and implementation of the steps necessary both to inspire confidence and urgently reposition the country’s growth trajectory.

BUSA Comment on Constitutional Review Committee Adopting Report on Land Expropriation without Compensation

Thursday 15 November 2018

Business Unity South Africa (BUSA) calls for a clear plan and timelines about the framework the government will pursue in order to realise land expropriation without compensation, with clarification as to the role the recently appointed land advisory panel will play therein.

This is in the context of the Joint Constitutional Review Committee today (Thursday 15 November 2018) voting to adopt its report paving the way for a change to Section 25 of the Constitution to formalise land expropriation without compensation as official policy.

BUSA notes that there have been questions raised about whether due process was followed by the Joint Committee in arriving at its decision today. BUSA calls for clarity in this regard and that these questions be addressed promptly to avoid creating unnecessary uncertainty.

BUSA endorses the imperative to undo South Africa’s skewed and unjust land ownership and distribution patterns, which continue to run along racial lines. Business is of the view that the country’s land question ought to be addressed conclusively in a fair, just, equitable and transparent manner. BUSA stands ready to play a constructive role in this regard.

However, BUSA notes that the issue is not confined to Section 25 of the Constitution – it is about how the entire edifice of the land reform programme has been a resounding disappointment to those intended to benefit from it. It would be prudent to take a holistic approach that factors the failures of the country’s past land reform programme and one that moves SA Inc forward on the land question.

BUSA agrees that property rights and land ownership are fundamental requirements that will help to ensure South Africa addresses its societal structural imbalances.

“It would be unfortunate for this important national issue to be reduced to ideological wrangling, as it affects the entire body politic. South Africa must confront its past, which continues to stalk it through the land question. We call for cool heads and pragmatism, and an approach that does not undermine SA Inc’s economic fundamentals.

“We have just emerged from a trying period of political uncertainty that manifested in economic stagnation. As we confront the land question, BUSA calls for a unifying approach that will inspire confidence and solve the land question constructively,” said BUSA President Sipho M Pityana.

BUSA statement on ANC president Cyril Ramaphosa’s announcement on expropriation without compensation

Business Unity South Africa (BUSA) made a written submission on 15 June 2018 to the multiparty Constitutional Review Committee, chaired by MP Vincent Smith, which is tasked with reviewing Section 25 of the Constitution to pave the way for land expropriation without compensation.

As the apex business organisation in the country, BUSA has made itself available to participate in parliamentary hearings conducted by the committee to articulate the views of organised business on the issue.

Business is unclear how the announcement made by Cyril Ramaphosa last night (Tuesday July 31) in his capacity as ANC president will affect the process undertaken by the committee. This potentially introduces another element of policy uncertainty, as there are no modalities currently on the table about a framework of how land expropriation without compensation will be implemented.

BUSA’s written submission leant on the findings and the recommendation of the High-Level Panel on Assessment of Key Legislation and Acceleration of Fundamental Change headed by former president Kgalema Motlanthe.

The panel’s core findings and observations were that the requirement to pay compensation is not the biggest stumbling block to land reform. It also noted there is inadequate differentiation of approaches between pro-poor policies and the development of emerging commercial farmers, and that there is poor implementation of existing policies. It highlighted legislative gaps, underscored corruption and flagged reluctance to transfer ownership.

In 2017, BUSA adopted the ‘Business Approach to Black Economic Transformation for Inclusive Growth’, which recognises that the pace and depth of transformation within business have been inadequate. BUSA identified four elements to drive transformation within business: embed a diversity culture; education and skills development; employment, particularly of youth; and rapid enterprise development of black-owned businesses.

Business acknowledges the urgent need to address the persistent effects of apartheid-era land dispossession and recognises the inextricable link between land and the restoration dignity. Land reform, and by extension, the furthering and entrenching of property rights to all segments of South African society, has been unacceptably slow and needs to be comprehensively and urgently addressed.

Any clarification of constitutional measures needs to go hand in glove with addressing endemic structural and administrative challenges in implementing land reform. Business stands ready to work proactively with all stakeholders to achieve these objectives.