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South Africa is on its way to becoming Zimbabwe.

March 5, 2018


South Africa's new government has announced that it will now begin to reclaim land taken from black people near a century ago without payback to the current owners, dividing public sentiment along fears of a “land grab” and cries for justice.

South Africa’s parliament has voted in favor of a motion that will begin the process of amending the country’s Constitution to allow for the confiscation of white-owned land without compensation.
 

The motion was brought by Julius Malema, leader of the radical Marxist opposition party the Economic Freedom Fighters, and passed overwhelmingly by 241 votes to 83 against.

It was amended but supported by the ruling African National Congress and new president Cyril Ramaphosa, who made land expropriation a key pillar of his policy platform after taking over from ousted PM Jacob Zuma earlier this month.

 

“The time for reconciliation is over. Now is the time for justice,” Mr Malema was quoted by News24 as telling parliament. “We must ensure that we restore the dignity of our people without compensating the criminals who stole our land.”

A 2017 government audit found white South Africans owned 72% of farmland in South Africa, while constituting almost 10% of the overall population.


 

South African president Cyril Ramaphosa.


To be fair, the white Afrikaner minority in South Africa did steal and appropriate those lands, which belonged to black African tribes such as the Zulu, from their original inhabitants through murder conquest and outright theft.

The history of land expropriation under apartheid has left a painful wound in South African society, which indeed ought to be corrected. However, the way the South African government decided to "correct" this issue, as in the Zimbabwean model, has been tried and failed in the past.

With the benefit of hindsight, the Zimbabwean experience tells us is that the notion of expropriation without compensation is a bad idea to say the least, if not outright economic suicide.

Zimbabweans might have seized the land without compensation 18 years ago, but they collectively paid for it through eight consecutive years of economic decline that led to job losses, super hyperinflation, deindustrialization, a loss of agricultural export revenues and basically a complete collapse of the economy.

After unemployment rates of over 90% and tepid growth in recent years, the Zimbabwean government is going back to correct the fundamental mistake it made nearly two decades ago – which is to compensate farmers, whose estimated compensation costs are set to amount to $11 billion.


Ironically, South Africa’s decision comes at a time when the Zimbabwean government has realised what a colossal mistake land appropriation was, and had established a compensation committee under its land acquisition act to allow for dispossessed white, former commercial farmers to be compensated for land seized 18 years ago.

But instead of learning from the mistakes of their northern neighbors, South Africans are now seem determined to repeat them, on a much larger scale.

 

White farmers being arrested and evicted from their lands in Zimbabwe 2001.



Despite its relatively small share of the total GDP, primary agriculture is an important sector in the South African economy. Agriculture remains a significant provider of employment, especially in the rural areas, and a major earner of foreign exchange.

Even though South Africa's agriculture sector plays a much smaller role in its economy compared to Zimbabwe's, the collapse of that industry will wreck havoc in the country in terms of jobs, food production and shrinking of the GDP.

The moral of the story is if the government declines to directly compensate its commercial sector for land improvements, at the very least, then someone else will have to pay for it, or compensate for it, indirectly.

The compensation effect will see the entire South African economy and its citizenry paying for land seizures through lost agriculture export revenues, job opportunities and more.

South Africa's economy is already plummeting down, but this could have the potential to derail it altogether, and might end up turning South Africa into a Zimbabwe 2.0.

 

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