If only Ramaphosa would get real about dire situation

Last week President Cyril Ramaphosa shocked the nation by announcing two significant policy decisions taken at the ANC’s recent lekgotla.

The governing party will seek to amend the constitution to allow for land expropriation without compensation, and will introduce a financial stimulus package to create growth and jobs.

Politics aside, this is what Ramaphosa should have said instead: “Land reform has to be accelerated to correct the injustices of the past and ensure more equitable land ownership. The ANC’s previous land reform efforts have failed because they’ve been too politicised, too slow and badly run by inept departments. They have also been bedevilled by corruption and elite capture. We acknowledge that the ANC has performed dismally on land reform and because of that people are angry. Politicians are exploiting this anger, even inside the ANC.

“But don’t be fooled, amending the constitution to allow land expropriation without compensation will not solve poverty. It will not unlock economic growth by bringing more land into full use or enable the participation of millions more people in the economy as long as farmers [including the new, black beneficiaries] believe their land rights are insecure. We also acknowledge that the banking system is exposed to commercial agriculture by as much as R158bn and the Land Bank by R46.5bn. Because of this, expropriating farm land without compensation runs the risk of creating a systemic banking crisis. So, as the ANC leadership we’ve decided not to amend the constitution.

“We will never expropriate land other than for ‘just and equitable compensation’. Doing so would not only undermine food security but also private ownership and property rights — the bedrock of our economic system. Instead, we will ensure that millions more people can leverage the benefits of secure property rights by conferring title deeds to all existing and future landreform beneficiaries.

“In addition, the government has identified nearly 200,000 state properties in prime locations worth more than R40bn. These will be sold where practicable and the proceeds used to provide cash compensation in lieu of land to willing land claimants.

“Underutilised state land in urban areas will be unlocked to provide housing to correct the inherited apartheid spatial geography that forces our people to reside far from work opportunities. It is essential that SA addresses land hunger, and we will, but creating job opportunities is as important. It would be self-defeating to undertake land reform in a way that would damage investor confidence and derail our fragile economy.

“We are shocked that unemployment worsened again in the second quarter and another 90,000 jobs were shed. As tempting as it would be to announce a new fiscal stimulus package to support growth, our fiscal options are severely constrained after years of overspending amid a prolonged growth slowdown. There is no new money to stimulate the economy this year. The R30bn overrun in the public wage settlement, combined with disappointing GDP growth, make it likely that yet again we will not be meeting our deficit and debt-reduction targets. The government will have to improve its spending efficiency.

“There are things we can do that will not cost us more money, however, such as leveraging procurement to support localisation; cutting the red tape that strangles entrepreneurs; clearing away the regulatory and licensing hurdles in telecoms and mining, and easing visa requirements to make it easier for tourists and skilled people to come to us.

“We will do all these things in the next 30 days. You have my word.”