News Post

Who will be hit hardest by land redistribution without compensation

Mar 15 , 2018

Economic Freedom Fighters (EFF) leader Julius Malema again made headlines over the past weekend with controversial comments on land ownership in South Africa.

Speaking at a supporter rally in Johannesburg, Malema said that the land in South Africa was taken by whites through genocide, and would be returned to the people.

In his address, the party leader was careful to word things in a way that did not overtly incite racial tensions, saying that the land should be taken from white people, and given to all (white people included), while maintaining that there should be no disruption to agricultural food supply, and no civil war.

“We are not going to disrupt farming. We are going to inherit farming and continue to farm. We want agricultural colleges open. Because the land is coming and it is going to need educated farmers,” he said.

Land reform has again flared up fears in South Africa, after parliament passed a motion to review section 25 of the Constitution, which could start the process of changing the country’s land laws. Both the EFF and the ruling ANC voted in favour of the motion, indicating majority support for the change.

‘Land expropriation without compensation’ is a policy of the state taking land, without giving the current owners any sort of payment for it.

The ANC’s eagerness to adopt the policy, and vote with the radical and populist EFF on the matter, has unsettled investors and economists, helping the rand to reverse some of its early gains in 2018, following the exit of former president Jacob Zuma.

Black South Africans have more to lose

Responding directly to Malema’s speech over the weekend, economist Mike Schussler said that the politician was doing black South Africans a disservice with his rhetoric, pointing to data that indicated that it would be that specific group who are hit hardest by such a policy.

“I have a surprise for Mr Malema: Africans own 7.66 million houses (1st houses only) and whites own 730,000. The other two population groups combined own as many as dwellings as whites. If the state expropriates this land without compensation, then the state will take 10 times more homes from Africans than whites,” he said.

According to Schussler, in total 56% of the value of 1st houses in South Africa belong to black Africans. Only 33% belong to the white population group.

“So nearly double the value will be taken with expropriation without compensation from Africans. Moreover, 22% of black Africans own second homes – far less than 10% of white folk who do.”

“Add RDP and Traditional homes, and one could add R2 trillion to the balance sheets,” Schussler said.

“The sad thing here is that Africans have been very successful in many, many cases of buying houses or getting houses – and Malema actually keeps the notion alive that black South Africans are not successful.”

“Malema has made a big mistake if he thinks black African want to give their homes to the state. He will feel that at the ballot box,” he said.

Land data

Schussler cites the General Household Survey [...]