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BLOG May 31, 2018

South African land redistribution

Contributor Image
Martin Roberts

Principal Analyst, Deputy Head - Sub-Saharan Africa Country Risk, S&P Global Market Intelligence

The prospects of the South African government calling an early general election to capitalize on President Cyril Ramaphosa's popularity are receding due to factionalism in the ruling African National Congress and a change of policy direction on land expropriation.

  • The South African government is now moving towards a programme of major land redistribution under existing regulations, which will need time to show its effectiveness
  • The ANC is struggling to resolve leadership battles in key provinces, as allies of former president Jacob Zuma resist removal.
  • Delaying the general election raises the risk that Zuma allies will organize more concerted resistance, endangering the chances of the ANC winning an outright majority and being able to implement its policy program.

Cyril Ramaphosa will mark his first 100 days in office as South African president tomorrow (25 May) with the satisfaction of having made an impressive start, but also with the probable realization that his scope to capitalize on his initial popularity by calling early elections is now declining. Initial euphoria was generated among many supporters of the African National Congress (ANC), the domestic business community, and foreign investors simply by the removal of Jacob Zuma as president. This was then reinforced by decisive Ramaphosa actions to improve governance and tackle corruption and mismanagement of failing state-owned enterprises. More recently, however, Ramaphosa has been sidetracked by two ongoing issues that make early polls unlikely and frustrate policy direction - the debate over land expropriation without compensation, and institutional resistance from Zuma supporters in the ANC which is frustrating efforts to install new provincial leaderships.

Over the weekend of 18-19 May, the ANC held a land summit in Boksberg, at which the ruling party's National Executive Committee heard inputs from party members and experts studying the issue of land expropriation in an effort to formulate a policy on land reform. The ANC's elective conference in Johannesburg had agreed on 20 December 2017 to seek constitutional change to allow expropriation without compensation. Following the Boksberg conference, however, media reports suggest that the ANC's senior leadership is retreating from the commitment to change Article 25 and wants instead to test the boundaries for land expropriation under current constitutional restrictions, while accelerating redistribution of state-owned land.

Ramaphosa's political position is also worsened by unresolved instability in provinces run by the ANC, three of which have to elect new leadership. Ramaphosa made an early exit from the Commonwealth Heads of Government summit on 20 April to formulate a response to large daily protests in North West province over corruption, lack of public services, and the collapse of the healthcare system under provincial premier Supra Mahumapelo. The ANC has taken over administration of the province, but Ramaphosa's authority has been challenged by Zuma ally Mahumapelo, who initially rejected an order to resign and was backed by his disputed provincial leadership before eventually stepping down yesterday (23 May). In Zuma's home province of KwaZulu Natal (KZN), targeted assassinations of ANC officials from rival camps have become so frequent that Ramaphosa met provincial leaders on 15 May to appeal for an end to political murders. KZN has been without official leadership since 12 September 2017 when the Pietermaritzburg High Court invalidated the results of the elective conference in November 2015, which had installed leadership closely allied to Zuma.

Outlook and implications

Ramaphosa's initial impact as president had been so positive that towards the end of March the NEC even discussed the possibility of supporting a call for early elections. This was dismissed given the chaotic situation in ANC provincial governments and the belief that the Independent Electoral Commission (IEC) would not be ready to administer national polls so soon. The IEC has been engaged since 2016 in verifying and adding residential addresses for 16.4 million voters on the electoral roll, although it now claims it is on track to complete the task by next month's deadline. This means there is no procedural obstacle to bringing forward the election from the scheduled date of May 2019 to the final quarter of this year, but it appears an increasingly unlikely option for Ramaphosa.

If the strategy chosen for land expropriation is to increase the rate of redistribution under current constitutional stipulations, then Ramaphosa and his allies in the ANC will need enough time to show this can done sufficiently fast to meet popular demands for immediate action. This is reflected in the almost daily incidence of land invasions, especially on the fringes of urban areas and in Gauteng province. The ANC has officially condemned such illegal occupations, and squatters are usually forcibly evicted; however, in order to avoid losing political support to the opposition Economic Freedom Fighters party, which open advocates land expropriation without compensation, the ANC has to show quickly that it can effect radical change.

The issue of the dysfunctional provincial leaderships is complicated by resistance from senior figures allied to Zuma, many of whom fear the loss of access to political patronage - especially benefits associated with allocation of lucrative provincial contracts - and possible corruption investigations. The biggest problem for Ramaphosa is KZN, where Zuma is playing a key role in orchestrating opposition as a possible bargaining chip to resist being implicated in further federal investigations into his role in state-capture allegations.

A key indicator for an early election is whether Zuma, who has been addressing ANC rallies on a regular basis, looks likely to form a breakaway party in KZN in alliance with the Black Land First organization, as his allies have threatened. Calling an early election would give this group little time to build momentum in the key province that could cost the ANC an overall majority, although the scale of political assassinations is already doing major damage to the party's reputation. Indications that the ANC favors swift redistribution of state-owned land makes it more likely the election will remain scheduled for 2019, thus giving Ramaphosa time to show major agricultural producers and foreign investors that widespread expropriation is not being planned, while reassuring them that those measures taken do not represent a possible prelude to more aggressive local-content and wealth-redistribution policies in other sectors, such as mining and banking.

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