Banks caught amid EWC disaster

Who will keep paying mortgage bonds if or when government takes property?
Image: Shutterstock

The proposed change to the Constitution to allow expropriation without compensation (EWC) that is set to serve before Parliament in the current sitting, is bound to have a huge impact on banks, the financial system in general and the economy overall.

It will hit the very foundation on which any successful economy is built: that of private property rights.

While most people believe that economic debate is the domain for economists to talk about figures, percentages and ratios and produce incomprehensible graphs, the current debate will quickly prove the reality of how economic principles affect people.

We can sum up the impact of the proposed Draft Constitutional Eighteenth Amendment Bill of 2019 that will legalise EWC in three questions:

  • Will anybody keep paying their mortgage bonds if government takes their property without any payment?
  • How can banks enforce payment of a bond if the underlying property is taken?
  • How will it affect people?

Banks are caught in the middle of this disaster and they have no way out.

On the one hand, bankers realise that it is unreasonable and unfair to expect borrowers to keep paying bonds if government takes away what usually is a lender’s biggest capital asset. On the other, banks have a responsibility towards their depositors.

In the case of a successful farm – where the seed of EWC was originally planted – the suddenly-unemployed farmer will not have the ability to repay the bond or any other debt associated with his farming business, or to pay his credit card. The farmer will be rendered bankrupt when he still owes the debt intact, but no longer owns the asset.

The same goes for any other business owner or household, because the current draft legislation to change the Constitution to enable EWC has changed significantly in a few key aspects. Early talks of EWC referred to the redistribution of land, with the focus on agricultural land.

The draft bill now refers to property, which includes any improvements and buildings on a farm.

The draft bill also paves the way to effectively wipe off the table the possibility that farmers, or anybody else, will be compensated for millions of rands worth of improvements and infrastructure on land.

The Institute of Race Relation says in an analysis of the draft legislation that the reference to “property” would also include improvements such as houses, office blocks, shopping centres, factories, hotels, schools and hospitals. “EWC will allow government to take away your property and leave SA poorer and hungrier,” says the IRR.

Government is pushing for more power to decide the extent of EWC. Previously, a clause in the draft bill would have let let courts decide in which instances EWC would be enacted. The court had to decide in what instances property and any improve thereon could be expropriated without payment.

The IRR says the bill now makes provision for six instances in which no compensation is necessary, as well as a new proposal that new instances can be added by way of new statutes to the bill. Any new statute would only require a simple majority in Parliament to be enacted.

“The ANC has now further undermined the public participation process by declaring that the draft bill must be amended to give the power to decide on compensation to the executive, rather than the courts,” according to the IRR analysis.

The banks are fully aware of the situation, and scared.

Silence from banks

None of the commercial banks were willing to answer Moneyweb’s straight question of what they will do if government takes away properties and owners refuse to pay the outstanding bonds. They were not even willing to discuss the simpler question of the current procedure when dealing with mortgage bond arrears.

Absa ignored Moneyweb’s specific questions and responded by way of its media relations department with a short statement: “The parliamentary process to amend Section 25 of the Constitution is an on-going process. We cannot comment at this stage on the matter. We will focus our attention on making our contribution to parliament when the opportunity arises”.

Other banks did not answer the questions, referring Moneyweb to the Banking Association of South Africa (Basa). Bongane Sibanyoni, head of regulatory advocacy and policy at Nedbank, says that it’s currently participating in a process to comment through Basa and other business forums on the draft amendments to the Constitution.

“Until there’s further clarity on this process, it is business as usual at Nedbank. We continue to assess and grant new mortgage loans as per our usual rules and processes. Bond repayments, which are the subject of a contractual agreement, remain due and payable,” says Sibanyoni.

Basa promised answers as soon as its executives all had an input. Ironically, Basa’s executive committee comprises individual bank executives. A few days passed and no response was received.

Government business

Nobody can really blame the banks for their reluctance to take a hard stand. Banks get a lot of business from the different levels of government and parastatals. Government uses bank accounts, makes loans and deposits cash. Government, to a large extend, issues bank licences and makes the rules for banking in SA.

