The Expropriation Act’s miracle “benefits” debunked – Terence Corrigan

Key topics.Government claims the Act will boost infrastructure and economic growth.Concerns over state discretion and potential negative investment impact.Scepticism about the Act's real ability to drive empowerment and job creation..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Terence Corrigan*."How can South Africans benefit from the Expropriation Act?" That's the bold (implied) question on a graphic that came across my Facebook feed. With big white letters emblazoned on an orange background, it really stood out. Quite a find during a late-night doom-scrolling session..As you can see, the actual wording forms a statement rather than a question … but, since I have spent a lot of time protesting about this law, I was intrigued as to how it would – in fact – benefit me..Apparently, I've had the Act all wrong. It will give us "fair and transparent expropriation processes". It will provide for "land reform and equitable ownership". It will enable "improved public infrastructure (roads, schools, housing)". Not too shabby, if I may say so..But wait, there's more! It will drive "economic growth and job creation". Because of this law, South Africa can look forward to "enhanced food security and rural development", "affordable housing and reduced overcrowding", "support for public interest projects (water, conservation, empowerment)", and "increased economic participation for marginalised groups"..Read more: Deputy Trade Minister Andrew Whitfield: AGOA renewal, slashing red tape and SA's economic revival.Okay, folks. Ignore what I've been saying. This isn't a threat to South Africa's economic future; it's a roadmap to that future. I mean, this is the law that's not only going to define expropriation procedures, but will resolve the infrastructural backlogs, accelerate growth, put those millions of unemployed to work, make sure there's food on the table, sort out our urban rot, and bring cosmic justice to South Africa..Now I had thought that this law was fundamentally about how the government gets to take your stuff. In fact, I've read it. It's not exactly Treasure Island in its eloquence and excitement, but that's the message I get from it. Try as I might, I can't find the clauses that tell me how the Expropriation Act will provide that bounteous food security, or shift gear on economic growth. I mean, I'm enthused that it will – we've been sitting in the 1% zone, with investment levels south of 20%, for years. But they're not immediately apparent..Perhaps there's a secret codicil somewhere. You know, like in that episode of The West Wing where Josh Lyman puts his foot in his mouth about the administration's secret plan to fight inflation. (Maybe we could look for the secret plan to expropriate our way to paradise in the same place where we store the Lady R report, those Arms Deal documents that the Seriti Commission declined to examine, or the minutes of the ANC's cadre deployment meeting during the height of state capture when it was coincidentally chaired by President Ramaphosa.).Speaking of things American and White House-esque; as far as I can gather, the official response from our government – the one that will be using this Act to effect the abovementioned miracles – to the brickbats we're receiving is to go over there and "explain". I saw our esteemed foreign minister doing an interview with a German outlet (told a big porkie too, that whites own 80% of South Africa's land, but I digress), and his whole line was just how humdrum and ordinary this law was. All countries have it. Nothing to see here, folks..This is odd when matched against the promises it's making. It seems to me that if this really is the Virodene of South Africa's stricken economy, you'd want to play that up, not down. You'd want to bestride the world telling people that this is how you too can get that breakneck growth you're after..All you need, it seems, is a law that limits the definition of expropriation, and expand the discretion of the government to take property (note, this is about all property – land, houses, shares, your Hustler DVD collection) and you're on your way. Taking people's stuff is the sure-fire speedway to success. You don't want to play this down; you want to broadcast it. Not just locally, but internationally..Read more: SA's BEE Policies: Temporary measures turned permanent failures – Daniël Eloff.You'd also want to explain how taking people's stuff through this Act works the magic. Think about it this way. The government takes a farm, or a game ranch, or a parking lot in Vereeniging. Do we then see, as a consequence, GDP growth lifting to 1.5%? Take wine farms in Stellenbosch and private hospitals in Sandton, and we can push it to 3%? What gets us to 5% − seizing the contents of Liquor City and redistributing them to "the people"? (Mind you, do that last one, and for a good 48 hours, no one will care….).Or perhaps those farms, ranches, parking lots and private hospitals (and Liquor City's stock) contribute to whatever growth we have, because they are managed and operated competently. The state is possibly (putting my neck on the block here…) not ideally placed to ensure that they do better and will get the growth-rate climbing..In fact – and again, I'm risking controversy and my very reputation – using the Act to grab farms, etc. might actually have a negative consequence. It might suggest that investments are not in fact secure and that a government (maybe even one with a less-than-perfect approach to public morality, who knows?) might seize them..Personally, I think we can be sceptical about the inherent probity of the South African state. Not quite sure how to justify this… it's just, you know, a feeling. Or maybe just what I see while doom-scrolling. Or what I read on just about any platform. Or what I read in reports by the Zondo Commission, the auditor general and so on. Have a look at those reports. They tell you a lot..I see too that the Expropriation Act promises us "empowerment". Would that be the sort of "Empowerment" preceded in government parlance by "Broad-Based Black Economic"? How's that working out for us? I presume that just as the Expropriation Act gives the government longer fingers to reach into your stuff, the idea is that it will give "empowerment" a bigger footprint – now there's an image! – on the economy. What could possibly go wrong?.Meanwhile, I repeat that I can't find anything in this law that tells us about how the Act will bring about larger capital flows, open the doors of factories and retailers to new employees, provide new farmers with the credit and guidance they need, sort out South Africa's logistics nightmares (that whack all businesses in the groin), or disentangle the mess that is our misgoverned cities..Read also:.Imagine the Western Cape with federalism: Prosperity through autonomy – Woode-SmithGodongwana's budget trade-off: Holding onto SOEs vs. economic prosperity – KatzenellenbogenSouth Africa's ambitious path to prosperity: How to achieve economic growth – Terrence Corrigan.This article was first published by the Daily Friend and is republished with permission.Terence Corrigan* is the Project Manager at the Institute, where he specialises in work on property rights, as well as land and mining policy.

The Expropriation Act’s miracle “benefits” debunked – Terence Corrigan

Related Stories

"BEE pits black against white": The trailblazer who says empowerment got it wrong — Sam Montši

How Leon Kluge, SA’s unofficial ambassador for Cape flora, struck gold at Chelsea for the third time

Trump's US health aid overhaul meets reality in Mozambique

Viv Vermaak: Phala Phala, games of steal and plunder