The ANC will propose an amendment to section 25 of the Constitution this week to further clarify the provision on land expropriation.
According to a report by the Rapport newspaper, the amendment seeks to explicitly state that some instances of expropriation warrant no compensation.
It adds that the motion will likely pass, as EFF deputy leader Floyd Shivambu has reaffirmed that his party would help provide the two-thirds majority needed to make the change in the National Assembly.
However, it is doubtful that the amendment will take effect before the end of 2018, with other opposition parties likely to take the matter to court after it emerged that there may have been procedural errors during the consultation period, it said.
According to a recent report by the Banking Association of South Africa (BASA), continued uncertainty around expropriation without compensation will impact land prices.
“Banks have taken note of the decline in land prices and will monitor the situation closely. As yet, the decline in land prices has not had any impact on the ability and appetite of banks to advance loans to the agricultural sector,” it said.
Basa said that the collateral held by banks, supported by land values, is still deemed to be reasonable, and the lending criteria of commercial banks has not been impacted at all at this stage.
“For now we are confident the loans can be serviced,” it said.
However, it warned that prolonged uncertainty will significantly reduce property values.
“Farmers need to make capital investments into their properties and operations if they wish to remain globally competitive.”