Changes to the Constitution may boost, not weaken, South African property rights

South African President Cyril Ramaphosa is walking a tight on land reform.
GCIS

The South African government’s plan to change the constitution to mention land expropriation without compensation could, ironically, end up strengthening the property rights on which investment depends.

Pressure to change the Constitution to allow the government to expropriate land without compensation is currently the country’s most contentious issue. Supporters insist that the measure is essential to end racial land ownership patterns which continue to favour whites a quarter century after the end of apartheid. Critics insist that this will threaten property rights and choke off investment.

President Cyril Ramaphosa has now announced that the governing African National Congress will support a change to the constitution’s property clause. This was greeted with predictable anxiety among pro-business commentators. But their fear that the change will weaken property rights seems misplaced. To see why, we must look at what property rights are, what the constitution says and what Ramaphosa and the ANC leadership may have in mind.

Much of the fear seems based on a view of property rights which sounds credible but does not describe reality in market economies. It sees property rights as the right to do whatever you like with what you own. The philosopher CB MacPherson pointed out four decades ago that this is not how property was understood until fairly recently, and not how property rights actually operate.

There is no unlimited right to property anywhere. People who own homes cannot use them to make banned substances or to fire missiles at neighbours. People who own factories cannot use them to enslave labourers or to pump poisons into the air and water. If owners ignore these rules, they will be forced to give up some of their property. Some might even lose the property – think of restaurant owners whose businesses are closed down by health authorities to protect consumers.

None of this is inconsistent with a market economy. On the contrary, these rules are essential to markets. A good analogy is a set of traffic lights. They limit what car and truck owners can do with their property, but they are essential to keeping the property safe.

The property rights of owners are, therefore, strong enough to allow them to invest with confidence when they know what the rules are which decide whether they keep their property.

Certainty is the key – not a blank cheque.

The Constitution

Section 25 of the South African Constitution, which is often held up by friends and foes as a cast-iron guarantee of property rights, is nothing of the sort. It does say the state can expropriate property only if it pays compensation and lists criteria which courts must take into account when deciding compensation. But clause (8) says:

No provision of this section may impede the state from taking legislative and other measures… to redress the results of past racial discrimination

That’s if it complies with Section 36(1) which says the measure must be:

reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom.

So the Section does allow expropriation without compensation – but the wording spelling out when it is allowed is vague. If the government were to test this in court, different judges would inevitably come to different conclusions. This gives owners no certainty and so they don’t know whether their property is safe.

If the constitution is changed to make clear which property may be expropriated without compensation, property rights would be stronger because it would be clear to owners whether their property is safe and what to do to keep it that way.

This is what Ramaphosa and his party say they have in mind. His announcement did not say the constitution should be changed to allow expropriation without compensation – he said that it already does this. The aim, he said, was a clause which “outlines more clearly the conditions under which” land can be expropriated without compensation – in other words, to provide the clarity the current clause lacks.

If he makes good on his promise, the effect will be to strengthen property rights by making it much clearer when the state can take land without compensation. The wording of the clause will be crucial – if it’s too vague and allows the state too much latitude, it will not strengthen property rights. But it’s unlikely that it will seriously threaten these rights because this would place the property of every home-owning ANC voter at risk.

Ramaphosa’s change of view

But, whatever the effect of this particular change, a look at why Ramaphosa made the announcement shows that the right to property in South Africa will be challenged until and unless inequality and economic exclusion are tackled far more vigorously than they are now.

He clearly did not want to change the constitution. After a previous ANC summit on land issues, in May, it insisted that it would not change the constitution. It would, rather, pass an Expropriation Bill and test whether the land redistribution it planned was possible within the current wording.

His announcement this week sounded reluctant: he said that the current constitutional wording does allow expropriation without compensation and then insisted on the need to change it – there was no logical connection between the two.

This strongly suggests that he was forced to change position. Since the change came after a meeting called by the ANC’s National Executive Committee, it was surely pressure from this body which forced a change. This is confirmed by a report claiming that he shifted because the faction within the National Executive Committee which supports former president Jacob Zuma is using the land issue to embarrass him and his faction.

It’s easy to see why Ramaphosa and his allies had no answer to this. Inequality and economic exclusion remain deeply entrenched – the well-off are no longer all white but the poor are still almost all black.

Many black professionals and business people believe the economy is still controlled by the white minority. Given all this, no politician whose support base is overwhelmingly black can deny the need for change without facing the same ridicule as Congress of the People leader Mosiuoa Lekota, whose opposition to land expropriation has politically isolated him .

