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How to rescue SA’s land reform policy

Sisa Ngebulana, founder of JSE-listed Rebosis Property Fund, says government must speed up the release of title deeds.
Title deeds and training are pivotal if landowners are to access finance and use the land productively. Image: Shutterstock

One of the wealthiest and most successful property investors in South Africa, Sisa Ngebulana, has endorsed the rapid release of title deeds to existing beneficiaries of government-subsidised houses and rural landowners as a way to rescue the land reform policy. This as the ANC seeks to amend the Constitution to allow for land expropriation without compensation.

“Land is an important issue but we are generalising the debate,” says Ngebulana. “The real debate about the land issue is how do we get some people to own the land. And that starts with people in village areas.”

Although Ngebulana believes the ANC has good intentions with its land expropriation proposal, he says matters surrounding the land issue must be implemented correctly – otherwise “there is no point of doing it.”

And one of the ways to implement the policy correctly is to increase security of tenure. In other words, government must fast-track the release of title deeds.

“Most people don’t have title deeds to their land, yet they have invested a lot of their money,” says Ngebulana. “What does this mean? They cannot access financing if they have an opportunity because they don’t have the land title. That’s where it starts.” 

The idea is that once a title deed is released to a landowners, they will be able to use the deed to build wealth by securing a loan from commercial banks. Essentially, people will use their property or land as collateral to secure loans. 

“This will enable people to know they have a title and sense of ownership.”

Ngebulana heads up Rebosis, the first black-owned property group to be listed on the JSE, which owns a R19-billion property portfolio that includes Hemingways Mall in East London, Baywest Mall in Port Elizabeth and the Forest Hill City mall in Pretoria. He was speaking at the South African Institute for Black Property Practitioners’ convention on Wednesday. 

Arguably JSE-listed real estate companies are substantial landowners and might be impacted by SA’s move to expropriate land without compensation. 

Title deed backlog 

Although government has provided 3.8 million housing opportunities since 1994 through the Reconstruction and Development Programme (RDP), now referred to as Breaking New Ground, many people don’t have title deeds for the homes they live in. Deputy public works minister Jeremy Cronin recently estimated that 60% of South Africans do not have title deeds – a staggering figure which he attributes to weak policy, corruption within the state, and lack of will when it comes to land reform. 

The human settlements department had set a three-year target of fast-tracking the release of more than 800 000 title deeds by 2019.

In a shocking late-night address to the nation on July 31, president Cyril Ramaphosa reaffirmed the ANC’s position on land reform, saying the party had decided to amend Section 25 of the Constitution – known as the property clause – so it can push ahead with its plan to expropriate land without compensation. 

The move was seen as the ANC stepping up its efforts to expropriate land as it was announced while public hearings, headed by Parliament’s Constitutional Review Committee, on land were still ongoing across the country. 

There is still an information vacuum about land targeted for expropriation without compensation. All government has said is that land that has been abandoned or is already owned by the state will be targeted. 

Ngebulana says greater clarity is required as the absence of information creates “uneasiness and discomfort”.

“The issue cuts across racial lines. Whose land are they talking about? The reality is people are very concerned about where this thing is going and how far this will go as it’s not being defined as to what it means. The issue of expropriation without compensation needs to be well defined.”

One of the big failures of the land reform policy is that, despite the state spending an estimated R50 billion processing land claims since 1994, many beneficiaries have failed to make their land productive or produce an agricultural surplus. This is due to government not offering any post-land-claim support – whether financial or skills transfer. 

A new approach is required, says Ngebulana. 

“When you give people land we have to make sure people are trained in farming the land and to continue making it productive. It leads to disaster if this is not done.”

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“Deputy public works minister Jeremy Cronin recently estimated that 60% of South Africans do not have title deeds – a staggering figure which he attributes to weak policy, corruption within the state, and lack of will when it comes to land reform.”
When a sycophantic, ANC-denialist predator like J Crony admits that the fault is within the ANC-in-government, you know that “the state” [read: ANC] is the last body or grouping to be entrusting with rectifying the “original sin” [sic] or land redistribution. All that will happen is that more land will be Estina’ed and the fat cat oligarchs and nomenklatura will get more obscenely wealth-bloated.

