LAND AS A MEANS TO ERADICATE POVERTY IN SA !!!

One of the reasons that could have led to flared tempers at the recent ANC congress when the matter of land reform was discussed is the frustration at the slow speed at which the ANC government is implementing land reform policy. Land remains a crucial means of production in South Africa. Those who have had land have had the opportunity to create wealth and historically, Black South Africans (meaning Black African, Coloured and Indians) were denied the right and opportunity to create wealth.

Some Historical Background

Since 1913, when the Native Land Act was promulgated and long before the emergence of apartheid, Black South Africans were robbed of their rights to own land. The Native Land Act of 1913 and its variant, the Native Trust and Land Act of 1936 ushered in the policies aimed at disenfranchising Black people. These laws stipulated that Black people would live in special demarcated areas which made up a mere 13% of South Africa’s total land area while the small White population had rights to own land in the remaining 87% of the land that was not owned by the state. These policies, including those which came after them during the apartheid years, specifically the Group Areas Act of 1950 and the enhanced Group Areas Act of 1966 served to entrench racial segregation in South Africa. But even worse, the policies lead to South Africa having one of the highest levels of poverty and one of the highest gini coefficients in the world. Over the decades, Black people became poorer due to lack of access to land while White people used the land as a means to become richer.

To be sure, apartheid was a system aimed at breaking down the psyche and moral of black people and therefore there were a myriad of apartheid laws put in place to systematically disenfranchise Black people. However, the land policies of the apartheid era played a central role in the disenfranchisement process.

The ANC Government

Since coming into power, the ANC government has had the un-enviable task of developing land policies aimed at reversing the damage caused by the pre-apartheid and apartheid land policies mentioned above. In a sense, the ANC faced the same challenges that former British colonies faced after independence regarding land redistribution. Making land available to Black people on a mass scale has the potential to transform the structure of South Africa’s economy and could lead to a narrowing of the gap between the haves and have-nots. However, in order for that to happen, the ANC government needs to develop land policies which strike a balance between being aggressive enough to ensure that change takes place while not being too aggressive to be infringing on the rights of current White land owners.

In my opinion, the current land reform policy, especially that outlined in the Restitution of Land Rights of 1994 does not stroke this balance well enough, as shall be outlined later.

South Africa currently has a land policy strategy which is grounded on the principles of restitution, redistribution and land tenure. Each one of these principles is important however, the one that tends to attract the most attention is restitution. The Restitution of Land Rights Act of 1994 and its amended variant of 2014 outlines various ways in which land which was taken away from Black people through forced removals or where land was bought at below market value rates can be restored to Black people.

Wily, Chapagain and Sharma (2008) argue that successful land reform policies, especially those which focus on land for agricultural use, share a number of characteristics, among them are that such policies tend to: be implemented with great speed, coupled with uncompromising enforcement, leaving no room for landlords to maneuver; provide sufficient support (technical and financial) to enable beneficiaries to be independent and ensure that beneficiaries avoid involuntary sale of their land.

The ANC can do more

While South Africa’s Restitution of Land Rights Act of 1994 contains some elements of the success characteristics which are listed by Wily, Chapagain and Sharma (2008) the Act does not go far enough to ensure proper redress. The one area where I feel the ANC government could  do more, is the criminalisation of acts aimed at undermining the aims of the Act. This however seems to have been addressed in the Restitution of Land Rights Amendedment Act of 2014. The question now is, will the ANC government have the political will to implement with speed and urgency the amended 2014 Act?

Based on past experience, the answer to the question above is that unless ANC government inserts a sense of urgency in the implementation of the land reform policy then the new amended Act will not make a difference in terms of outcomes. Evidence of the lack of will and poor sense of urgency is that government has failed to meet its land restitution targets as set out in the 1994 Act. According to the Restitution of Land Rights Act of 1994, government ought to have restored 30% of commercial aggricultural land to Black people by 2014. By some accounts, as at the writing of this piece, a mere 10% of the land had been either restored to its rightful Black owners or compensated for.