Government is also the single largest employer in SA and all its employees have bank accounts, hire purchase agreements and even bonds – without suggesting that a delay of one or two days in salary payments to a specific bank might entice employees to move to a friendlier bank or that such a delay is even possible if a bank gets too critical.

FNB says that it continues to monitor the developments on land reform. “The bank is actively participating in the ongoing constitutional review process through Basa as part of the broader industry.

“The SA government has assured the country that the implementation of land reform will consider the impact on the economy, property rights and job and food security. Therefore, we remain optimistic that the process will be managed in a responsible [way],” says FNB.

Unfortunately, there is no guarantee that the majority of politicians understand basic economic principles and the effect of land grabs on banks and the economy.

Far-reaching effects

Reserve Bank figures – based on compulsory monthly reports from all registered banks doing business in SA – show that total mortgage bonds amounted to R1 397 billion at the end of January. It includes farms and commercial, industrial and residential properties. Commercial banks has extended another R1 billion to the Land Bank, shown separately in the Reserve Bank’s figures.

If only 5% of the underlying properties are affected by EWC, capital to the value of nearly R70 billion simply disappears. After setting a precedent, it can be argued that the total value of all the outstanding bonds reverts to zero.

The effect on individual banks is equally devastating. As an example, FirstRand’s latest interim results shows that FNB had outstanding mortgage bonds of R217 billion at the end of June 2019. This compares with FirstRand group’s total shareholders capital of R145 billion at the end of June.

Note than there are more mortgages in its Rand Merchant Bank division.

FirstRand has huge assets, but also huge liabilities. The same goes for all the other banks. The biggest of all banks’ liabilities is money owned to depositors, as banks are in the business of taking in deposits and lending out the exact same money to borrowers.

The walking trail is fairly straight from people refusing or unable to pay mortgages to depositors losing their money.

The current system of long-term loans secured by mortgage bonds on property works well, if brutally painful to someone who falls behind with their bond repayments. In short, the bank starts legal action to attach the property and sells it to somebody else to recover its depositors’ money.

The pending EWC legislation might render this procedure obsolete. Courts are mandated to be just and fair and the contractual obligation in terms of the bond agreement of the original property owner must be considered against the unfairness of expropriation in a court ruling.

EWC is bound to leave banks in the middle of the mess.

Politicians don’t realise that the economy is actually about people, where expectations and confidence shape the future.

Some people will hold back a few months before buying a new house or car; a few developers might hold back on planning a new development; and a few farmers might decide to forgo the cost of planting a bigger crop or raising more chickens. A foreign firm might delay investment in SA.

A little makes a big difference when planning any economic activity, as the difference between a GDP growth of 0.5% per annum and 1.5% illustrates when people reduced their spending and production plans by a mere 1%.

# To get to the crux of EWC, here are the questions set to banks:

  1. If government takes my farm, small holding, house or factory, do I need to keep paying my bond, even if legally obliged?
  2. What will the bank do if I stop paying, seeing that I do not own the property any more?
  3. The property is security for the bond and the bank holds the title dead until the mortgage is paid in full. How does this change when EWC is legislated?
  4. What are the steps the bank can take currently when somebody defaults on their bond?
  5. Can the bank attach other property, such as my car, another house or other movable property to settle the debt on the outstanding loan when I refuse to pay when losing my property?
  6. What is the total value of the bank’s mortgage bond book?
  7. If my property is targeted, I will be tempted to max out my bond to reduce my loss. Maybe even my credit card, overdraft and personal loan, moving the loss to the bank. If my credit score is shot, why would it make a difference? How can the bank prevent it?
  8. What is your opinion on the effect of EWC on the financial sector and economy?
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Property could also refer to capital (retirement or not) or intellectual property or your business or …. well anything you own actually.

