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Why South Africans Shouldn’t Panic Over the New Expropriation Act

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South Africa’s recently signed Expropriation Act has stirred debate, but experts say there’s no need to panic. According to Professor Johann Kirsten, director of the Bureau for Economic Research (BER), the law doesn’t change the Constitution but instead provides clear guidelines on how and when land can be expropriated.

President Cyril Ramaphosa signed the Expropriation Bill into law on 23 January 2025, replacing the outdated apartheid-era Expropriation Act of 1975. While the inclusion of “nil compensation” provisions has raised eyebrows, Kirsten reassures South Africans that Section 25 of the Constitution remains the ultimate safeguard for property rights.

What Does the New Act Do?

The Expropriation Act sets out specific circumstances under which the government can expropriate land in the public interest. It defines the process of engagement, compensation, and expropriation, ensuring clarity and order.

Key points to note include:

  • The state has always had the power to expropriate land for public purposes, such as roads, railways, and dams.
  • The Act introduces stricter guidelines and clearer definitions for expropriation.
  • Compensation must be “just and equitable,” balancing public interest with the rights of property owners.

What About Nil Compensation?

While the Act allows for nil compensation, this doesn’t mean landowners will lose property arbitrarily or without recourse. Any decision for zero compensation must still meet the requirements of Section 25 of the Constitution, which demands:

  1. No arbitrary deprivation of property.
  2. Just and equitable compensation based on factors like market value, property use, and public interest.

Professor Kirsten emphasized that courts will ultimately interpret and apply the Act, ensuring fairness and constitutionality.

How Is This Different from Expropriation Without Compensation?

The Expropriation Without Compensation debate in 2017/18 sought to amend Section 25 of the Constitution to allow land expropriation without compensation in certain cases. This proposal faced division within the ruling ANC and significant public backlash, resulting in its failure.

Instead, the Expropriation Act was introduced as a compromise. Crucially, it does not amend Section 25, meaning the constitutional protections for property remain intact.

Market Reaction and Political Pushback

Despite initial concerns, market reactions to the new law have been relatively calm compared to the volatility seen during the 2017/18 debates.

However, the Act is not without its critics:

  • Opponents, including the Democratic Alliance, have vowed to challenge the law in court.
  • Any case of nil compensation is likely to face legal scrutiny, testing the law’s alignment with Section 25.

A 20-Year Process

The journey to replace the 1975 Expropriation Act began in 2004, making this law two decades in the making. Its signing marks a significant milestone in South Africa’s land reform efforts, but it also adds a layer of uncertainty to property rights in the country.

The Expropriation Act aims to streamline and clarify land reform processes without undermining constitutional protections. While the inclusion of nil compensation provisions has raised concerns, experts like Professor Kirsten believe that the Constitution’s safeguards and judicial oversight provide adequate protection for property owners.

As South Africa moves forward, the real test will lie in how the new law is applied and challenged in courts. For now, there is no reason for widespread panic.

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