President Jacob Zuma on Thursday spelled out what government meant by radical economic transformation. “Let us not keep asking what do we mean by this, if you want to debate let us debate meaningfully. We have been presenting this in different platforms partly because its absolutely important that the economy of the country must be shared amongst all citizens of this country where there is extreme poverty and extreme richness.”
By Ed Stoddard, JOHANNESBURG – REUTERS
President Jacob Zuma’s pledge to expropriate South African land is unlikely to lead to violent seizures of farms like those that impoverished neighbouring Zimbabwe, but could still hurt the economy by scaring off investors worried about property rights.
Zuma is fighting to retain control of South Africa against opponents within the ruling African National Congress who want him to resign the party leadership.
The confrontation came to a head last week when Zuma sacked Finance Minister Pravin Gordhan, who was often at odds with the president but widely respected by financial markets and whose dismissal triggered a credit downgrade.
Faced with opposition mainly from urban constituencies within the ANC, the president has doubled down on appeals to the rural poor, renewing promises to change the constitution to expropriate land without compensation and redistribute it.
“You can’t have a constitution that keeps people in poverty,” he told traditional leaders last week.
Zuma has reminded the party that “expropriation without compensation” was adopted as official policy at the ANC’s 2012 conference.
More than two decades after the end of apartheid rule, most of South Africa’s land is still in the hands of minority whites. Zuma’s ruling ANC has long been committed to the principle of redistributing it.
But the pace has been slow, relying mostly on a “willing buyer, willing seller” policy intended to respect property rights seen as vital to sustaining Africa’s most industrialised economy.
South Africa has many safeguards that should prevent the sort of lawlessness and violence that took place when followers of Zimbabwean President Robert Mugabe stormed onto white-owned farms in the early 2000s.
Zuma himself has said South Africa will not embark on the kind of lawless land grabs that saw Zimbabwe slide from breadbasket to basket case. Unlike Zimbabwe, South Africa has a robust, independent judiciary to keep the government in line.
Nor is South Africa as dependent on farming for its income as its northern neighbour: agriculture accounts only for about two percent of gross domestic product.
But the threat to redistribute land could still harm a sector which is a major employer and feeds a drought-prone nation, and any move to curb property rights could have wider economic repercussions by alarming investors in other sectors.
RHETORIC TO REALITY?
Changing the constitution as Zuma says he intends would not be easy, with the ANC so sharply divided over his leadership.
“The checks and balances in South Africa and the waning political support for the ANC itself make it difficult to disregard or change the constitution,” said Daniel Silke, the director of Political Futures Consultancy. “We are in a very different space to what was a very autocratic Zimbabwe.”
Zuma’s political woes, including electoral setbacks in major urban centres in local elections last year, explain his populist approach to the land issue.
It is part of a “radical economic transformation” drive aimed at the ANC’s increasingly rural support base. His plans will be high on the agenda of a major party policy conference in June-July, and another in December when Zuma’s successor as ANC leader is to be picked ahead of a general election in 2019.
“Deploying populist rhetoric is a powerful campaign strategy that has worked for Zuma before,” said Ruth Bookbinder, Africa Analyst at risk consultancy Verisk Maplecroft.
The Department of Rural Development and Land Reform says only 8 million hectares of arable land has been transferred to black people since 1994, less than 10 percent of the 82 million hectares available and a third of the ANC’s 30 percent target.
Yet the ANC has not yet fallen into line behind Zuma’s call for constitutional change. In February, ANC MPs voted down a motion by the ultra-left Economic Freedom Fighters (EFF) party to amend the constitution to take land without compensation.
Zuma’s bid for rural support has parallels with Zimbabwe in 2000, when Mugabe, then in power for two decades, faced a challenge from an opposition rooted in the urban trade union movement.
Mugabe responded by unleashing violent invasions of white-owned farms that proved devastating to an economy already in meltdown, with acute balance of payments pressures, raging inflation, slowing growth, a depreciating currency and a dependency for funding on the International Monetary Fund.
Zuma too faces challenges from urban quarters, including calls for him to resign from the South African Communist Party and labour federation Cosatu, both allies of the ANC.
The economy is barely growing, the rand currency is vulnerable, inflation could reignite, and further ratings downgrades could push South Africa into the IMF’s embrace, which would see it forced to adopt austerity measures that ANC populists would baulk at.
Damaging South Africa’s high-tech agriculture sector through land seizures could have far-reaching consequences. Wandile Sihlobo, an economist at the agricultural business chamber, told Reuters he reckons the debt book for commercial agriculture is around 160 billion rand ($11.6 billion).
Food security is a concern as South Africa recovers from a drought, with forecasts showing another potentially looming.
Some analysts say such consequences will not dissuade Zuma.
“Zuma has shown he can be absolutely reckless in pursuit of his political agenda,” said NKC African Economics political analyst Gary van Staden.