“Deputy public works minister Jeremy Cronin recently estimated that 60% of South Africans do not have title deeds – a staggering figure which he attributes to weak policy, corruption within the state, and lack of will when it comes to land reform.”

SA communists sure are weird creatures, I thought the abolishment of private property is all what communism was about?
Handing out title deeds is a very capitalist thing to do, I guess even the SACP knows deep down what works and what doesn’t 😛

Lot of meaningless garbage. PC speak at its best.

Well if title deeds are given to blacks that will mean they will be classified as owners and that would detract from the preferred narrative of the populists, i.e. that all land is owned by whites – well the majority of land. That is a convenient statistic to have. State owned land does not have a race (or maybe it does?), so the status quo is exactly the way the populists want it to be – no new numbers added to the previously disadvantaged category.

A lot of African people were pushed to barren lands on which nothing grows, no minerals underneath, and you want to give people title deeds for such waste land???? are you thinking properly?? title or no title deed that land has no value for agric purposes, only for burial. We all know that productive land is in the hands of the minority unless and until people are honest to themselves, that precious land that lies in the hands of the few must be shared equitably. Who amongst you fellows would want to udetake agric activites at KwaNongoma? can one identify a parcel of land there were you can set up an agricultural enterprize there? lets be civil and honest and share this resource equitably. Then we can all call ourselves South African. Icho.

No. actually it is the other way around. Agriculture is a failure where collectivist cultures farm, and a success where capitalist cultures farm. The fact that these results coincide with certain racial demographics within South Africa, is just that – a coincidence. Most of South Africa is semi-arid, and classified as a dessert by international standards. Yet farmers provide in the needs of the population because they own the properties. Property ownership is the basis of a free market economy and motivates individuals to accept risk and employ capital to satisfy the needs of the consumer.

People do not own property in a collectivist society, the profit incentive is absent, and so there is no motivation to take risks and to employ capital for the benefit of the group. The “Tragedy of the Commons” describes these phenomena. When farmers without property rights share a piece of land, there is an incentive to overgraze that land to the detriment of the group. The farmer that keeps the most cattle is wealthier than those with few cattle are, yet the cost of overgrazing is borne equally by all. The profits are internalized and the costs are externalized. The community pays the price of overgrazing while the farmer with the most cattle reaps the profit.

This is the reason why traditional lands are an infertile wasteland and private property is fertile. This is the reason why people in traditional lands are poor and people in the rest of the country are wealthy. It has very little to do with the colour of people’s skin. It is all about economic systems and property rights.

We see these exact same consequences at SOE’s. The looting is internalized and the costs are externalized. The cadres walk away with the loot while the citizens pay the price. Under ANC rule, the SOE’s are a form of common property.

“Freedom in a commons brings ruin to all.” – Hardin

Humba, the Transkei and areas in Mpumulanga / Limpopo which house millions of rural black people are much more fertile and have much better rainfall than the areas traditionally inhabited by white farmers (Karoo, Western Cape, Northern Cape). But look at the production of a commercial farm in Natal vs. a neighbouring property owned by the Zulu king: there is usually zero production on the communal “farm” except to feed those who live there and the soil condition is usually much worse because there is no rotation farming / fertilization / erosion management / long term planning on communal “farms”). Farming takes long term investment, planning and management which require security of tenure above all else. Please note that there are many exceptions to the above generalisations I made, but I believe I describe the norm. This “norm” is visible in most places despite the extraordinary pressure on commercial farms in SA compared with the rest of the world where farmers are revered and protectionist trade policies exist to support them. In SA it costs farmers more to protect themselves and their crop than the price of the land. The fencing alone on many farms cost more than the ground!

Such a pity the people who should be reading these excellent replies are so ANC indoctrinated they cannot see the wood for the trees. Incapable of logic thought. last year we left Umfolozi/Hluhluwe Game Park through Northern gate.It is dense bush up to the fence and then rural wasteland. Nothing. Not a tree or plant or grass or anything.Just a few rural huts.

Any expropriation new law will need to have a color of skin deed base. Opening no can of worms, but ship loads.

End of comments.

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