The one reason not to panic about South Africa’s new land expropriation laws

 ·24 Jan 2025

Professor Johann Kirsten, director of the Bureau for Economic Research (BER) and Professor in agricultural economics, says South Africans shouldn’t be alarmed by the country’s new Expropriation Act because it doesn’t change the Constitution.

Instead, they lay out and clearly define how expropriation can take place and under which circumstances. While ‘nil compensation’ is part of the picture, things will still fall back on the protections in Section 25 of the Constitution.

President Cyril Ramaphosa signed the contentious Expropriation Bill into law on Thursday (23 January), concluding a two-decade-long process on land reform.

The new law repeals the apartheid-era Expropriation Act of 1975 and sets out the specific conditions and processes for expropriating land.

According to Professor Kirsten, the process to replace the Expropriation Act of 1975 was initiated in 2004, and both houses of parliament passed the new Bill in March 2024, making it 20 years coming.

The professor said that the new expropriation act clearly defines under which circumstances the state and organs of the state can expropriate land in the public interest, and the process of compensation and engagement with owners of land or property to be expropriated is also outlined clearly.

Most notably, however, Kirsten said the state always had the power to expropriate land for roads, rail, dams, etc, so this is not a new concept. 

“Therefore, the new Act only aims to bring order and strict guidelines for the expropriation process,” he said.

Bureau for Economic Research Director, Professor Johann Kirsten | Source: BER

He stressed that the new Act should not be confused with the “Expropriation without Compensation” principle that was actively debated in 2017/18.

This was a debate that happened in South Africa’s legislature, which could have resulted in Section 25 of the Constitution being changed.

Section 25 states:

1. No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.

2. Property may be expropriated only in terms of law of general application ­

a. for a public purpose or in the public interest; and
b. subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.

3. The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including ­

a. the current use of the property;
b. the history of the acquisition and use of the property;
c. the market value of the property;
d. the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and
e. the purpose of the expropriation.

The governing ANC administration under Jacob Zuma strongly pushed the process to change Section 25 at the time.

However, the ANC itself was divided on the issue and never managed to secure footing to make the change. The Expropriation Bill was seen by the party as a suitable alternative—but ultimately does not repeal or alter what is in the Constitution.

Kirsten said that because of this, the new Expropriation Act’s provisions are still subject to the provisions of Section 25 of the Constitution, which has not been amended, and require that compensation must be “just and equitable, striking an equitable balance between the public interest and the rights of those affected, having regard to all relevant circumstances”.

“This means that even though nil compensation can be awarded after all circumstances are considered, the end result must still be just and equitable,” he said.

“While the definition of expropriation will still need to be applied and interpreted by the courts, there is no reason to be alarmed by the Act being signed into law by the President.”

This view is also supported by the wider market reaction to the news. While the rand was jittery after the laws were signed, markets did not respond sharply as seen in 2017/18.

This does not mean that all is well, however. The new laws add a fresh degree of uncertainty to something that has been seen as sacrosanct and will not go unchallenged.

Specifically, any expropriation under the new laws that results in zero compensation will likely be challenged in court. This will truly test the laws’ alignment with Section 25 of the Constitution.

The laws will also likely face legal challenges from long-time opponents.

The Democratic Alliance, which has long opposed the changes and now forms part of the government, said it would consult with its legal teams on a way forward.

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