{"id":881036,"date":"2026-10-22T15:49:02","date_gmt":"2026-10-22T13:49:02","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=881036"},"modified":"2026-10-22T16:34:44","modified_gmt":"2026-10-22T14:34:44","slug":"get-rid-of-expropriation-with-compensation-in-south-africa-now","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/881036\/get-rid-of-expropriation-with-compensation-in-south-africa-now\/","title":{"rendered":"Get rid of expropriation without compensation in South Africa now"},"content":{"rendered":"\n

South Africa is desperately trying to attract foreign investment to boost its stagnating economy and make a dent in its high unemployment rate, but laws and government policies are standing in the way.<\/p>\n\n\n\n

Specifically, the ANC-led government’s shoehorning of “nil compensation” into the country’s expropriation laws and refusal to protect trade ties with the United States have created an untenable situation for many investors.<\/p>\n\n\n\n

According to Aluma Capital Chief Economist Frederick Mitchell, South Africa needs substantial funds to finance the expenditure required to stimulate the economy.<\/p>\n\n\n\n

While the latest medium-term budget painted a positive picture of an economy turning things around, the fact remains that growth is anaemic, barely scraping past 1% per annum.<\/p>\n\n\n\n

The International Monetary Fund projects just 1% growth for South Africa in 2026, pushing to 1.3% in 2027. The National Treasury has revised its projections from 1.6% to 1.2% in 2026.<\/p>\n\n\n\n

President Cyril Ramaphosa has long targeted sustained growth above 3% as the key to addressing South Africa’s stalled economy.<\/p>\n\n\n\n

Mitchell said that, to achieve sustained economic growth above 3%, South Africa will have to attract long-term Foreign Direct Investment (FDI). <\/p>\n\n\n\n

However, “capital is inherently mobile; international investors have choices across emerging markets from Southeast Asia to Latin America,” he said.<\/p>\n\n\n\n

To win the global competition for private capital and establish new factories, logistics hubs, and tech enterprises, the South African government must be more decisive in its policy moves and remove as many hurdles as possible, he said.<\/p>\n\n\n\n

Sitting at the top of the pile is a massive point of contention: expropriation without compensation.<\/p>\n\n\n\n

While the national government has been at pains to explain that the Expropriation Act\u2014signed into law by Ramaphosa in January 2025<\/strong><\/a>\u2014would not be used to grab land in the country, the message has fallen flat.<\/p>\n\n\n\n

Under the Act, property can only be expropriated for “nil compensation” in very specific cases<\/strong><\/a> in the public interest.<\/p>\n\n\n\n

However, the definitions in the Act put more than just land at risk<\/strong><\/a>, while experts have noted that “nil compensation” is at odds with section 25 of the Constitution<\/strong><\/a>.<\/p>\n\n\n\n

Some of these issues are currently being challenged in the Constitutional Court, but as a baseline, the entire affair creates uncertainty.<\/p>\n\n\n\n

Remove any doubt<\/h2>\n\n\n\n
\"\"<\/a>
Aluma Capital Chief Economist, Frederick Mitchell<\/figcaption><\/figure>\n\n\n\n

Mitchell said that investors demand legal certainty above all else, seeking absolute policy predictability and property rights when investing.<\/p>\n\n\n\n

The United States, for example, has said, in no uncertain terms<\/strong><\/a>, that the Expropriation Act is holding it back from investing in South Africa.<\/p>\n\n\n\n

To this end, the economist said the South African government must offer “unshakeable, unequivocal protection for private property rights” and explicitly discard ambiguous policies such as Expropriation Without Compensation. <\/p>\n\n\n\n

“Predictability in commercial arbitration, energy contracts, and asset ownership is the foundation of capital formation,” he said.<\/p>\n\n\n\n

However, other policy measures are also needed to boost investment in South Africa, such as protecting trade programmes like AGOA.<\/p>\n\n\n\n

South Africa has long enjoyed the benefits of the United States’ African Growth and Opportunity Act (AGOA), but now faces being removed from it.<\/p>\n\n\n\n

International relations minister Ronald Lamola<\/strong><\/a> and President Ramaphosa have both warned South Africans to prepare for it.<\/strong><\/a> <\/p>\n\n\n\n

The country could be booted as early as next month.<\/strong><\/a> According to Mitchell, the situation is a direct consequence of South Africa’s diplomatic policy.<\/p>\n\n\n\n

“South Africa\u2019s diplomatic posture has direct, measurable economic consequences,” he said.<\/p>\n\n\n\n

“Heightened geopolitical friction with key Western trading partners (like the US) puts over 570,000 export-supported domestic jobs directly on the line.”<\/p>\n\n\n\n

The economist said that preserving preferential duty-free access to the United States under AGOA is not a “diplomatic luxury”.<\/p>\n\n\n\n

“It is a vital pillar of commercial agriculture, advanced automotive manufacturing, and metal fabrication. Preserving AGOA access preserves the high-value jobs that sustain South African households.”<\/p>\n\n\n\n

This article has been updated to correct the headline.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa is desperately trying to attract foreign investment to boost its stagnating economy and make a dent in its high unemployment rate, but government policies are standing in the way.<\/p>\n","protected":false},"author":10,"featured_media":872112,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2113266543249211684","_sma_facebook_post_id":"191437357620492_2245518202935245","_sma_instagram_post_id":"17955512808295975","_sma_x_attempts":1,"footnotes":""},"categories":[4],"tags":[18336,21743,23658,22000],"class_list":["post-881036","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-agoa","tag-aluma-capital","tag-expropriation","tag-frederick-mitchell"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/881036","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=881036"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/881036\/revisions"}],"predecessor-version":[{"id":881073,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/881036\/revisions\/881073"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/872112"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=881036"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=881036"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=881036"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}