Stephan Hofstatter, Business Day, 26 March 2010, reports Land Reform Minister Gugile Nkwinti has promised to implement unprecedented reforms to land ownership rules which the government hopes will reverse apartheids legacy that left most wealth and property concentrated in the hands of a white minority.
According to Hofstatter, the Department of Land Reforms green paper, which will be submitted to Cabinet next month, will propose a three-tier system that allows for limited freehold tenure for private property, the leasing of state land, and the placing of strict conditions on foreign ownership of land in SA.
Firstly, any degradation of private property rights in SA will directly affect the growth potential in SA and is likely to cause millions of South Africans to leave SA because there would be no economic incentive for them to stay if their land is constantly under threat. Secondly, the government should not be leasing state land to its targeted beneficiaries. Why not simply give full property rights to black individuals occupying state land surely this is the best and most politically palatable way to deal with the atrocities created by apartheid legislation? Thirdly, like any foreign investment, SA should be encouraging foreign ownership of land, which brings much-needed investment that can be used to fund other areas of development in SA and make up for our low domestic savings.
Jasson Urbach is an economist at the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author's and are not necessarily shared by the members of the Foundation.
For text: http://www.businessday.co.za/articles/Content.aspx?id=104697
FMF Policy Bulletin / 30 March 2010