So now state capture moves to the phase of redistribution of citizen assets…

Due to bureaucracy I waited a decade for a property development to be approved. Not only did local council lose, but so did local business with a positive spinoff and Government (Vat)

I did a quick calculation

The loss in revenue all this time (considering Rates, water,electricity) to the Municipality is R285 million, never mind the spin off to local business and Vat

This in part is what the article alludes to when it reads that these people DO NOT UNDERSTAND BASIC ECONOMICS

My Development is one of a few that was and many still are faced with all types of unnecessary challenges

Now we know why this country is in an abyss

They have an dark agenda. No sane Government voted in by the people for the people will behave like this

In the meanwhile, with EWC looming and a dead property market one must have rocks in your head to continue with huge capital ventures

We all lose!

They can’t even give away Constantia or Hout Bay properties anymore…

I wonder how long Samuel Seeff will have to wait looking at his watch waiting for his next sale after this trainwreck legislation really hits the property market?

Have a house currently on the front row of llandudno. Asking 45ish mill. Been for around 5 months only so far….. Fair amount of views, not a single offer as yet….

“liberation” of assets. They could not try any harder to destroy what’s left of sa

Okay then, I would suspect we would then qualify for refugee status and be able to choose our next home. No need to comply with emigration requirements.Your assets better be offshore already.

Series of events:
1. Collapse of the financial system due to unserviceable debt and worthless assets. This spills over into a general economic collapse.
2. Start of a mini Civil war leading to a scorched earth policy.
3. Economic sanctions against SA.
4. Starvation,poverty and war ala the rest of Africa and now Venuzuala.

God help us all.

I agree with you. It is always worth remembering that, contrary to popular belief, revolutions are started and driven by the middle classes, not the poorest of the poor. Mandela, for example, was a middle-class person, a lawyer. Take away the possessions of a middle-class person by government force, and you turn him into a man with a giant grudge and nothing to lose. Couple this to the fact that many whites had military training, and many whites possess firearms, and the regime is looking for an armed insurrection that will make the Irish Troubles look like a Sunday School picnic. The spark in the powder keg will be first time a gang of red berets tries to invade an inhabited farm.

Si Vie Pacem ?? Para Bellum !!!

Not always… Just look at Zim.

And thru each one of those steps the anc grows even more support from the majority….. Except the last step… That’s when the anc turn around and eat the majority. But up untill then the majority be loving it.
This isn’t the anc fault. This is the fault of the majority that supports this. Remember this down the line when they cry for help when it’s there turn to get eaten by the monster. Same as in Zim right now…..
Totally self-inflicted.
And WAS totally avoidable.
Look around now and remember who is cheering this process all on….. Tomorrow they going to be acting like victims asking for yr help again…
When that time comes remember all this and then decide wether yr actions towards them should be nice or fair.

Of course it’s the ANC’s fault.

It’s starts with the message leadership continues to pour down the throat of the masses.
The majority follows them because it’s all they’ve really known, and it’s easy to influence a poor, desperate and unfortunately mostly uneducated majority into believing your skewed propoganda.
There’s a reason the ANC has neglected education in this country – to continue to make it easy for them to influence the masses.

Who a nation chooses to lead them is a mirror of themselves. The ANC voters know that if they were in power they would act in the same way. The voters and leaders are two side of the same coin.

As for the now starving Zimbabweans I feel for them as they are lovely people but to starve in what should be the bread basket of the world is inexcusable. There is nothing we can do. They must help themselves. There is no reason not to have food. A friend flew over Zim last week and told me all he saw were farms in ruins.

Having spent years trying to uplift my domestic worker I have now realised that I could give her everything I own and the only difference would be that we would both be poor.

EWC = Zim-disaster x 1 000 000

The emphasis on mortgaged properties lacks relevance. All one is trying to do is negotiate how one redistributes the loss. In such a zero sum game, the moral turpitude of the ANC, however, remains very much intact. Either way the result is almost certainly going to be catastrophic and predictably so for the country. The rand will collapse, interest rates will soar and food shortages and riots will be commonplace. Many western governments will impose sanctions in the ANC politburo. Exchange controls will likely be imposed to deal with massive capital flight but any attempts to stem exodus of qualified and skilled personnel will be in vain. One must remember that those who vote ANC effectively choose this course of action. They choose famine, poverty and no hope.

