Back on the 22nd May this year President Trump Questioned SA's president Cyril Ramaphosa over many key things with one of them being land expropriation. This was passed into law by the SA parliament and allows the government to seize privately owned land with no compensation in other words for free with no payment. Last week it was revealed that a piece of land has been seized by the government and now this land theft is going to court next year February and depending on the outcome this will possibly lead the way for the floodgates to open.
Ramaphosa insisted when being grilled by Trump this land expropriation was not happening and assured him like everything else being questioned was not true. This happening is seriously bad news for everyone in SA as this is going to tank the currency. It actually does not matter that this case is going to court as the intentions have been made clear and the action has been done. The SA tariff delegation that was in the US last week is wasting their time as clearly the SA government is not being serious and their actions prove they will not listen to anyone. Tariffs are expected to remain and most likely increase after these actions.
This will not boost confidence for investors knowing the government can blatantly lie on the world stage as this was only 4 months ago so he was very aware this was on the cards. Ramaphosa and the rest of the government sees this as the first step to transformation and land reform. The ANC government is losing control of the country having failed to win a majority at the last election so by doing this they are hoping to win back voters by giving the people land even if it is stolen.
Ramaphosa was in Zimbabwe last month attending the annual agricultural show as a guest of honor and he praised Zimbabwe's land reform. The land reform that stole productive farms from farmers is what decimated the economy turning Africa's bread basket into a country that could no longer feed the people let alone export produce.
36% of all land is in government or tribal control already and 41% owned by companies which have shareholders. This leaves 23% of the land which a large portion will be housing which is made up of over 5 million properties having active mortgages.
South Africa has over 40 000 commercial farms with another 242 000 subsistence farmers who barely grow enough for their own needs. Why anyone would think it is a good idea to break up an existing prosperous farm to create hundreds of smaller farms who do not supply food for the country has to be insane. This is exactly what happened with Zimbabwe and why they have to import maize and other basic food items.
I would guess this first piece of land being expropriated is more of a political tool right now being used by a desperate government trying to cling on to some control. The effects will be felt country wide however as it sends the message your land is not your land even if you have paid for it. Investors will walk away as the risk is just too high not knowing which political party will be taking power next. This is not about now, but more about the future and what that holds as there is definitely some uncertainty. O personally own two properties here and thankfully I do not see my future here and will be at some time upping sticks and moving.
