Looking at the past and future when dealing with South Africa’s expropriation laws

The history of South Africa, the “Rainbow Nation,” a term used to represent its ethnic diversity, has been a painful memory for many people. From 1948 through 1991, South Africa’s white-minority government disenfranchised and denied political rights to non-whites and segregated people on the basis of skin color, barring non-whites, including Indian and racially mixed minorities and its black majority, from accessing cinemas, beaches, and other luxury facilities. This system of racial oppression was called apartheid (Afrikaans for “apartness”) and installed a legal framework for non-whites to experience inferior facilities, education, and living standards relative to whites. The government extensively banned Black people from living in cities (black people were not considered citizens of South Africa) and confined them to “Bantustans,” inferior rural areas, deprived of opportunities for economic advancement. The government argued that these areas were the  “native homeland” of the nation’s Black population and recognized them formally as foreign countries; however, the rest of the world did not recognize these colonial dependencies as sovereign states. The Bantustans often lay near natural resources, so white-managed companies and the South African government utilized Black labor to harvest those resources, perpetuating extreme inequality between these two groups. 

It was three years after Apartheid ended in 1991 that South Africa’s first multiracial elections were held, installing Nelson Mandela, head of the African National Congress (ANC), and the nation’s first black leader, as president. The ANC remains the largest party in South Africa and has managed to form a majority government during every general election; in 2024, however, the ANC failed to win a majority of seats in parliament, forcing the party to form a coalition alongside groups including South Africa’s centrist Democratic Alliance and the conservative Inkatha Freedom Party. However, the scars of apartheid remain: to this day, the country is the most unequal in global wealth distribution based on the Gini scale. 

Expropriation Law

As an attempt to address domestic inequality levels, ANC President Cyril Ramaphosa and the South African Parliament recently passed the Expropriation Act of 2024.  The act enables the government to seize land without compensation, in cases when it is “just and equitable and in the public’s interest when the land is not being developed or used to generate income, and when the government can benefit from the appreciation of market value”. This act has proved controversial for several reasons. First, the majority of land in South Africa remains under the ownership of the white minority, who have been the farmers and provide South Africa with its food supply. Additionally, previous expropriation measures by countries such as Zimbabwe have led to massive food insecurity and hyperinflation. South Africa also faces blaring corruption issues—in 2024,  a local investigation uncovered seven billion dollars worth of corruption at state-owned companies. Accordingly, leaders like U.S. President Donald Trump have condemned the new Expropriation law and cut all foreign aid to South Africa, primarily arguing that the law is being used to seize Afrikaaner land and is a form of racial discrimination. 

One may argue that previous neoliberal reforms in South Africa have failed to diminish the endemic inequality and poverty inherited from the apartheid era, and so a more fair distribution of land may prove necessary to overcome them. One must also keep in mind that South Africa is a nation that boasts an unemployment rate of 32 percent and a minimum wage equivalent to one dollar and sixty cents. However, an examination of previous laws imposed by other African nations reveals the perils inherent to the practice of expropriating land without compensation. The most famous case is that of Zimbabwe’s Robert Mugabe regime, in which the government seized 23 million acres of land, and revoked the property rights of commercial farmers. Those awarded land often lacked agricultural experience, thus leading to a decrease in agricultural output and a shift from commercial to subsistence farming. Zimbabwean food production consequently fell by sixty percent, while 700 hundred domestic companies shut down, export earnings collapsed, and the country suffered from shortages of imported goods, due to Zimbabwe not being able to earn foreign currency. Banks also accumulated massive debt because they used land as collateral for farmers. To meet credit obligations to foreign and domestic investors, the government printed money, leading to the famous Zimbabwean hyperinflation crisis of 2008, in which inflation peaked at 79.8 billion percent. The government of Zimbabwe finally agreed to pay 3.5 billion dollars to farmers whose property had undergone nationalization, but lacked the cash to do so, forcing it to rely on long-term bonds, which would put the country into further debt, which it might not be able to pay off, as well as low investor confidence in the economically unstable country. South Africa would be wise to learn from Zimbabwe’s mistakes and realize that taking away land from the nation’s food producers is not a sound economic policy. 

The law’s potential economic and social shockwaves have also caused South Africa to lose critical US aid. In revoking U.S. overseas assistance, President Trump called the act a form of “unjust racial discrimination.” Critics have conversely noted the connection between the president’s rhetoric and his white South African advisor, Elon Musk, as well as white nationalist groups like Afriforum, the leader of which has claimed that apartheid wasn’t a “crime against humanity.” Nonetheless, aid cuts are significant based on the fact that U.S. Foreign Assistance sends 440 million dollars annually to South Africa, which is primarily funneled toward critical social and healthcare initiatives. These measures will lead to the end of many domestic HIV projects, a grave concern because South Africa has one of the highest rates of AIDS on earth.  The government will have to act pragmatically as it manages Trump's rhetoric and seeks out a new aid partner that supports its expropriation plans, or that can push the government to abandon its ambitions.

Conclusion

South Africa will have to balance implementing the immensely controversial Expropriation Bill, managing ensuing economic shocks, and securing a new funding pool used to support ever-critical social needs. Faced with the echoes of the past and warnings from its future, the country may be better off forgoing the bill entirely. Alternatively, the government could invest in education for those who can’t afford it, and crack down on corruption within the government. Also, the government must grant formal property rights to all citizens of South Africa to avoid the racial tensions and instability that Zimbabwe faced. South Africa cannot afford to repeat the mistakes of  Zimbabwe or the misgivings of its past. The government must also be strategic vis-à-vis dealing with the United States and other powers to avoid facing further sanctions that can damage vulnerable social capital, and inflate the inequality gaps that have yet to narrow.