Realities need to change

South African economic realities mean that rejecting economic change is simply not an option for politicians who seek a large black support base. It will be hard for them to insist on strong safeguards for property when many of their voters do not own any.

The obvious way to change this is to change these realities – to begin to negotiate economic changes which will open the mainstream economy to millions who now languish on its fringes while securing property rights for all.

Steven Friedman, Professor of Political Studies, University of Johannesburg

This article was originally published on The Conversation.

Ramaphosa's efforts will fail unless corrupt officials are brought to book

South African President, Cyril Ramaphosa, has a tough job of convincing investors that the country has turned the corner. GCIS

South Africa’s new President, Cyril Ramaphosa, has been showered with praise for his early moves of fighting corruption. But he will need to do much more to win back investor confidence.

Critically, Ramaphosa needs to display that wrong doers of former President Jacob Zuma’s era are going to be held accountable through prosecution. Numerous academic studies, including mine, show that investors consider the effective execution of law and order as an indicator of property rights protection.

For South Africa, this means that stabilising government debt and attracting much needed investment will entail both the investigation of corruption as well as prosecution of those implicated. Achieving this will prove impossible if investors aren’t convinced that the rule of law is alive and well.
Ramaphosa has started well. He devoted a great deal of his early days to removing compromised and corrupt elements in key leadership positions, including government departments, state owned enterprises and in security and justice agencies.

He followed up by setting up outwardly focused initiatives to attract investment. These include the establishment of special envoys to attract $100 billion of investment into the country.

These measures will go some way to fixing the wrongs of the past but they are far from sufficient. It’s not enough for politicians who oversaw and actively contributed to the decimation of the country’s social and economic fabric to simply retire from politics, move to new positions in the African National Congress (ANC), or be moved to other state departments. Similarly, reversing Zuma’s legacy of state capture won’t be possible unless the officials appointed by his ministers are also investigated and prosecuted.

Significant damage

The economic damage caused during the Zuma years is huge. The latest economic growth numbers are not encouraging. Gross domestic product shrank by 2.2% during the first quarter of this year and is expected to remain muted for the rest of the year.

The latest reviews from global rating agencies are also unflattering. For example S&P has noted that South Africa’s fiscal and economic trajectories are still very weak. As a result, the country is vulnerable to investor sentiment. This is being reflected in the weakness of the country’s currency as investors dump domestic equities and bonds.

The damage is especially prevalent in public institutions. The extent of the damage is reflected in the latest report of the auditor-general, Kimi Makwethu. Irregular expenditure, which includes payments made for contracts awarded unlawfully or without necessary approvals, rose by 75% compared with the previous financial year. Fruitless and wasteful expenditure, which are payments made in vain, increased by 71%.

The Auditor General notes that municipal corruption had been steadily increasing for over a decade but that the problem had rapidly worsened over the past five years. The key reason for the deterioration in state finances was that corrupt officials increasingly believed that they were immune to prosecution. That does not bode well for investor confidence.

Does the state have the means?

A troubling problem is that the country might not have the ability to effectively deal with the litany of ills bequeathed by Zuma. The country has limited resources available for a prosecution process that is going to be long and laborious.

The prosecuting capability of the state was in the spotlight recently when a court ruled against the state’s Asset Forfeiture Unit in a case against the Gupta family. The judgement shows that the country’s prosecuting institutions have been systematically compromised.

And although a commission of inquiry into state capture has been set up under Judge Raymond Zondo, it’s unlikely to wrap up its work in under two years.

This suggests that, despite the optimism, realistically South Africa may not have the institutional capacity to fight systemic corruption and prosecute those involved at a pace sufficient to convince domestic and foreign investors that their investments are safe from ongoing corruption.

Accountability

While there are many leaders with large public profiles that need to be investigated thoroughly for corruption, it isn’t enough to fixate on the “top of the pyramid” only.

Massive corruption needs many enablers, in both the private and public sector, to either actively participate in the wrongdoings or, at the very least, look the other way. This means that although a few high profile arrests and convictions can be useful signals to investors that concrete steps are being taken to reclaim the state, a much more robust process is needed to shore up the economy and South Africa’s crucial institutions.

This raises an essential question: how much pain is the country prepared to endure in the short term to fully excise the rot of corruption, creating more sustainable prospects for the country?

Recent experiences from Brazil show that inquiries into state corruption can profoundly complicate economic recovery. That’s more so if the slow pace of the court processes mean that politicians, officials and directors are not held to account expeditiously.