The mortgaged or not status of a property is completely relevant. What would you do if you’re a banker? I know what I’d do: I’d go and whisper in the cadres’ ears that it’s better to steal non-mortgaged properties. Easy to do a scan of which properties aren’t subject to a bond at the Deeds Office. There are plenty of farms and residential properties that are paid off already, and stealing these would not cause resistance from the banks.

The equation is easy !!! You try to taka my stuff- you die !!!!

Whether a property is mortgaged or not is irrelevant in this debate. The point is that if any property is expropriated without fair compensation, whether that property is mortgaged or not, it will impact negatively on the value of all properties.

Property is not only a place to live in. It has a certain value for the owner, the municipality, SARS and to the economy in general. The owner pays rates and taxes, capital gains tax and estate duties based on the value of the property. When the right to own property is abandoned, then all property loses all its value. If an unmortgaged property is expropriated, a mortgaged property becomes worthless to the owner and the mortgage becomes worthless to the bank. The owner may still be living in the house, but the market value will become less than zero because the municipality will still try to extort rates and taxes from you.

It would be a massive disincentive to pay your loan if government only takes paid-up properties.

Screw the banks. For decades if one fell behind with loan payments they auctioned your house for a portion of the value just to get their money back. And they sued people for astronomical amounts thereby making lawyers rich.

In the anarchy and imminent civil war that will follow, I can’t see how the Banks will function anyway….and also I don’t think they are exempted from EWC and nationalization?

While the multi millionaire leaders of these banks who don’t whisper a negative word will flee to their Swiss chalets in their private jets

@Chev. Agree, the banks will cease to function in such scenario.

Well, if the EFF takes over power from the ANC, I think it will be easier just to “nationalize the banks” (as they threatened at some point)…than struggle with indiv properties.

Then they cry king over depositors’ money.

A “run on the banks” by depositors is the sign to watch out for. A limit of R100/p.d. withdrawal (ATM or online banking) will be brought in.

If ‘confidence shapes the future’ then EWC is destroying confidence.

spot on…confidence confidence confidence !!!

If the ANC survives the next election – South Africa will not —It is that simple!!!!!

One person’s debt is another person’s asset. Banks “manufacture” money when they extend a loan. Under the fractional reserve banking system, the bank lends out a multiple of the deposits it received. For every R10 received in deposits, the bank lends out R100.

This is where we have to focus now – when a property is expropriated, then the bond on that property is also expropriated and the deposits that backed that loan are also expropriated. When the value of an R100 loan is destroyed, then the value of the R10 deposit that backs that loan is also destroyed.

Expropriation without compensation implies the similtanuous expropriation of all deposits in the banking system. It goes further though. Not only will there be the classic run on the banks, but their shares will also be worthless and they won’t be able to assist the Reserve Bank with monetary policy because their balance sheets will be decimated.

This leads to an implosion in the money supply. The country runs out of money to do transactions. Your credit card and ATM stops working. The Reserve Bank will mount an attempt to rectify this carnage by printing money. This leads to the devaluation of the purchasing power of the currency. The cost to fly a cargo plane filled with newly printed notes from Germany to Zimbabwe was more than the value of the cargo. Inflation reached thousands of percentage points. The cost of bread doubled every hour. People demanded to be paid 3 times a day, not once a month. Municipalities go bankrupt because of the previous month’s rates and taxes cannot fund this month’s higher salaries. In the shops, the shelves run empty, the taps run dry and sewage flows down the streets.

It gets worse still. The size of the population is a function of property rights. Modern economies can provide for larger population sizes because property rights enable entrepreneurs to manufacture stuff and to produce food. When a property is expropriated, then the size of the population will have to shrink to reflect the lack of property rights. This invokes the Malthusian Trap. In South Africa, this implies the death of about 25 million people over a 5 year period.

All modern economies are built on property rights. When a society decides to expropriate property, then they are choosing to go back to the stone age.