What about Expropriation without Compensation

There a number of reasons that can explain why the ANC government has failed to meet the land restitution targets, chief among these is resistance by White commercial farmers to reforms and ANC government’s own poor enforcement of the Restitution of Land Rights Act of 1994.

To digress, some of the White farmers who resist efforts by the State regarding the transfer of land argue that Black people will not make the land as productive as it has been under White ownership. That may be true and Wily, Chapagain and Sharman advise that governments can address this concern by providing support (technical and financial) to Black beneficiaries to ensure that at a minimum, they maintain the level of productivity of the land as they found it (where productive land is being transferred) or make the land productive, where the transferred land is laying fallow or idle.

Some argue that expropriation without compensation should form part of government policy on land reform and that this would increase the speed of land reform implementation. The problem is that expropriation without compensation would lead to certain rights of White land owners being infringed upon. Some would argue that Whites who own and occupy land which was taken away from Black people, do not have any rights to that land in the first place. My personal opinion is that expropriation without compensation is an option but only under certain circumstance as outlined below. Indeed, expropriation without compensation, under any circumstances has risks.

One of these risks is that of potential flight of foreign capital as investors could see this as an act to remove or limit security of tenure. Criminalising acts which seek to undermine the aims of the land reform policies is a much more powerful approach that government should apply to ensure compliance. However, this needs to be followed up with strict and uncompromising enforcement. One way to enforce criminalisation would be to create a land reform criminal courts (separate or as part of the existing Land Claims Courts) where people who contravene the various land reform laws are tried and if found guilty sentences should be harsh and punishment once, a case has reached the courts, can and should include expropriation without compensation. This way expropriation without compensation is put on the table but as a deterrent rather as a matter of course.

Given the vast land resources that South Africa has at its disposal, we can and we should be able to use land to eradicate poverty and inequality in our society. However, this requires strong political will.

Our Politicians must show political will to create effective government !!!

The ANC Leadership Race !!!

On the eve of the ANC’s election of its leadership, my sense is that both the two leading candidates for the position of president of the organization (NDZ and CR) are deeply flawed individuals and under different circumstances there would far better individuals who could contest the top spot. Whichever individual between the two is elected president of the ANC, the organization is going to face a bruising campaign against other parties leading up to the 2019 general elections because of who will be leading the ANC, assuming that it’s either CR or NDZ. 

Nominations by the ANC branches have shown that CR is a preferred candidate for the role of president. Save for those branches, especially in Mpumalanga where voters either abstained or voted for “Unity”. This means the representatives of these branches which did not vote for anyone at the branch level go into the ANC elective conference with the latitude to vote for any candidate of their choice. This therefore could leave some room for NDZ to potentially close the gap between herself and CR to a point where CR could win in a close race or even be pipped by NDZ. 

Having said so, the biggest shock that could come out of the ANC’s elections is for anyone other than CR to be elected president of the organization. Should that happen, the ANC will find itself saddled with a major, major credibility and trust deficit. But politics being politics, be prepared to be shocked and for the unexpected.

Separate and Un-Equal !!!

There are times when I listen to various radio stations and people call in to make an argument that black people must stop moaning about apartheid, these callers point out that apartheid was abolished in 1991, almost three decades ago and therefore black people must move on and stop blaming everything on apartheid.

The apartheid system came into effect in 1948 when the National Party government lead by H.F. Verwoerd enacted a number of laws which institutionalized the doctrine of separate (black and white people must live in separate areas) and unequal (white people are superior to black people, or put differently, black people are inferior to white people). Over a period of more than four decades, the apartheid system meted out cruel and debilitating treatment on the black people of South Africa.

