Failures of the land reform programme have been widely reported. They can, however, be mitigated considerably if the beneficiaries of the programme are provided with the requisite support to build institutional capacity, adopt good corporate governance practices and beef up their organisational structures to better manage the land assets and to attract the much-needed private sector investment to make their ventures commercially viable.
In many instances, the intended goal of empowering the beneficiary communities is not realised due to infighting among the beneficiary communities and lack of working capital, lack of resources on to access water rights and develop related critical infrastructure. This, in turn, leads to once productive land lying fallow. Often, the claimant communities lack the necessary skills and managerial aptitude to put in place the good governance structures that would give assurance to prospective investors of a return on their investment.
Mindful of these challenges, Vumelana Advisory Fund, a non-profit organisation that has been providing support to beneficiary communities in the land reform space for over 10 years, has sought to close these gaps by developing and implementing tailored interventions that help to improve the communities’ capacity to manage their land and improve good governance, which in turn, helps to attract commercial investment.
“Working with several claimant communities over the past 10 years has given us invaluable insights into the land reform programme and enabled us to develop an intimate understanding of how to capacitate the land reform beneficiaries and ensure that they use their land productively,” says Peter Setou, Chief Executive Officer of Vumelana Advisory Fund. “We have learnt that throwing money at the problem is not a magician’s wand that will change the fortunes of the land reform programme.
“We have learnt through many case studies related to the land reform programme. We now have a fair understanding of what works, and what doesn’t and identified which interventions are required to give impetus to the land reform programme. The success of the projects that we manage is testament to the success of the interventions that we have put in place.
Improving governance
Setou points out that lack of good governance in many CPAs – the juristic bodies that oversee the management of the claimant land – is one of the major impediments dissuading potential investments.
In a bid to improve good governance, Vumelana Advisory introduced a programme called the Communal Property Institution Support Programme, or Organisational Development and Capacity Building, to support the development of well-governed CPAs. Setou says that the programme does not take a blanket approach but is tailored to meet the differing capacity needs of each beneficiary community.
The support given to claimant communities in accordance with this programme includes practical programmes such as institutional development support which entails providing CPAs with support to draft CPA constitutions, develop trust deeds, and shareholder agreements. The support also includes giving governance support to assist with beneficiary verification, preparation of accounts and the convening of annual general meetings.
In addition, beneficiary communities are assisted with policy and procedures development and given management support. This encompasses support and advice on administration issues including, among others, remuneration, procurement, finance, human resources and benefit distribution policies. Guidance is given on operational issues such as acquisition of premises, appointment of staff, selection and appointment of accountants, registration with the South African Revenue Services (SARS) and opening of bank accounts. This assistance also extends to capacity building and training in financial management, record keeping, and corporate governance support.
The Transaction Advisory Support Programme
This is one of the flagship programmes that is designed to support land reform beneficiary communities and investors conclude Community Private Partnerships. Vumelana Advisory Fund has always believed that the success of the land reform programme hinges on mutually beneficial partnerships between the beneficiary communities and commercial investors who have the capital required to make the land productive.
These Community Private Partnerships provide opportunities for income, employment, skills development, shareholding and ultimately the transfer of operations to communities without the community giving up ownership of the land or depending on government grants.
These partnerships provide a commercial foundation for the economic development of local communities. To build on this foundation, CPAs and other land-holding entities that are custodians of the communities’ assets must be well governed and properly managed.
“The land reform programme has immense potential to stimulate rural economic development, contribute meaningfully to food security and create employment opportunities. Properly managed, this programme provides a pathway out of poverty for land reform beneficiary communities. Our experience has shown time and again that those CPAs that manage their affairs in a diligent manner have a better chance of attracting much-need commercial partners. So, good governance is not an option, but a prerequisite to a successful land reform programme,” Setou concludes.
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