US President Donald Trump has cut off aid to South Africa and offered Afrikaans farmers asylum based on a fantasy version of South African land rights. The reality is far removed from Trump’s executive order that ‘the government of South Africa blatantly discriminates against ethnic minority descendants of settler groups’.
More than 30 years after South Africa’s first democratic election, and one-and-a-half generations later, the land/property issue has still not been resolved.
Security of property rights is one of the main pillars of a democratic state and a foundation of good governance. The debate over land expropriation without payment has been raging since 1994, and this is now at the top of the agenda again with the signing into law of the Expropriation Act on 24 January 2025 by President Cyril Ramaphosa, and by Donald Trump taking up the issue.
The controversy around the new act
The enactment of the Expropriation Act has sparked diverse reactions domestically and internationally. Some opposition parties and organisations have expressed concerns about potential infringements on property rights and the possible negative impact on investment.
Legal challenges are anticipated, with critics arguing that the law may violate constitutional protections. The fact is that the new law is causing uncertainty and instability.
In an unprecedented step, Ramaphosa did not discuss signing and promulgating the Expropriation Bill as an act with his Government of National Unity (GNU) partners, which has caused huge and widespread reactions, including from Trump and Elon Musk in the US.
This has raised concerns regarding the future of the GNU. Since its establishment in 2024, the GNU has successfully stabilised the government and created a positive economic outlook. The DA has now even indicated that they reject certain sections of the act and are prepared to lodge legal proceedings. This means the government will be in a court battle, causing instability.
The EFF has already indicated that it will join the GNU if the DA withdraws. The EFF, however, stands for the nationalisation of basically everything, from land to banks to mining. This could have a destructive impact on governance, investment and the economy.
Members from both the EFF and ANC have in the past made statements relating to land expropriation without compensation, and have even stated that the Constitution should be amended to remove or amend Section 25.
Policy uncertainty and investor confidence
Policy uncertainty has long plagued the South African government. This causes negative sentiment within local and international markets. Investors will not invest in uncertain environments where it seems that property ownership is not fully guaranteed.
Ramaphosa has been under increasing pressure trying to ensure his own party, which lost the majority vote in the 2024 elections and which is divided, remains content with the situation while dealing with new partners in the GNU that have different agendas.
The new act seems to confuse many people, including Trump and members of the GNU. The possibility of land grabs (taking property without compensation) could increase, affecting the risk of investment in South Africa.
The legal framework
Why is the new law necessary? The new law’s key provisions are as follows:
- It provides a framework for expropriating property for public purposes or in the public interest, including land reform initiatives, to address historical injustices stemming from apartheid-era policies.
- Before any expropriation can occur, the government must negotiate with property owners to reach an agreement on reasonable terms. Expropriation is only pursued if these negotiations are unsuccessful.
- Regarding compensation, the law allows for instances where “nil compensation” may be deemed appropriate, particularly in cases where land is unused or held for speculative purposes.
- However, any expropriation must adhere to the constitutional principle of just and equitable compensation, balancing public interest with the rights of property owners.
But what does the Constitution say about property rights and expropriation of property? Property rights and expropriation are governed by Section 25 of the Constitution, commonly referred to as the Property Clause. This section is part of the Bill of Rights and aims to balance the protection of property rights with the need for land reform, redistribution, and the restoration of land to address historical injustices.
Section 25(1) states that “No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.” This ensures that property cannot be taken without legal justification, protecting against arbitrary seizure.
Section 25(2) states that “Property may be expropriated only in terms of law of general application — (a) for a public purpose or in the public interest; and (b) subject to compensation, the amount of which and the time and manner of payment must be just and equitable, reflecting a balance between the public interest and the interests of those affected, having regard to all relevant circumstances.”
Public interest includes land reform and equitable access to natural resources.
Section 25(3) states that compensation must be “just and equitable”, considering factors like the current use of the property; history of acquisition and use; market value; extent of state investment; and purpose of expropriation. This broad approach allows flexibility beyond mere market value, especially in land reform cases.
Sections 25(4) to (9) recognise the state’s obligation to redress past injustices through land reform. The state must take reasonable legislative and other measures to enable equitable access to land, especially for historically disadvantaged groups; this includes restitution for people dispossessed after 1913 due to discriminatory laws.
The new Expropriation Act aligns with Section 25 by providing a legal framework for expropriation with or without compensation, depending on circumstances.
“Nil compensation” is possible where it’s just and equitable, such as for abandoned land or land held purely for speculation. But nil compensation seems unreasonable in section 12(3) in cases where land is not used by the owner and held for value appreciation or property held for speculation, and could be challenged in the courts.
Many property owners and developers hold properties for future use, and it’s part of the property industry of investment in future use and value. Speculation with land pockets is part of the risk process developers, and even individuals take within the property sector, intending to make a profit over the medium to long term.
The act, however, emphasises negotiation first, with expropriation as a last resort. However, property owners can take the legal route if they are not satisfied with the process and compensation.
Court cases are expensive, and it will be difficult for individuals to take on the state with its resources. It should be noted that the minister of public works and infrastructure must still draft regulations supporting the act, which must guide the expropriation of land with or without compensation.
Land reform reality
By 2024, estimates suggest that approximately 14 million hectares had been transferred to previously disadvantaged farmers since 1994 regarding the land reform processes, excluding private purchases and land acquired for non-farming purposes.
This figure represents about half of the initial target set by the government. The figures primarily account for land redistributed through official government programmes, and may not include land acquired through private transactions or other means.
The pace of land reform has been slow, and to assist in land reform in the short term, it is proposed that government-owned land must be listed in a portfolio through a land audit, and suitable properties released.
The South African government owns a substantial amount of land, some of which is designated for development purposes. An estimated two million hectares of state-owned farmland remains underutilised and could be allocated to emerging farmers and other development initiatives.
Recommendations and conclusions
To resolve the land issue effectively, the government must take a practical approach:
- Accelerate state land redistribution: the government should conduct a comprehensive land audit, release underutilised state land for productive use, and create opportunities through this process.
- Encourage private-sector participation: public-private partnerships could help facilitate sustainable land reform without jeopardising investment confidence.
- Maintain political stability: the actions of the president have negatively affected the trust within the GNU, which could result in a break-up of the partnership, resulting in an “unwanted” coalition. The GNU’s internal communication and collaboration must be strengthened to avoid policy decisions that alienate key coalition partners.
- The newly promulgated act has caused some concern regarding property rights in South Africa, which could have a negative impact on investment. The Constitution is, however, clear on protecting individuals’ property rights.
The land issues will remain at the top of the agenda as long as a clear and effective implementation action plan is not formulated. DM
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