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‘Unclear’ expropriation laws could put South African banks at huge risk

‘Unclear’ expropriation laws could put South African banks at huge risk

The Banking Association South Africa (BASA) has welcomed the decision to explicitly provide for the expropriation of land without compensation.

The association said that it supports land reform, and that South Africa has not adequately dealt with the consequences of land deprivation during apartheid and colonialism.

“Land restitution, redistribution and security of tenure are means of providing vulnerable people with access to secure incomes and opportunities to create the generational wealth needed to correct the injustices of the past,” it said.

It further urged the Constitutional Review Committee, Parliament and the relevant government departments to expedite ‘crisp, clear policy and legislative frameworks in respect of expropriation without compensation, as soon as possible’.

“Care must be taken to ensure that any amendment to the Constitution does not weaken or reduce property rights in South Africa,” it said.

“An amendment that leaves all property or specific classes of property – homes, assets, intellectual property, productive agricultural property, among others – vulnerable to expropriation without compensation, would be a real risk to banks and the country’s ability to attract both local and international investment, grow an inclusive economy and create jobs.”

BASA said that it has put forward proposals to finance and support sustainable land reform and food production.

These include public-private-partnerships, blending government support with commercial loans, and providing business skills and other inputs to emerging farmers and land-reform projects, so that they can become part of the formal economy, it said.

“The association supports an independent socio-economic impact study into the effects of expropriation without compensation; an authoritative land ownership audit and the creation of an electronic register for all properties.”