Bitcoin seems the only way out !

This invokes the Malthusian Trap. In South Africa, this implies the death of about 25 million people over a 5 year period.

So maybe it will be good to return to SA in 6 years.

Everyone I have spoken to who support this policy, and that includes some commentators in various publications, insist that this will not happen in SA. Somehow we are superhuman in SA. If everyone else who puts their fingers in an electric socket will be electrocuted but in SA we are different – we can do it and will come off unscathed – farcical thinking.

In SA you can put your fingers in an electric socket and not get electrocuted thanks to load shedding.

Correct. Which is why there EWC (ANC style) would be as cataclysmic as the Land Grab (Mugabe Style).

Agree. And no large scale land grab needs to take place…ONLY the UNCERTAINTY for investors will cease ANY significant economic activity in SA.

@Sensei: Perfectly summarised. Now I would love for some opposition party to present your summary in parliament and ask the ruling (not governing) criminal cabal of cadres to all read it and for their esteemed leader, the Squirrel, to explicitly confirm to the nation why relative to their EWC “dream”, that what you write is not correct and why. That can go on public record and be shared at the next Davos meeting.

This lot does not have the capability to figure out what the consequences would be.

So the approach is lets see what will happen when we run face first into a wall.

Think of the quality of people in the ANC NEC. These brightsparks are making the judgement calls.

The article describes the salt crystal on a feather of the penguin that is sitting on an iceberg.

Let us take a look at the iceberg. In Venezuela, Hugo Chavez and Nicholas Maduro have found the cure for type-2 diabetes. They expropriated property and then all of a sudden, the people lost a lot of weight. The average Venezuelan lost 14 kg of body weight per year for the last two years. This is a good thing because the expropriation of property also led to the unavailability of insulin, antibiotics and antiretrovirals.

Expropriation of property is a quick cure for over-population. Expropriation of property = expropriation of lives. This is what the iceberg looks like.

The iceberg is floating around in South African society. We can navigate around it, or we can hit it. The choice is ours.

The choice is unfortunately not ours, but the choice of the millions of voters who are fans of the ANC and EFF.

The draft bill is very clear: the bond will be terminated at the point of EWC. The banks are running scared, but expect the unbonded land owners to be the first victims.

EWC is just a naked landgrab. This approach will guarantee that no one will be prepared to invest in improvements on property – with the dire outcome for government revenues. And if they wanted to take the risk, the banks would not lend them any money. The economic output from property will drop drastically. Government and local municipality revenues will vaporise. Government will not be able to borrow and by then our money will be worthless anyway.

That is what I expect too. The ANC regime will target smaller, unbonded farmers who cannot afford to fight through the skewed court system. They think this will not “disrupt the economy”. I don’t know. Spin offs for the ANC elites is picking up property through claims or at discount prices as fear sends them dropping. Cyril et al want to be more than ZAR billionaires, they want Mugabe or dos Santos type wealth.

The ANC thinks just the spectre of EWC is enough to lure voters from the EFF camp and of course it is adjusted by lies (eg. whites own 72% of farmland) to attract the populist sentiment of taking from the land thieves.

If they expropriate one property owner at less than market value, the entire economy will come crashing down. Just one single property is all it takes. If the legal system is corrupted by a law that legalises plunder, then the entire economy is exposed to legalised plunder.

If they expropriate one small farmer without compensating him at fair value, then at the same time, by implication, they will be expropriating all farms, the entire property sector, all pension funds and private residences without fair compensation. They won’t take your house, but your house will lose its value because no buyer will get a bond to support the value of your house.

One case is all it takes. You either have a right to own property or you don’t. If the law infringes on the property rights of one person, it does so to the entire population and to every legal entity.

I can’t wait for the follow-up article from one of the asset managers saying how cheap financials are….

Dear Magnus, if you want to write an article that would be of great interest and relevance to people, why not write an article that is a step-by-step list for a South African to acquire a foreign bank account and to move their money out? Kind regards, Bruno

No need for Magnus to publish a “step by step list”. Just contact him! (or Gavin B in Mauritius). That’s exactly what they do.