Ramaphosa has done well in turning the ship of state over the last 100 days, but eradicating and rectifying the legacy of state capture will need immense political will and institutional capability. Without visible accountability, corruption will just decentralise into the shadows and South Africa will once again be in peril.
Sean Gossel, Senior Lecturer, UCT Graduate School of Business, University of Cape Town and Timothy London, Senior Lecturer, University of Cape Town
This article was originally published on The Conversation.

ANC won't fix internal strife unless it addresses root causes of discontent

ANC members show their support for party leader and president of South Africa, Cyril Ramaphosa. Brenton Geech/EPA-EFE

South Africa’s governing party, the African National Congress (ANC), is in crisis less than a year before a general election expected to be held in mid-2019. If it wants to end the crisis, it may have to do something about which it talks a great deal, but does little – trust its members.

The ANC has been in crisis for years, as its own documents confirm. Its regional and provincial leadership elections are almost routinely challenged as losers claim the winners broke the rules. Often the challenges centre on claims that the process in which branches send delegates to conferences was flawed.

It was this crisis which ensured that the ANC could choose leaders last December only because the contesting factions made a deal to share positions. Without that bargain, the losers would have cried foul. There was no guarantee that the conference would continue – and every certainty that, if it did, the outcome would be tested in court.

The deal kept the ANC afloat, but did nothing to ensure that anyone in the governing party trusts its processes or that there’s a structure in the ANC with enough credibility to settle disputes and convince the losers, or those who fear they will lose, that the processes are fair.

This crisis could grow as the ANC chooses candidates for its 2019 election lists. Much is at stake. Who is chosen will decide which faction dominates in national and provincial parliaments. And, because economic opportunities in the market are limited, winning a place on the list which gets you a seat can, for many, be a ticket into the middle class.

So a heated contest seems certain and the ANC’s current performance makes it likely that losers will claim they were done down. Since voting trends (in local by-elections which give a sense of who voters are supporting) suggest that the ANC will win next year’s election comfortably, the battle to choose candidates may be far more damaging to it than the election.

Millions excluded

Part of the reason for the crisis is the ANC’s failure to tackle the exclusion of millions from the mainstream economy. Because it has not engaged key economic interests in negotiations on opening up the economy, politics for many of its members is not about public service or status but about looking for resources.

Even if it plans to address this urgently – and there is no sign it does – the problem will take years to fix. So its elections will remain, at least in part, a battle to make it in the economy and there will be huge incentives to break the rules. This means that it will remain in crisis unless it looks at its own organisational problems.

It has recognised these problems – it excels at identifying its woes and discussing them openly. But, although it has debated remedies and set up teams to deal with them, its willingness to say what is wrong is not matched by an ability to put it right.

This is because the problems are deep rooted. But it is also because the ANC has done little or nothing to fix the structures where the problem starts – its branches. The more than 3 000 branches are the core element of ANC decision-making. They nominate candidates for office and choose most of the delegates at conferences who vote for leaders. They are also meant to be the units in which ANC members discuss policy. But ANC documents and other sources report constant claims that branches are constituted, or operate, in ways which are irregular.

Broken branches

The ANC routinely insists that the branches are all-important. And it does try sometimes to put out fires at branch level. But it has never begun a concerted effort to ensure that the branches really are where power lies and where members can express themselves openly.

ANC leaders would hotly deny this. It is an article of faith within the organisation that the leaders are simply servants of the members in the branches. But many branch members complain about being ignored, bullied into supporting factions or generally being treated like useful weapons in the battles between elites.

Making sure branches wield real power and allow members a say is difficult –because so many are excluded from the economy, some do join branches in the hope of attaching themselves to politicians who will steer resources their way. But it is not impossible. Many members belong to branches because they care about the ANC and the country. Many are unhappy with vote-buying and corruption and would fight it if they were taken seriously.

It is also essential. The only way to fix the ANC is to make sure that the branches have power to fend off those who would buy or bully them and to hold to account leaders who look after themselves, not citizens.

Holding leaders to account

Perhaps the most common refrain in this country is that we need “leadership”. But leaders do what the people want only if the people are strong enough to make sure they do. That is as true for the ANC as for the country.

If it wants elections that are about who has most support, not who is better at rigging branches and pushing them around, it has no option but to make sure that its branches really do call the shots.
Steven Friedman, Professor of Political Studies, University of Johannesburg
This article was originally published on The Conversation.

