Land reform is bedevilled by tenacious myths starting with the widely held view, especially amongst blacks, that it has failed.
Myth 1: Land reform revolves around restitution or redistribution of rural land
One of the most basic manifestations of progress is urbanisation, to the point, in advanced societies, where less than 5% of the population is in agriculture. Urbanisation is not only inevitable, but also highly desirable, resulting as it does in a reduced cost of housing and an increase in social and physical infrastructure, transport, and access to resources. Settlements in rural areas transform rapidly into towns and should no longer be considered rural. South Africas rural areas already have fully-fledged municipalities with all the trappings of urban life. Land reform should be concerned with access to land and housing in urban areas and the mindset that it is about rural land should be abandoned.
Myth 2: Access to land is an important component of black advancement and liberation
Most people in advanced countries do not own land, but live as tenants on someone elses land. Many of the wealthiest people in the world live in apartment blocks as tenants or sectional title owners. If South Africa is serious about wanting economic development, it should aspire to having land used efficiently rather than remaining obsessed with who owns parcels of land in townships.
Myth 3: Land reform entails redistributing land from whites to blacks
Restitution is not always clearly understood, especially by whites who assume that it amounts to a Mugabe-like threat to their property rights. On the contrary, restitution is about respecting and upholding property rights. Blacks have a heavy burden of proof that they owned land and that it was misappropriated under apartheid. They are subject to an arbitrary and, in my view, unjust cut-off date of 1913. In addition, once they discharge the burden of proof, they seldom get restitution and more commonly, get offered alternative land or compensation.
Redistribution has acquired the erroneous meaning of rural land being purchased from whites and redistributed to blacks when their restitution claim is rejected. This concept of restitution and redistribution is prohibitively costly, time-consuming and conflict provoking. By far the bigger and best prospect for land redistribution is from government. Government is the primary owner of land in historically black areas (homelands, townships, squatter settlements): land that can be immediately redistributed to existing occupiers at virtually no cost. Estimates of the number of parcels of land vary widely but it appears to be somewhere between 5- and 15-million. In other words, redistribution from government, at virtually zero cost, could result in millions of black land owners with billions of rands of capital released into the hands of existing occupiers and unleashed into the economy where it can be traded, mortgaged, let and developed.
The second form of land that can be redistributed, is superfluous land owned by the government in one of its many forms. No one has any idea how much superfluous government land there is or even what proportion of land belongs to the government. Existing estimates are profoundly flawed in two senses. Firstly, there is an obsession with area rather than value. What matters is not how much blacks own as a proportion of South Africas land area, but what they own as a proportion of land value (the high-value land obviously being urban). Secondly, a fundamental flaw in existing estimates is that organs of state owning land have been too narrowly defined; for example, municipal land is defined as private.
Thirdly, there is the mysterious and unquantified reserved government land. For more than a century developers have been required to reserve parcels of land for government purposes: parks, telephone exchanges, police stations, schools, post offices, transformers and so on. An investigation by the Department of Works some time ago revealed that it was in possession of vast quantities of land, some in rural areas, defined as depots, which were originally for road maintenance crews no longer in existence. The Department of Agriculture has similar land called outspans; originally where farmers could rest and graze livestock being driven to distant markets. Such depots and outspans are misleadingly reflected in the deeds registry as belonging to private owners.
Myth 4: The success or failure of low-income housing policy is measured by the number of RDP houses provided by the government
When the government publishes statistics on progress, it mentions only RDP housing supplied by government and does not include what is probably much more significant, ie, housing and land acquired by black people themselves. The truth is that the post-apartheid, deregulated market has supplied a substantial proportion of low-income housing. Paradoxically, the policy of allowing easier private property development and house construction was introduced by the late-Secretary of the Communist Party, then-Minister of Housing, Joe Slovo. His policy of privatisation and deregulation has been an extraordinary and largely unappreciated success.
Myth 5: Delivery is what the government gives blacks
My housekeeper, Gladys, complains that the government is not delivering. I pointed out that she is the proud owner of a house in Ivory Park. She said: Yes, but I bought and built it myself. In her mind, government does not deliver by creating an environment in which black South Africans become land and home owners and enjoy other benefits by their own efforts through a liberated market, but only when it literally gives blacks benefits largely at the expense of whites. Perversely, the government seems to share this view (see Myth 4).