Magnus – we need the idiots guide on financial emigration and quickly!!!!!

Much easier that you may think to diversify investments offshore – speak to an independent regulated financial adviser who works with independent offshore asset managers, who are licenced to undertake business with SA resident clients… This is a significant part of our business based here in Jersey, with portfolios available from $100k /E100K OR £100K.. or reply to me and I will point you in the right direction

Magnus Heystek
By any valuation measure local Financial shares are cheap. That does not mean fund managers have to buy. Then again market history is clear, if you but ‘cheap’ you buy with the odds in your favour. I am as cynical about South Africa as a human could possibly be but surely that does not mean there will not be any stock market opportunities ever again. Consistently knocking the entire investment industry because someone dared to poke fun at you in public is also a bit childlike.

Well maybe you know what the Zim and Venezuelan stock markets are doing but my feeling is, that compared to the first world and “genuine” emerging markets, there is little opportunity there. That is where I think SA is heading, like it or not, with EWC.

But, unless you are an “asset manager”, your choice with your money. Absolutely mad if you invest in an SA company that is investing in SA I reckon. Not that many SA companies investing outside of SA are doing any better (SASOL, Woolies etc) but, again I think, that is because it was just a way of executives getting their loot offshore.

I will take my chances with the oft vilified Mr Trump over our ANC crooks anytime thank you.

@Colson.

I tend to lean in favour of Paul K’s sentiment. The stock market opportunity you refer to, may just be the odd upward recovery of a local share, in its long-term bear-market down trend (we’ve been seeing since 2015…more sideways than down, but still…rest of global markets left SA behind)

Yes, 2019 was a better year on the ALSI (esp compared to 2018). But we could be riding the up-spikes in a down-market, for all we know.

Zim’s economy is so small, the number of tradable stock left is a shadow of its former self. Same with SA….we’re already down to under 400 stocks on the JSE (two decades ago there were 700+ equities to choose from. SA had a plethora of mining shares as well.)

Reducing money in JSE circulation. Yes, you’re going to find good opportunities in future, but will generally become harder.

Sorry chum, I also prefer Trump over Cyril 😉

But isn’t that the point, is that one invests where the opportunities are and there are many companies listed on the JSE that have little or no exposure to South Africa and its weak economy.

The entire concept of EWC is a political tool surrounded by rhetoric to appease voters. We already know that the government owns the most land in the country and has more than enough land to give everyone acres and acres but that is not the problem. The problem is that specific areas of land will be targeted namely those with perceived value such as operating farms and businesses. The empty field next door will be ignored. Next, one would need to question who is behind each claim. The average man in the street has no desire to go “farming” as indicated by many surveys done.

IMO there will be some “powerful” people behind these claims and as usual the new legislation will only benefit a few and not the masses. The next question, even if the person has a claim should the claim not be through some hierarchical structure namely the king or the chief of that particular group or in that particular area. Traditionally the chiefs claimed ownership of land. Perhaps someone should go and demand land from King Goodwill and see how far you get for example.

Insofar as the bonds go, well the banks cant accept major breaches in the bond contract and ignore others for example you cant transfer title deeds without the bank’s knowledge if your bond is still active.

What is even more concerning is the fact that EWC is ALREADY covered in the constitution and our constitution has proven to be quite robust over the past 26 years, by allowing the government to make amendments when the see fit for political gain will destroy the integrity and open the door for many amendments until it is rendered useless not to mention what will happen when the dictators take over SA which they will in time.

Government know how the outside financial world will react if property is stolen lawfully, without a helping hand from banks and co. They must be part and parcel of the coming paradise, banks administrated.

A bond condition stipulates property and as such it must be described in the bond to be registered. Therefore it stands to reason that if this corrupt government grabs the property/investment, the mortgagor will immediately stop paying and the banks will have nothing to fall back on – approximately 80% of mortgagors have one property registered in their name and that’s it.

