Tag: Expropriation Without Compensation (EWC)

The Upgrading or Land Tenure Rights Act (ULTRA) is arguably democratic South Africa’s most important law. Yet virtually no one knows about it. A proposed amendment is currently before Parliament but only one aspect has enjoyed attention: the removal of gender discrimination.

Government intervention in the economy simply does not work. It is a mystery, then, why so many otherwise intelligent people keep calling for more of the same. After years of low growth (12 years now) concurrent with government fiscal deficits and various stimulus packages, we are now faced with retrenchments across the economy. The latest of which is Massmart announcing that it is considering retrenching 1,400 people.

The Rule of Law principle at the heart of South Africa’s constitutional dispensation is there to prohibit arbitrariness from government and demand reasonableness. Government’s plans to bring about expropriation without compensation (EWC), especially as a constitutional amendment, is a good case study of that very arbitrariness our legal system has been set up to combat.

We are an investment manager investing in South Africa. Our capital comes exclusively from American investors. Being based in New York and Johannesburg gives us a useful perspective on how SA is perceived by the international investment community.

Finance minister Tito Mboweni’s new economic strategy paper is a refreshing, much needed breath of fresh air for an economy struggling for oxygen. The paper is replete with common sense proposals all aimed at achieving the economic growth South Africa desperately needs. We have been stumbling along a low-growth path of high taxes, kilometres of red-tape, wealth redistribution, and anti-individualism for far too long. If Mboweni’s paper can be taken as a true step in a new direction, a direction of more individual freedom, South Africa will see green shoots of recovery almost immediately.

The latest GDP numbers show that the South African economy declined by 3.2% for the first quarter of 2019. This comes after President Ramaphosa announced a R50 billion stimulus package in September 2018. Since that stimulus followed on a decade of stimulus spending instituted since the 2008 global economic crisis, we must now ask whether Minister Pravin Gordhan’s decision to choose stimulus over austerity was the right one.

It is an unmitigated moral tragedy that in the year of celebrating what would have been Mandela’s 101st birthday, the incumbent government has betrayed him on an issue about which that he felt strongly. This is the resolution by parliament to make it constitutionally permissible to expropriate land without compensation (EWC). Despite the rhetoric to the contrary, the resolution does not exempt anyone, not any racial group or entity.

Removing the right to compensation when expropriating property that is currently contained in section 25 of the Constitution, will be a lethal blow to the legitimacy and stability of our constitutional order if done under present conditions.

Hot on the heels of President Ramaphosa telling the European Parliament on 14 November  that South African land reforms will be enacted in adherence to the country’s Constitution, the joint constitutional review committee formally recommended that section 25 of the Constitution be amended to allow for expropriation of land without compensation.

It is a well-known fact that the ANC sees itself not primarily as a ruling party, but rather as a movement. This means that it needs to justify its continued existence in terms of the attainment of the objectives given at the organisation’s founding. The need to do this is what informs former President Thabo Mbeki’s critique of the Expropriation Without Compensation policy (EWC) through the 'leak' of his foundation’s memo.