The goal of the apartheid system was to divide black and white by separating them from each other and use this division as a mechanism to dehumanize black people. The result of the apartheid system was that resources in South Africa were allocated along racial lines. To be sure, apartheid was designed such that there were the beneficiaries, those on the “right side”, the white people and the sufferers, those on the “wrong side”, the black people.

Without fear of contradiction, I believe that apartheid played itself out across a number of dimensions, and it affected both black and white members of the population in equal but opposing measure. My opinion is that there are four dimensions across which apartheid wreaked its havoc on the people of South Arica, namely: political, social, psychological and economic.

Political Dimension

In any free society, citizens exercise their power through the ballot box on how they are governed. During the apartheid years, citizens on the “wrong side” were robbed of the right to vote and were reduced to passive participants who could not express their will or make any demands on the government of the day. Citizens on the “right side” retained their right to vote, remained active participants, able to express their will and voice their demands to the government of the day. For many decades under apartheid, white people voted in great numbers for the election and re-election of the National Party. At each election during the apartheid years, black people waited and hoped that sense would prevail over white voters and that they would vote the National Party out of power. Sadly, it was not through the ballot box that the National Party lost its power, it was largely through the act of one man, F.W. De Klerk. The nobility of De Klerk’s intentions to first, remove a ban on liberation movements and then eventually agreeing to a negotiated settlement with the same liberation movements is an on-going debate. What cannot be argued and debated is that the political impact of apartheid, on both sides, cannot be over-emphasized.

Social Dimension

In any free society, citizens are allowed all manner of rights which we take for-granted today as they are now enshrined in Chapter 2 of South Africa’s Constitution, in the form of a Bill of Rights. During the apartheid years, black people were stripped off many of these rights including but not limited to: the right to move freely in their own country; the right to make choices freely; the right to speak freely without any fear of consequence or punishment and ultimately the right to simply live how they preferred to live. As a result, black South Africans could not define and determine their own destiny while white people enjoyed all the rights under the sun which allowed them to live the lives they wanted to live. One of the brutal instruments of the apartheid system was the “Group Areas Act of 1950” (GAA). The objective of the GAA and its subsequent variations was to separate black people from white people. Under this law, black people could only live in designated areas and their movement outside these designated areas was policed through, among other instruments, the Pass Laws. The most devastating effect of the GAA was the displacement of black families from their homes in order to make way for white residential areas. The separation of the black and white people in South Africa prevented them from either developing a common culture and norms, or gaining a better appreciate of each group’s distinct culture and norms. Therefore, the doctrine of separate and unequal resulted in black and white South Africans at first being physically separated from each other and then over time, this physical separation lead to a psychological separation. A separate and divided South African society was not then and is not now conducive to peace, and prosperity. Therefore, the lasting social impact of apartheid, on both sides, cannot be over-emphasized.

Psychological Dimension

Apartheid had hidden effects, which impacted the psyche of the people of South Africa, driven mainly by this doctrine of separate and unequal. These hidden effects manifested themselves in the form of: mistrust between the two sides and my opinion is that this mistrust persists to this day; perceptions by one group that another was and continues to be superior to the other. Perhaps the most devastating impact of apartheid was that the system emboldened some white people and allowed them to gain confidence if not perhaps arrogance about their position within the South African society. In my view, this arrogance continues to this day.  On the other hand, the apartheid system served to crush the confidence of black people, stripped them of their dignity and ultimately dehumanized them. Some black people resorted to drugs and alcohol abuse as a way to escape the dehumanized state, others tragically took their own lives and others still went into exile in search for a better life in foreign countries. I would argue that the impact of apartheid on the psyche of both sides is long lasting, and it will take a few generations to overcome the effects of the doctrine of separate and unequal.

