On 23 January, President Cyril Ramaphosa signed into law the Expropriation Bill. Simply put, the bill allows the state to expropriate land in the public interest, including without compensation.

The signing of the Bill elicited no little backlash from the public, as well as from certain political parties, while others praised it.

But was all the fanfare warranted? According to Prof Waldo Krugell, the answer is an unequivocal “no”.

“President Ramaphosa’s signing of the Expropriation Bill is not, on the face of it, the crisis that some people make it out to be. It is important to remember that the state has always had the power to expropriate. The process of updating the law began in 2004, and last week's signing of the Bill is not directly related to the debate on expropriation without compensation of 2017 and 2018. The new Bill replaces the original law of 1975 and defines the circumstances under which the state can expropriate land in the public interest. It also defines the process by which the state must engage property owners and compensate them. The law will now be applied and interpreted by the courts,” says Krugell.

He further states that, although the reaction to the signing of the Bill might have been taken out of proportion, a clearer, more focused message would have done wonders to allay market fears.

“The fact that this sometimes sounds like a crisis says something about our politics. People feel the state can expropriate, but not everyone trusts this government to do so fairly. Political analysts say the President signed the law now because he had to send a signal to ANC loyalists that he still supports their agenda of the National Democratic Revolution. I do not know if that faction of the MK Party can still be persuaded, but the signal does nothing for the unity in the Government of National Unity. For the sake of investors and the economy, one would much rather hear a focused message of market-oriented reform. Research shows that policy uncertainty is bad for investment and low levels of investment are bad for economic growth. Faster growth is all that can create the opportunities that can reduce the inequalities of the past.”

Prof Waldo Krugell