Land Reform in South Africa: How Can the U.S. Respond?

The riots that broke out across South Africa in July, 2021, leaving nearly 350 people dead, marked the worst violence in the country since the end of apartheid in 1994. The immediate trigger of the unrest — former President Jacob Zuma's jailing for contempt of court amid sprawling corruption charges — belied a much deeper cause fueling the violence: inequality and a lack of opportunity for black South Africans. Though dubbed the "rainbow nation," the legacy of apartheid in South Africa remains strong, with whites still possessing vastly disproportionate economic influence. As recently as 2016, more than 90 percent of wealth in South Africa was controlled by 10 percent of the population — who were mostly white.

At the root of this inequality is the issue of land. With one-third of its citizens still living in rural areas, South Africa's land distribution is one of the most prominent examples of apartheid's legacy today. Though agricultural land makes up nearly 80 percent of South Africa's total area, blacks — who make up three-fourths of the population — control just 4 percent of individually-owned farmland, while whites — who comprise just 9 percent — own 72 percent of land.

In the years since apartheid ended, South Africa's efforts to rectify land inequality have had limited results. Between 1994 and 2019, just 8 percent of white-owned farmland was redistributed to black citizens. Discontent over lingering inequality has made land reform a hot-button issue in South African politics, and has helped fuel the rise of the Economic Freedom Fighters (EFF), a left-wing party that advocates uncompensated seizures of white-owned land.

In response to growing pressure, the ruling African National Congress (ANC) has taken steps to allow a faster pace of redistribution. In 2017, President Jacob Zuma signed a bill allowing the government to expropriate land and pay owners the valuation determined by an adjudicator, a departure from the "willing seller" basis by which land was historically redistributed since 1994.

Even more drastic steps are on the horizon. A constitutional amendment introduced in 2018, and expected to pass in the near future, would allow expropriation without compensation (EWC), a key EFF demand.

A more equitable distribution of land in South Africa is surely warranted, but the reform currently being proposed is unlikely to produce a successful outcome. This reform lacks vision due to concerns related to uncompensated land seizures that have already taken a significant economic toll. In the third quarter of 2018, after the ANC voted to support EWC, capital investment in South Africa fell to its lowest level since 2010. For 2018, South Africa's economy defied rosy predictions and grew by less than one percent, dispelling expectations of a "Ramaphoria dividend" after the inauguration of business-friendly Cyril Ramaphosa as president. Should the EWC amendment become law, South Africa's economy, already ravaged by COVID-19, will likely take an even bigger hit.

On a more substantive level, the EWC proposal contains significant flaws that will prevent it from delivering the full benefits of land redistribution to black South Africans. First, the proposed amendment would only offer leases on expropriated land, which would remain in the hands of the state. This marks a shift from the past, when land recipients were offered freehold tenure. Without titles to their land, black farmers will be unable to acquire mortgages and loans or buy seeds, tools, and equipment to grow their enterprises. Social mobility will also be limited, as farmers will be unable to sell their property and move to other areas in search of greater opportunities.

Land reform in South Africa is also chronically underfunded, a reality unlikely to change even if EWC is approved by parliament. Meeting the government's target of redistributing 20 percent of agricultural land is projected to cost 5 billion rand, but only 4 billion has been currently allocated. For perspective, the South African government spends more each year on security for VIPS than on land reform.

EWC would of course be much less costly than if the government had to pay white landowners the full value of their property. However, since the amendment stipulates that only unused land can be expropriated without compensation, the government will likely still need to purchase more via traditional means. Acquiring enough land to meet its redistribution target, as well as providing training and funding to black farmers — which few currently receive — will require more funding than the government currently provides.

There is also the risk that EWC, if approved and implemented, will be marred by the sort of corruption and mismanagement that characterizes many of the South African government's endeavors, like its housing program and COVID-19 assistance efforts. In a worst-case scenario, some have suggested that EWC will make South Africa the next Venezuela or Zimbabwe. While such comparisons may be extreme, there is reason to be concerned that South Africa's land reform efforts will do more harm than good.

As a trading partner, and a major importer of South African agricultural goods, the United States has an interest in ensuring that South Africa undergoes land reform in a just and prudent manner that increases investment and productivity rather than reduces it As a major beneficiary of duty-free export trade to the United States under the African Growth and Opportunity Act (AGOA), especially in the automobile, wine, and fruit sectors, South Africa would have a strong incentive to respond to U.S. pressure on the issue of land reform. Should Washington decide to act on the issue, one route it might take is tying trade privileges and foreign assistance to rule of law benchmarks, with the goal of ensuring that South Africa's EWC, if passed, is implemented within the strict confines of its intended mandate (unused land) and is not abused by corrupt interests.

The United States might also offer positive incentives, like funding for training, loans, and grants for resettled black farmers, in exchange for measurable success by South Africa's government in redistributing land in a just and equitable fashion. Doing so could help ensure that land reform in South Africa does not come at the cost of the country's agricultural productivity.

The Biden administration has made clear that it plans for the United States to renew its role as a global advocate for democracy, human rights, and the rule of law. As South Africa inches toward a risky step in its land reform program, a U.S. policy response could have substantive impacts and implications for the future of American economic and diplomatic engagement with African nations.

John Dashe is a former intern with the Wilson Center Africa Program.

Photo credit: African farmer man holding fresh organic vegetables. Sabrina Bracher/Shutterstock.com