Letter: Policy rethink required on South Africa land reform - Financial Times, London

26 April 2018 - Sam Wycherley’s letter (“South Africa’s dilemma over land reform”, April 20) falls into the common trap of seeing the process in terms of racial redistribution. Recognising the inevitable blowback of a policy of expropriation without compensation, Wycherley posits the use of heavy inheritance taxes. This would ‘hit whites’ and force land out of their hands.

 

Sam Wycherley’s letter (“South Africa’s dilemma over land reform”, April 20) falls into the common trap of seeing the process in terms of racial redistribution. Recognising the inevitable blowback of a policy of expropriation without compensation, Wycherley posits the use of heavy inheritance taxes. This would ‘hit whites’ and force land out of their hands.

This misunderstands what has gone wrong with land reform in South Africa. An in-depth investigation commissioned by parliament and conducted by a panel under former President Kgalema Motlanthe argued that compensation was not a major issue.

Rather, the difficulties stem from poor project design, a lack of political will (rhetoric to the contrary, land reform has never been seen as a priority), administrative deficiencies, insufficient post-settlement support and outright corruption. In addition, policy changes over the past decade sought ‘redistribution’ from existing landowners to the state.

Beneficiaries of many land reform initiatives are to be granted user rights and leases, not ownership.

Virtually nothing has been done to grant title to the millions of black South Africans living on communal and state-owned land. These problems reflect choices made by the country’s policy makers. And they are depriving a vast number of South Africans of the chance to own property and to use it to participate in the wider economy.

Using inheritance taxes to force redistribution would only compound this. It would hit black property holders hard too, dealing a blow to their prospects of building intergenerational wealth.

Land reform needs a thorough rethink. Properly conceived, it could make a genuine contribution to South Africa’s economy and its future. To do this, it needs policies that incentivise wealth creation. Neither expropriation without compensation nor steep taxes are likely to do much to achieve this.

Terence Corrigan Project Manager, Institute of Race Relations, Johannesburg, South Africa

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