Economic Dimension

In any free society, and as alluded to above citizens, have certain rights among them is the right to freely engage in activities through which they can create economic value for themselves and their families. In the current South African Constitution this right is defined in the Bill of rights under section 22 of Chapter 2 titled “Freedom to trade, occupation and profession”. Under the apartheid system black people had limited choices regarding economic activities that they could engage in. This meant that their ability to earn a decent living and create wealth was severely limited, if not entirely non-existent. Many black people found themselves working in low-paying, un-skilled jobs with no access to land and other means of production. I would argue that even today, a large part of the black population continues to have limited access to the means of production, except their own labour. During the apartheid years, white people had unlimited access to the means of production: land; capital and some might argue, even black labour itself. As a result, many white people were able to earn a decent living and others still were able to create substantial wealth for themselves and for their future generations. To this day, most of the means of production remain under the control of white people. Today, according to the United Nations Development Programe’s human development report of November 2013, South Africa is one of the most unequal societies in the world with a gini coefficient of 63.1, behind only the Seychelles (the highest) and the Comoros (second highest). Therefore, the lasting economic impact of apartheid, on both sides, cannot be over-emphasized.

My opinion is that South Africa has so far only addressed the political dimension of apartheid, chief among these was to return to all citizens the right to vote. A lot more still needs to be done to address the social, psychological and economic dimensions of apartheid. These three dimensions will not be fully addressed as long as there are those who deny that apartheid continues to impact lives, almost 30 years after its abolition, and it could impact lives for many more years if this denialism continues. Those who argue that black people must stop blaming apartheid and move on, fail to appreciate the impact of apartheid on both the black and white people of South Africa across the above mentioned multiple dimensions.

Just like the National Party enacted specific laws to entrench the doctrine of separate and unequal, the ANC government must enact laws to first, un-do the doctrine of separate and unequal and secondly, to create conditions conducive to a united, equal and prosperous South African people.

Our Politicians must show political will to create effective government !!!

Let's not forget sacrifice made for our Freedom !!!

SA Needs Aggressive Economic Growth Plan !!!

SA GDP Growth Rate.

The graphic above shows South Africa’s GDP growth rate over a five-year period between 2011 and 2015 and in my opinion there is something disturbing about the picture that emerges.

First, what is disturbing about the picture regarding South Africa’s GDP growth is that the magnitude of the rate of growth has been historically small with the highest rate being 3,3% in 2011. Secondly, what is disturbing about South Africa’s GDP growth rate is that the rate of growth has actually been declining. Both these factors point towards an economy that is performing very poorly and further evidence of South Africa’s poor GDP performance is the historically high unemployment rate. According to StatsSA, South Africa’s unemployment rate as at the third quarter of 2016, was at 27,1%. Compare this to an unemployment rate of 4% for China, 5.6% for Russia, 9% for Brazil and 8.4% for India for year 2015, this is according to the CIA World Fact Book.

In its statement to commemorate the 105-year anniversary of its founding, the African National Congress (ANC), South Africa’s ruling party, projects that South Africa’s GDP will grow by 2,9% in 2017. In my opinion, a developing country like South Africa should be growing consistently at a rate of at least 5% on an annual basis and the 2.9% projected by the ANC indicates just how dire the South African economic situation is. In order achieve a higher rate of economic growth of at least 5%, the ANC government needs to implement a very imaginative and ambitious long-term economic growth plan. Indeed, there is nothing wrong with the details contained in the National Development Plan (NDP), what is required is an aggressive execution of the NDP in order to ensure that economic growth comes soon rather than later.

Antonio Fatas and Ilian Mihov (2009) argue that there are four key mechanisms which governments can employ in order to drive economic growth and they refer to these as the 4I’s of economic growth. The first I is for Innovation, the second I is for Initial Conditions, third is for Investment and the fourth and last I is for Institutions. This article will focus on Investment.