To fix South Africa's dysfunctional state, ditch its colonial heritage

South Africa’s Union Buildings in Pretoria.
Paul Saad/Flickr, CC BY-NC-ND

South African President Cyril Ramaphosa recently made an astonishing statement: that the country’s governance is collapsing. It takes extraordinary courage for a head of state and of the national executive to be so candid.

Ramaphosa’s statement followed the release of damning data about the state of governance in the country. For example, the most recent report from the Auditor General Kimi Makwetu showed that only 7% of the country’s municipalities are discharging their constitutional mandate. And only 8% were given a clean audit in the last financial year.

Hot on the heels of this report were parliamentary briefings which painted a gloomy picture of the state of public service. Added to this is the fact that a number of state owned enterprises have gained notoriety as conduits for patronage.

Does this suggest that South Africa is at the tipping point? I’m asking the question because an important determinant of a functioning state is its administration. As the British political scientist Andrew Heywood argues:

Political systems can operate without constitutions, assemblies, judiciaries, and even parties, but cannot survive without an executive branch to formulate government policy and ensure that it is implemented.

The administration of the state is key. A political system can be optimised or vitiated by the way in which public affairs are managed. Politics decides a system of government while the administration of the state institutionalises how these objectives are realised. In a democracy this is about enhancing the quality of citizens’ life.

To understand what’s behind the appalling state of governance in South Africa it’s more useful to look at causes, rather than just the problems. I argue the main driver is that South Africa’s democracy has been sacrificed at the altar of neo-liberalism - a system of organising society in which the markets are left unbridled and their principles thrust into various aspects of human life.

The rise of neoliberalism

The collapse of communism in Eastern Europe in the 1980s gave the neo-liberalism arsenal an unfettered edge. It was peddled as the panacea by international financial institutions and liberal scholars. Audaciously, an American political scientist and economist Francis Fukuyama proclaimed in his book The End of History and the Last Man that the market economy and a democratic political system were the only means to achieve sustained growth and development.

The post-apartheid state was created just as these views were becoming more prevalent. This meant that the new state didn’t deconstruct the colonial architecture of its administration.

The African National Congress (ANC) also took over running the state with zero experience behind it.

In other words, the ANC ran into government in 1994 completely unprepared. As a result, it often embraced the colonial apartheid governance model.

The intersection of a neo-liberal approach and a colonial edifice eroded the state’s capacity to fulfil the mission of the liberation struggle. This was about “uplifting the quality of life of all South Africans, especially the poor, the majority of whom are African and female.”

In a neo-liberal framework, the people’s sovereignty is replaced by the market. The public good is commodified. State and the citizens assume a transactional relationship in which citizens are characterised as customers.

New public management

During the 1980s a template began to emerge for state reform along neo-liberal lines. It was called new public management. It remoulded the administration of the state according to private sector principles and practices, which saw the state becoming more service ensurer than service provider.

The approach dominated the 1980s but waned in the 1990s. South Africa embraced it anyway, and used it to frame the post-apartheid model for state administration.

The new public management approach became a staple diet in the education of students of government. They were taught that the performance of the state was the function of the economic value of efficiency, largely derived from privatisation cuts in public expenditure. The key is to maximise output with minimum input costs. It’s not about the “social effectiveness” of the state’s action - enhancing the wellbeing of the citizens.

This approach spawned inequality. Society is stratified along socio-economic lines. The hardest hit are the poor while the business, political and bureaucratic elites rich live lavishly.

As I have argued elsewhere, “democracy in conditions characterised by inequities in socio-economic gains is not sustainable, particularly in South Africa with the history of many decades systematic marginalisation” of other races.

Can governance be fixed?

South Africa’s governance challenge can’t simply be fixed by reorganising the structure of government, such as by reducing the size of the public service. It requires rethinking the ideological edifice that frames it, and daring to decolonise the administration of the state.

To get there, the idea that government should be run like a business has to be jettisoned and the idea that it should be like a democracy embraced. This should be linked to the concept of the public good, where democracy should be given a human face.

Iain McLean, a British professor of politics at Oxford University, offers this conception of the public good:

any good that, if supplied to anybody, is necessarily supplied to everybody, and from whose benefits it is impossible or impracticable to exclude anybody.

So how can this begin to happen in South Africa? As a crucial first step, governance requires new narratives. These must transcend neo-liberal prescriptions and colonial-apartheid entrapment, replacing them with the notion of the public good.

Mashupye Herbert Maserumule, Professor of Public Affairs, Tshwane University of Technology

This article was originally published on The Conversation.

