Who will be hit hardest by land redistribution without compensation: economist

Economic Freedom Fighters (EFF) leader Julius Malema again made headlines over the past weekend with controversial comments on land ownership in South Africa.

Speaking at a supporter rally in Johannesburg, Malema said that the land in South Africa was taken by whites through genocide, and would be returned to the people.

In his address, the party leader was careful to word things in a way that did not overtly incite racial tensions, saying that the land should be taken from white people, and given to all (white people included), while maintaining that there should be no disruption to agricultural food supply, and no civil war.

“We are not going to disrupt farming. We are going to inherit farming and continue to farm. We want agricultural colleges open. Because the land is coming and it is going to need educated farmers,” he said.

Land reform has again flared up fears in South Africa, after parliament passed a motion to review section 25 of the Constitution, which could start the process of changing the country’s land laws. Both the EFF and the ruling ANC voted in favour of the motion, indicating majority support for the change.

‘Land expropriation without compensation’ is a policy of the state taking land, without giving the current owners any sort of payment for it.

The ANC’s eagerness to adopt the policy, and vote with the radical and populist EFF on the matter, has unsettled investors and economists, helping the rand to reverse some of its early gains in 2018, following the exit of former president Jacob Zuma.

Black South Africans have more to lose

Responding directly to Malema’s speech over the weekend, economist Mike Schussler said that the politician was doing black South Africans a disservice with his rhetoric, pointing to data that indicated that it would be that specific group who are hit hardest by such a policy.

“I have a surprise for Mr Malema: Africans own 7.66 million houses (1st houses only) and whites own 730,000. The other two population groups combined own as many as dwellings as whites. If the state expropriates this land without compensation, then the state will take 10 times more homes from Africans than whites,” he said.

According to Schussler, in total 56% of the value of 1st houses in South Africa belong to black Africans. Only 33% belong to the white population group.

“So nearly double the value will be taken with expropriation without compensation from Africans. Moreover, 22% of black Africans own second homes – far less than 10% of white folk who do.”

“Add RDP and Traditional homes, and one could add R2 trillion to the balance sheets,” Schussler said.

“The sad thing here is that Africans have been very successful in many, many cases of buying houses or getting houses – and Malema actually keeps the notion alive that black South Africans are not successful.”

“Malema has made a big mistake if he thinks black African want to give their homes to the state. He will feel that the ballot box,” he said.

Land data

Schussler cites the General Household Survey of 2016 for his data, and says it changes every year. He previously explained in detail how the data reflects a true account of land and household ownership, countering claims of majority land ownership by a minority racial group.

Details from a November 2017 land audit report were recently published by the City Press, telling a very different story.

According to the report, individual black South Africans only directly own 1.2% of the country’s rural land and 7% of formally registered property in towns and cities, compared to white South Africans who individually own 23.6% of the country’s rural land and 11.4% of land in towns and cities, directly.

White South Africans, meanwhile, who made up 9% of the population, directly own 23.6% of the country’s rural land and 11.4% of land in towns and cities.

A third (33%) of the land in South Africa is owned directly by private individuals, while companies, trusts, the state, traditional authorities, churches and community organisations own the rest, the paper said. The latter group was not broken down by race.

A separate report, published by AgriSA in November 2017, focused solely on agricultural land, and showed that landowners who are not white own 26.7% of agricultural ground and control more than 46% of South Africa’s agricultural potential.

As part of the government’s new directive to review the country’s land laws, a full land audit is expected to be released.

While the EFF want a radical land policy change to make way for the nationalisation of land (government-owned land that would then be leased out), the ANC has taken a more cautious approach, saying that though the land laws need to be reviewed, the economy and food security cannot be impacted.

Read: The truth about black vs white land and home ownership in SA