In addition, if this happens, property becomes almost unobtainable for anyone who is not a beneficiary of EWC.

What bank will finance a property with no security whatsoever? As I see it, that then leaves the potential buyer with two options:
1.) An unsecured loan, and the high interest rates that go with it.
2.) Cash.

Neither of these options are viable for the average South African, and even if it were, who’s crazy enough to take that level of risk on to themselves?

And this is just for the man on the street – the picture becomes ever more bleak if you take into account how food security goes down the drain if no one wants to risk owning a farm anymore.

Lets be candid. The banks do not the slightest idea what to do. The legislation in its proposed form means that the State can seize any property so the banks may well be technically insolvent ie the fair value of their mortgage books is impaired.

What I suggest is get rid of your assets, take them offshore and encumber them even at 10% LTV. The offshore banks will then be unable to repatriate your foreign funds even if ordered to do so by the ANC criminals.

And if you can work or afford to retire …flee ..while you can and live without the maid, weather and family and friends. The alternative is total poverty

We are lucky to have a long-running experiment in the effect of property ownership in South Africa. Our unique history provides us with ample evidence about the value of property rights.

People leave those areas where property rights are lacking, to work and find refuge in those areas where the law protects property rights. The traditional homelands are regions of poverty and decay. There are no jobs, no opportunities and a lack of services. People survive on the social grant. If everybody who originated from those rural areas was forced to go back and live there, then 80% of them will die of hunger.

We find opportunities, jobs, entrepreneurship, economic growth, services, and wealth in those parts of our country that has property rights.

The Ingonyama Trust should be disbanded and the people should receive the title deeds to their land. This progressive act will bring prosperity to those poverty-stricken regions. The ANC should bring the progress and prosperity that goes with property rights, to the rural areas. They should not force the poverty and decay that goes with the absence of property rights, on the civilised part of South Africa.

The ANC won’t do it – they need to be voted out and a more responsible government can take over. Unfortunately that is unlikely to happen.

I would wager that will never happen. Not peacefully that is. Our dictatorship is going to ensure that will be the case from their committee room in Lootfreely House. Squirrel, their current sock puppet, is only there because he’s saying the right things but not doing them. Impeachment is but a vote away, so he will play ball as long as he wishes to remain where he is.

I foresee a similar response from society as in the E-tolls saga currently playing out. Those behind on their bond maybe pay the minimum for a while until the storm gathers intensity & then a much larger portion of society will begin to boycott monthly payments this will overwhelm the banking sector & the economy as a whole. All it will take is the first domino to fall then it’s too late….To be continued….

EWC, invented by our very own ancestors, Bell Potinger, is just an election tool. Something to give the poor downtrodden going no where black person a glimmer of hope to vote ANC yet again.

Farmers are not the target, Malema the white hater, likes to think so but he is so behind the curve it is not true.

The masses will target urban areas. Most live in the cities so are not going to move to the middle of the Karroo with no water, power, spaza shops, taxis etc. Sandton beware, your gazebos and tennis courts will soon be squatter camps.

And you all thought you were safe….. ha ha

Strue, I live 100km from Joburg. No squatters here, but the closer you get to Gauteng, the more there are, which are essentially EWC in any case.

The article heading with the choice of words EWC “disaster”.

But CR said it will be undertaken in “orderly manner”? (No hint of ‘disaster’….)

But wait….how can damage be done “orderly”

During wartime, a Submarine captain sends final radio message to target vessel “Enemy ship. You are about to be torpedoed!! Fear no harm, as we will strike and sink you in an “orderly manner”.

Artillery battery commander to enemy troops located in the open:

“Your position has been pinpointed by our forward observers! Our G5 & multiple rocket artillery will remove the entire map-grid where you’re currently positioned! We will, in an orderly manner, shred everyone in the open with whizzing pieces of red-hot tungsten fragments”

Are they going to offer alternative accommodation for those they put out on the street? Or can you continue to stay in your house and pay rent to the govt? Will they have the red ants evicting people? Or the police?

