Background:
During 2018, land expropriation without compensation (EWC) dominated the public discourse in South Africa to such an extent that it was declared the Word of the Year by the Pan South African Language Board (PanSALB), based on factual statistics of keywords/concepts tracked in the media. Unfortunately, the mere possibility, however remote, of EWC being adopted has been accompanied by a decline in confidence levels amongst businesses and consumers alike during 2018, with capital formation having declined by more than 7% over the past eleven quarters (in real terms).
Due to the highly contentious nature of the issue of EWC, particularly the destructive and highly visible effect that such a policy can exert on socio-political and economic stability (as witnessed recently in Zimbabwe and Venezuela), it was decided by an independent economist (Dr Roelof Botha) and associate researchers to conduct an objective economic impact assessment (EIA) of the suggested EWC policy.
Dr Roelof Botha is a long-standing Adjunct Faculty member at GIBS and previous winner of the Finmedia Economist of the Year award and he was ably assisted by Prof Ilse Botha from the University of Johannesburg. Peer reviews of the study were conducted by Lumkile Mondi (University of the Witwatersrand), Keith Lockwood (GIBS) and Wandile Sihlobo (a member of the Panel of Experts on Agriculture recently appointed by President Ramaphosa).
This independent study represents an attempt to present a robust, factual, and objective economic impact assessment of EWC. The results of the EIA point to extreme economic hardship for South Africa, should EWC be adopted, including a downgrade of the country’s sovereign bonds to junk status, higher interest rates, a fairly sharp decline in taxation revenues and a deep recession.
The research work has been facilitated through the support of GOPA Group SA (a subsidiary of GOPA Worldwide Consultants, based in Germany), Kellaprince Properties; Lowveld Trust; Farmers’ Agri-Care; and InteliGro.
The complete study is available upon request from Dr Roelof Botha, e-mail: gopasa@worldonline.co.za