Myth 6: Blacks dont have land; under apartheid blacks had only 13% of the land
When I was an anti-apartheid activist, I regarded the cliché that blacks had only 13% of the land as an objective truth and assumed, like everyone else, that it was based on some incontestable fact with a dependable source. This myth lives on and I now realise that it is and always was nonsense. Firstly, the so-called 13% was the land held by homeland governments. This land did not in any meaningful sense belong to black South Africans, but to the apartheid regime. That 13% is for practical purposes still not owned by blacks, but by the apartheid regimes successor. Secondly, the land concerned was 13% by area and a great deal less by value. By far the most valuable historically black land was and remains urban. There has never, to my knowledge, been a reliable estimate of either the area or value of such land. Thirdly, homeland land included consolidation land, which comprised large tracts of land bought and expropriated from white farmers by the apartheid regime and never transferred to homeland governments.
Myth 7: Freehold title is a Euro-centric, cultural idea not shared by Africans
Needless to say this view is racist in the extreme. Traditional southern African land tenure systems had private ownership as an integral part of tribal law. So-called communal land existed only in the commonage used primarily for grazing. Even there, access was highly privatised, protected and valued, usually by way of grazing right quotas allocated by the chief-in-council or headman-in-council. All other land residential, kraals, bomas, arable allotments, trading sites, light industry was privately allotted in perpetuity. Subject to significant variations from one tribe or village to another, land could be traded and inherited. In some tribal systems, extra voting rights were granted to land owners. The removal and corruption of traditional land ownership systems is a legacy of colonialism. Under apartheid, control over land was centralised in the hands of chiefs as a means of subjugating blacks. In all pre-industrial, primitive societies, there were forms of land tenure and allocation that were communal in some contexts and private in others. All modern, prosperous societies, regardless of history, culture or race, convert traditional tenure into modern tradable ownership. Any suggestion that black South Africans should not enjoy such progress is not just racist, but counter-revolutionary and retrograde.
Myth 8: The proportion of land held by whites, blacks, government, etc, is inappropriately measured by area
To the limited and inaccurate extent that estimates have been made of the proportion of land held by black South Africans, it refers to land by area rather than by purpose or value both of which are more important. It is also presumed that land owned by private business is white. A more honest and realistic assessment would start by regarding land held by government as held indirectly by or on behalf of black South Africans in that they constitute the majority of voters in a democracy. Land held by companies should either be regarded as non-racial or, for those who are obsessed with race, according to the proportion of beneficial owners of different races. Beneficial owners of most listed companies, by value, are increasingly black through institutional investment on behalf of trade unions, medical schemes, unemployment funds, policy holders, depositors in banks and the like. In some of these areas the rapid growth of black participation has passed 50%.
Myth 9: That land reform and land restitution has restored land or redistributed land to black South Africans
The myth was exposed when the Minister of Land Affairs recently announced the intention to repossess land not being used to the governments satisfaction. What this exposes is the fact that black South Africans in post-apartheid South Africa are still being treated as inferior and being given inferior title. One of the reasons they are not using the land to the satisfaction of government and critics is that they are not free to dispose of it. If black South Africans had the title they should have in a truly non-racial post-apartheid South Africa, they would be free to sell the land to people who would pay good prices for it because they attach or can extract higher value. The legacy of apartheid lives on in that even the post-apartheid regime has not fully embraced treating black South Africans the way people are treated in historically white areas.
Having exposed and disposed of these myths, the proverbial bottom line is that all land lawfully or permanently held by black South Africans in predominantly black areas, should firstly, be summarily converted to full, unambiguous, freely tradable ownership at zero cost to beneficiaries. Secondly, the law should be amended to allow private owners with informal settlements on their land, to convert that land through private contracts with occupiers, with nominal red tape and cost, to full, unambiguous, freely tradable ownership. Thirdly, a small proportion of superfluous government land will be sufficient to provide all landless and homeless South Africans with a free residential plot of urban land or a viable portion of agricultural land and full, unambiguous, freely tradable ownership. This should be done immediately and excuses and obfuscation should be dismissed. Finally, community, traditional and tribal land should be unambiguously and democratically owned and controlled by the people concerned, who should be empowered, as envisaged in the Communal Land Rights Act, to convert the land of each lawful occupant, if they wish, to full, unambiguous, freely tradable ownership.
FMF Policy Bulletin / 23 June 2009
Leon Louw is the President of the Free Market Foundation.
Publish date: 03 July 2009
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.