Cautionary tale: Land expropriation in Africa

Donald Trump has reignited tensions over land expropriation in Africa. And let’s not forget the cautionary tale of our northerly neighbours …

A cautionary tale about land expropriation in Africa is found just across our northerly borders. Image: File/Fotor

The divisive topic of land expropriation in Africa made the headlines last month. This came after AfriForum spread misinformation to the United States government, prompting Donald Trump to threaten sanctions and cut vital aid. In response, President Cyril Ramaphosa insists he will resolve the confusion through ‘acceptable diplomatic channels’. However, as well-intentioned as the policy may be, it’s also worth exploring previous examples of land expropriation in Africa gone wrong.

Once such instance, of course, comes from our northerly neighbour, Zimbabwe. A once-great economy that fell foul of hasty political expediency. Zimbabwe’s experience represents one of modern history’s clearest examples of how poorly conceived, knee-jerk political policies can trigger catastrophic economic fallout, reports Daily Investor.

LAND EXPROPRIATION IN AFRICA

Zimbabwe gained independence in 1980 under Robert Mugabe. In so doing it inherited an economy built largely around commercial agriculture and was even celebrated as the ‘breadbasket of Africa’. However, like so much of Africa, its fertile lands existed alongside deep inequality. Roughly 5 000 white farmers owned more than 70% of the arable land – a legacy of the British colonial era.

As a result, in the ‘90s, facing growing political opposition, Mugabe began to fast-track a new land-reform programme. An initiative that authorised the seizure of white-owned commercial farms with zero compensation. Ostensibly a redistribution of land to landless black Zimbabweans.

DISASTROUS CONSEQUENCES

History tells us, this ill-conceived attempt at expropriation in Africa proved utterly disastrous. Rather than addressing historical injustices, it merely unleashed chaos. Farms were invaded, sometimes violently. Worse still, most of the new occupants lacked farming experience and access to capital. Agricultural infrastructure deteriorated rapidly, productivity plummeted and soon the ‘breadbasket of Africa’ was no more.

Moreover, this was only the beginning of Zimbabwe’s economic nightmare. Agriculture’s collapse rocked the entire economy. Without exports, foreign currency dried up. Soon the country couldn’t import essential goods, including fuel and parts for manufacturing. Money stashed away in commercial banks became worthless and devastated the entire financial sector.

HYPERINFLATION

What happened next after this misguided attempt at land expropriation in Africa became known as ‘hyperinflation’. Zimbabwe decided to print more money. However, without the backing of tangible foreign currency, it was effectively worthless. By 2008, inflation reached the almost incomprehensible rate of 80-billion percent. Citizens resorted to carrying suitcases of cash for basic transactions, and savings, pensions and retirement annuities were all but wiped out.

As a result, the human toll was immense. Unemployment soared above 80%. Food production dropped dramatically. And an estimated 25% of the population fled the country – mostly to South Africa – creating a massive diaspora. Therefore, the lesson on land expropriation in Africa is that it should not take place without careful consideration of its systemic consequences. Property rights, when abruptly violated, undermine investment confidence in any country. Plus, agricultural productivity depends on skills and capital, not just access to land.

WHAT THE SOUTH AFRICAN ACT SAYS

So, what does the contentious Land Expropriation Act in South Africa state? Basically, that land may be acquired, “For nil compensation in the public interest” when:

Land is not being used. And the owner’s main purpose is not to develop the land or use it to generate income but to benefit from the appreciation of its market value.
Where an organ of state holds land that it is not using for its core functions. And is not reasonably likely to require the land for its future activities in that regard.
Where an owner has abandoned the land by failing to exercise control over it.
Where the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.

DO YOU THINK LAND SHOULD BE SEIZED WITHOUT COMPENSATION?

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