INVESTMENT AS A MEANS TO DRIVE ECONOMIC GROWTH 

Fatas and Mihov argue that countries which experience high economic growth - as expressed by GDP growth rate - tend to invest an equivalent of 25% or more of their GDP. The scholars indicate that investment comes in many forms and includes investment in new technology (in order to increase a country’s overall productivity), investment in human capital (specifically to produce a highly skilled labour force that will produce high-value products or services products) and investment in fixed infrastructure (to enable economic activity). Fatas and Mihov point out that a country like China, which has been consistently growing at a rate higher than 5% per annum over the past few decades, has been investing an equivalent of 40% of its GDP in fixed infrastructure over the past few decades. According to the CIA Fact Book, China’s investment in fixed infrastructure in 2015 was estimated at 

Fixed Capital Investment: BRICS Comparison

43.4% of GDP. The Graph above shows a comparison of fixed capital investment as a percentage of GDP for the BRICS countries. South Africa has the second lowest investment figure, just head of Brazil but behind India and Russia with China significantly ahead of all the BRICS countries. The ANC government certainly needs to invest more in fixed infrastructure if South Africa’s economy is to grow at a higher rate than has been the case on the recent years and below is a discussion of some of the areas in which investment could be made.

Transportation Infrastructure

According to the CIA World Fact Book, South Africa has total road network  of approximately 747,000 kilometers, yet only 21% of this is paved this means there are 588,000 kilometers of unpaved (gravel) roads across the whole country. The ANC government should therefore invest in the paving of more of South Africa’s roads in order to improve the movement of people, goods and different forms of cargo. Furthermore, the ANC government should invest in converting more of our national highways into dual carriage ways in a single direction, especially along busy routes to help separate passenger vehicles traffic from heavy vehicles which carry goods and other forms of cargo.

Renewable Energy Infrastructure

South Africa is blessed with sunshine all year round and according to the national Departmentof Energy, the country experiences 220 Watts per square meter of solar radiation every 24 hours on an annual basis. This compares to 150 Watts per square meter for the USA and 100 Watts per square meter for parts of Europe. In my opinion, South Africa’s government ought to be investing more in infrastructure aimed at harnessing this abundant solar energy to generate power for some parts of the country, especially the small towns that are scattered across the country. The ANC government must however be commended for facilitating the building of wind farms in parts of the Eastern and West Capes, but more wind generation capacity needs to be installed in order to reduce dependence of energy generated from coal-powered stations.

Water Infrastructure

South Africa has many dams of different sizes and some of these are nearing their end of life, such as the Vaal Dam which was built in 1939. On the basis of the capacity of water they can hold, the biggest dam of them all in South Africa is the Gariep Dam, which is situated on the border of the Free State and Eastern Cape Provinces. The Gareip Dam has a capacity of 5,3 million mega litres, this is almost double the capacity of the Vaal Dam which is 2,6 million mega litres. Compare this to the capacity of the world’s largest hydro electricity dam, the Three Gorges Dam in China, which has a capacity of 39.9 million mega litres. The Gariep Dam plays two key roles, the first being to serve as a reservoir of water and the second being to generate hydro electricity by harnessing the power of the very water that is stored in the dam. The Gariep Dam is therefore a very strategic asset for South Africa. This dam was commissioned in 1971 which makes it almost 46 years old. Given that the lifespan of a dam can vary between 50 and 100 years, the Gariep Dam is either almost at the end of its lifespan or is half-way there. Regardless of whether the Gariep Dam has a lifespan of 50 or 100 years, it is quiet obvious that South Africa needs to urgently work on a plan to either revitalise the Gariep Dam and thereby extend its lifespan or build another strategic dam with the same functions and capacity as the Gariep Dam, if not better the Gariep Dam. As South Africa’s population continues to grow demand for water and electricity is going to continue to increase and in my opinion government needs to keep the supply of both water and electricity far ahead of current and future expected demand.

Investment in infrastructure tends to have an immediate benefit of creating direct jobs when the infrastructure is being put in place and then once the infrastructure is in place the benefits to the economy tend to be much broader and are sustained over long periods of time. Investment infrastructure is therefore a critical element in speeding up the rate of South Africa’s economic growth.

Our Politicians must show willingness to create effective government