Finally, more cash to speed up reform

February 22, 2019

PRESS READER /  21 FEBRUARY 2019 - 13.47 / LARRY CLAASEN

 

 

A central criticism has been the government’s lack of support for black farmers after they have been given land

 

Finance minister Tito Mboweni put it mildly when he said during his budget speech: “A robust debate on land is taking place in SA.”

 

 

 

 

It’s a big understatement, given that the snail-like pace of land reform has galvanised populist politicians, most notably EFF leader Julius Malema.

 

It’s a weak point for the ANC, which, in 1994, promised to transfer 30% of white-owned commercial land into black hands and restore land that was stripped from black South Africans.

 

By 1999, just 1% of that land had been returned. Land reform has been a dismal failure. Not only did the government set aside inadequate amounts to finance the land purchases, it compounded the problem by failing to meaningfully spend what it did have.

 

Last year, the ANC diagnosed the problem of the slow pace of land reform as a lack of funds, rather than incompetence. So it, with the EFF, called for a constitutional amendment to allow for expropriation without compensation.

 

But if the talk turned to expropriation without compensation, it was curious that this year Mboweni set aside a greater chunk of money for land reform.

 

This year, the National Treasury allocated R18.4bn to land reform — money which it said would help finalise more than 1,700 land restitution claims and buy more than 325,000ha for landless South Africans.

 

“We have set aside money to help our people buy their own houses, support land reform, and transfer title deeds,” he said.

 

Also, over the next three years, the Treasury has allocated R451.8m to the office of the valuer-general — which, as the title suggests, has the task of putting a value on land. This suggests that the valuer-general will have a greater role to play as the land issue becomes a more pressing priority.

 

But with the mood in the country having shifted to expropriation without compensation, some are questioning why these extra amounts for land reform have been set aside only now.

 

As Malema, an ardent supporter of taking land from whites, said after Mboweni’s speech: “He’s still allocating money to buy land when we’re busy amending the constitution to expropriate land without compensation.”

 

However, President Cyril Ramaphosa has clarified in recent months that “there will be no land grab” — which means that the government will need the extra cash if it wants to speed up land reform.

 

During his speech this week, Mboweni spoke frequently about land. At the outset, he said that as a part-time farmer himself, he knows that for the country to realise its goals, “we have to plant anew”, as a metaphor for fixing SA’S finances.

 

Apart from setting aside more cash for land reform, the Treasury also said it would set aside R3.7bn “to assist emerging farmers seeking to acquire land to farm”.

 

It’s an important point, and suggests that Mboweni has heard a central criticism over land reform, which is that after the government has transferred land to black farmers, there has been scant support for these emerging farmers.

 

The Treasury set aside another R138m to help resettled farmers buy equipment and develop their farms.

 

The budget documents speak of how part of Ramaphosa’s economic stimulus plan involves government and agricultural organisations implementing 262 priority land reform projects.

 

These 262 projects, Mboweni said, will cost R1.8bn. This will be funded by a “blendedfinance model”, in which the government and private companies will combine to support emerging black farmers. The government’s share of these costs will amount to R887m over the next few years.

 

Theo Boshoff, legal intelligence manager at the Agricultural Business Chamber, welcomes this move. Boshoff says the private sector has been lobbying for a blended-finance model for the past four years, as it effectively doubles the budget available for land reform. This would free the government to dedicate other funds to new land projects, while involving the private sector to a greater extent.

 

Requier Wait, head of economics and trade at Agrisa, describes it as a novel solution.

Of course, that is only one of the proposed fixes needed to address the sluggish pace of land reform. The government also needs to get rid of much of the red tape that has been strangling the process.

 

The speaks of how R2.7bn has been set aside for a new “autonomous national public entity accountable to the minister of rural development & land reform”. This commission would presumably be tasked with speeding up land reform.

 

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LINK : https://www.businesslive.co.za/fm/special-reports/2019-02-21-land-finally-more-cash-to-speed-up-reform/

 

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

 

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