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Rand Report: The Land Debate

The expropriation of land without compensation debate is a hot button topic in South Africa, reflected in a chart of the dollar/rand (USD/ZAR) below.

The resignation of former president, Jacob Zuma, and the appointment of Cyril Ramaphosa as the new ANC/South African president gave the rand some impetus for strength over the December 2017 to February 2018 period. Gains in the domestic currency highlighted an improvement in business confidence from the newly elected president – a phenomenon referred to as ‘Ramaphoria.’

The USD/ZAR suggests the peak of Ramaphoria to have been realised in February 2018. Gains started to unwind sharply from 27 February – the same day the National Assembly (NA) resolved to review section 25 of the Constitution (the property clause) which would advance the expropriation of land without compensation agenda. While other hot topics such as pending reviews from ratings agencies and financially strained state-owned enterprises would have provided further domestic impetus for diminishing business confidence and weakness in the ZAR, it does appear that the initiation of the ZAR’s depreciation on the same day as Parliaments resolution on the land issue is no coincidence.

4 December 2018 marked another low for the domestic currency. On this day the USD/ZAR pair rallied on the back of news that the NA approved a committee report recommending the amendment of the property clause.

Where do political parties stand on land?


The EFF has been at the forefront of the land reform agenda, initiating the debate which saw the ANC move to review section 25 of the Constitution. Campaign slogans such as ‘Our land and jobs now!’ and ‘Son of the soil’ highlight land reform as the primary objective of the EFF.

The group has promised voters that it will ‘allow expropriation of land without compensation for equal redistribution.’ To do this, the EFF plans to establish a Peoples Land Council to manage and redistribute the land to those who need it for residential and production purposes. The EFF has also stated that should it come into power at least 50% of land would be distributed to women and the youth, while foreign land ownership would be abolished.


There’s a suggestion that the ANC has shown more urgency in steering the land debate in an effort not to be outdone by the EFF in terms of maintaining a populous stance.

While the ANC appears committed to amending the Constitution in order to fast track land reform, the party has emphasised that it ‘should be done in a way that promotes economic development, agricultural production and food security.’ The party has further pledged to engage more with the agricultural industry, and to invest in research and technology that would improve its global competitiveness.

The DA

Although supportive of the broader land reform agenda, the DA opposes the notion of expropriation without compensation and the amendment of the Constitution for this purpose. The party prefers title deed reform that would make tenants of state-subsidised houses actual home owners.

Addressing the land issue, the DA is looking to:

  • Get new recipients of state subsidised housing to receive full title, and past recipients of RDP homes to be given full title
  • Distribute the thousands of government owned farms and fallow land, instead of treating emerging farmers as permanent tenants
  • Give residents of tribal land security of tenure that is recorded and legally enforceable
  • Allocate adequate budgets to settle all remaining land restitution claims, and for land reform purposes, on the basis of constitutional guidelines for compensation

How important is the land issue to voters?

Recent polling data from the Centre for Risk Analysis (CRA) – which looked at a snapshot of the electorate – suggests that the land issue may be lower on the list of priorities for voters when compared with other issues, such as employment and corruption.

According to the CRA, 58.7% of respondents selected jobs and unemployment as top priorities for government. The poll goes on to suggest that land reform was a first or second priority for only 2.7% of voters.

While the topic of land is seen to affect volatility in local markets the most, issues like jobs and unemployment resonate the strongest with the voting public.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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