If your property accidentally catches fire during the eviction can you claim from insurance?

DogEatDog, you have completely overestimated the “Powers that be” if your questions are addressed to them. They cannot think that far ahead, tonight when the sun goes down is their limit, and then, to expect solutions from them is a pipe dream!! Sorry Mate!

It’s time to realise that the “boiled frog syndrome” has now reached boiling point and that if you have any assets here, to ensure that they can easily and swiftly be made realisable and exportable.

It’s also time to realise that South Africa is simply another African state, run by yet another corrupt, self-serving political clique which will do anything to stay in power. We are no different from the rest North of us.

When even Anglo Gold leaves, you know the end is not far off.

This EWC thing is a storm in a teacup.
Moenie die bobejaan agter die berg gaan haal nie.

I agree. This is the ANC fighting the ANC. A dog chasing after its own tail. They won’t get the necessary majority in parliament and if they do, the Constitutional Court will not abandon its position in favour of a politician with a personal agenda.

Sensei & C.S. you may have a point.

Have heard comments elsewhere that EWC serves as the prefect emotive distraction, taking the public’s focus away from the ANC’s daily poor service delivery & mismanagement / ongoing corruption.

This may well be true, let us hope it is but SA lives on “hope”. Problem is perception. I have a farm and my perception is that values have dropped, buyers are few and bank loans even more so. This alone dampens employment and investment and hence the economy. Also there is a built up perception amongst some, from the poor to the politically connected (even the ANC elite), that they will be getting productive farms for nothing. Not delivering could be a problem for Mr Sly Cyril. Either way, lose, lose for SA.

There’s another dimension to EWC that maybe the ANC hasn’t thought of. If properties are confiscated on a large enough scale, who is going to pay the municipal taxes on that land? A huge amount of money flows into municipal coffers from landowners. They will be cutting their own salaries. Moreover, what happens if a tax boycott on properties goes into effect. If the land is not “ours” then why should we pay for it? Their EWC venture is going to have MUCH further reaching effects than they imagine.

Well thought out!

And we won’t need to end with municipalities coming to a halt, poor SARS won’t make any headway with collections…..because they will not be able to find an economy to tax.

ANC madness extends to create uncertainty and compromise confidence in the banking sector. When will the madness end? Hopefully there will be something left of South Africa when it does.

The Law Of Contracts in ZA:
For a contract to be valid, it must have four key elements: agreement, capacity, consideration, and intention.
So, the Banks will screw you over after the goverment has screwed you.
Simple, actually.

Good point. Also consider this:

If my property is taken ‘legally’ by the State (supported by the Constitution), then one assume the previous (white) seller sold me a house on false pretenses (that we’re not supposed to own property in SA as a race) that such illegal property that wasn’t his to start with. And his forebear, etc.

Hence, if the Title Deed is not enforceable in court, i.e. becomes invalid through the Constitution, the homeloan “contract” which is based on the premise of legal title deed ownership, now also becomes invalid.

You’ll get soon enough a clever lawyer/attorney to get this principle across. The banks…be very afraid!

FTANC – and it is not — For The ANC

…mind your language, sir! 😉

EWC is a communist/socialist plan. ANC and EFF are communist and socialist, why are we surprised that they’re doing what they’ve been voted in to do, ie a manifestation of voter’s desires. The problem is with your fellow South African that voted in these parties, not the parties themselves. You cannot expect ANC/EFF to act differently or change, therefore our problem lies with our fellow man/woman.

I entered into a contract with my bank who financed the purchase of the property and retain the title deed. If they hand over to another party something that legally they entered into contract with me to provide, for which I am expected to pay them- then they have broken contract with me. Why should we the ordinary joe have to fight government on this. these banks have the muscle to tell government to stff off. They must stand up for their customers. Every debt the banks have with government and ANC fat cats is unlikely to get paid. The banks should rather be looking after their paying customers.

this is wicked and evil theft that the government is proposing. no different to the apartheid government. and they will pay dearly for it when in 20 years time SA is a bankrupt shell of its former glory.

End of comments.

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