The way history is taught in South Africa is ahistorical -- and that's a problem

History textbooks suggest that in 1994 when formal apartheid and racial exclusion ended, so did prejudice and racism.
United Nations Photo/Flickr, CC BY-NC-ND

History may soon be a compulsory school subject until Grade 12 in South Africa. A task team established by the country’s minister of basic education made this bold recommendation in a report released in early June.

The task team credits history education with three grand tasks. The first is developing critical thinking skills, particularly those relating to “evidence” and the unique concepts necessary to becoming an academic historian. The second is to develop identity, with a focus on pan-Africanism and nation building. The third is about social cohesion: the ability to transcend racial, class and ethnic barriers by recognising the problem of prejudice and the issues facing a multi-cultural society.

If history is taught correctly, the report argues, school-leavers should become capable of dealing with educational, social and political problems.

The task team isn’t unique in its position. It draws on decades of post-conflict literature which has argued that history education is important for memory and identity formation. Since history education equals social cohesion, the logic follows that more history education will equal more social cohesion.

The problem is that history education as it’s currently delivered may not achieve the desired outcomes. My ongoing fieldwork involves observing four racially diverse Grade 9 history classes in Cape Town, with learners who represent a range of social and economic statuses. The observations are taking place over the course of the academic year, interspersed by longitudinal interviews with the teachers and learners.

The findings suggest that even when students are knowledgeable about historical events, they struggle to explain how these events shape contemporary society.

History education needs a more explicit focus on historical consciousness if students are to become capable of dealing with South Africa’s social problems. This focus would help students to construct a relationship between past events and present-day reality so they can understand why we are the way we are.

Textbook tales

Developing historical consciousness would require a shift from what’s currently happening. Take for instance the contents of the Platinum Social Science Learner’s Book, which is prescribed for Grade 9 history pupils in South Africa.

The history discussed in this textbook touches upon a number of important subjects including human rights, racism and legal discrimination. It explores some of the turning points in the history of apartheid: the Sharpeville massacre, the Langa march, the Soweto uprising, and the release of Nelson Mandela.

The chapters emphasise the causes and consequences of historical moments. Students are taught to understand not only the apartheid regime’s human rights abuses, but also the nature of the resistance to that regime – which after a long struggle led to democracy in South Africa. However, the textbook’s lessons on apartheid end with the “historic” election of 1994.

That election is undoubtedly an achievement worth celebrating. But the implication in the textbook is that when apartheid ended in 1994, so did the poverty, racism, discrimination and violence that were aspects of the apartheid regime. There is absolutely no discussion of the lasting impacts of apartheid, or any link between South Africa’s current problems and its recent past.

This means is that it is often left up to individual teachers to make those links between the past and the present. Unsurprisingly, the teachers that I observe construct an historical consciousness in very diverse ways even though they are all teaching the same set of historically accurate events.

For example, one teacher explained to his racially homogeneous class that their lack of diversity was a direct result of apartheid. Another compared the fascist approaches of Nazi Germany to that of the apartheid state and placed them both firmly in the past.

This is not a judgement on the historical consciousness these teachers present. But it’s worth interrogating the diverse contemporary meanings that are being created around historical events when historical consciousness is absent from the curriculum.

Students’ views

Even more interesting were the responses of the pupils, who are all around 14 years old, as they explained how they saw the relationship between past and present.

A number of students had a good understanding of apartheid events. But the only way they could explain the country’s continued racialised wealth discrepancy was to state that black South Africans were lazy. Many did not draw upon structural or historical explanations when interpreting their own social reality.

One Xhosa-speaking black student who lives in a shack argued that apartheid had no lasting effects – because the white family whose home his mother cleans often speak to him kindly. Most of the students that I interviewed believed that the colonisation of South Africa was ultimately a positive thing because now we have “clothes, food and technology”. None of the students of any race believed that white people had any historic responsibility to address past wrongs.

These students were neither stupid nor ill-informed. So how should we make sense of their responses? Perhaps this is what social cohesion looks like in 2018. For the most part they were not angry about the past, because they don’t see the past as having a particular impact on their present lives. The past is a lesson to learn from, not something which stands in their way.

The question, though, is whether they are capable of dealing with educational, social and political problems if they view these problems as ahistorical. And if we discover that they can’t, then maybe we need to include some historical consciousness in the South African history curriculum before we make more of it compulsory.

Natasha Robinson, PhD Candidate and research consultant, University of Oxford

This article was originally published on The Conversation.