LANDED ISSUES

ALARM bells went ringing when President Jacob Zuma announced in his state of the nation address that the country would impose restrictions on foreign ownership of South African land.

Many were up in arms with criticism saying this was certainly going to deter foreign investors. Then of course there were cries that this move was inciting xenophobia.

If people had time to do their homework they would realise that South Africa is not the first country to curtail foreign ownership of land. The regulation of the access to land and its ownership has long been a contentious issue both economically, socially and politically.

Economically land constitutes the livelihood of many and thus is linked to food security. Moreover land is a finite resource that can be utilised for productive capacity and thereby poverty alleviation.

In some countries, the right of an individual to own land is taken for granted. While in other countries the land is vested in the State with no individual ownership.

In some countries ownership refers to use and not title. In other countries one may own the house or building, but not the land on which it stands.

In many African countries the land issue is further complicated by the use of customary and statutory laws. Under the latter we have freehold and leasehold.

In many countries there is a distinction between urban land and agricultural land. Urban land is just as important as it influences spatial planning and land use patterns. A perfect example is that of apartheid.

There were townships like Soweto located on the periphery, far away from economic opportunities. The result is that labourers spend 50% of their earnings and time commuting to work.

Now the challenge is trying to house the urban poor in accessible areas, but the land near economic opportunities is either in private hands or unaffordable for municipalities to buy at market prices.

The end result is that the poor continue to be housed in areas that are inaccessible in terms of transport, jobs and amenities. If government owned land they would be able to utilise it strategically to readdress some issues like relocating workforce housing it close to economic opportunities thereby alleviating poverty.

Beyond apartheid, however, most countries in Africa have the legacy of colonialisation. Most Africans were resettled into marginal areas and denied title whereas the lucrative cores were reserved for colonisers.

Although, the cloak of colonisation has since been lifted it still remains that land imbalances need to be addressed and land redistributed in order to achieve equitable outcomes. Why should Africa in the 21st Century keep ceding parcels of its own land in order to attract investment?

We have ceded mineral wealth, labour and why should we not hold onto the last vestige of land that we have? There is no evidence to suggest that countries with restrictions on foreign ownership have deterred FDI (foreign direct investment).

Remember that beyond land ownership FDI is influenced by other variables like markets, infrastructure and fiscal incentives. You will find that other issues like excessive red tape, poor governance and a rigid regulatory environment are the biggest deterrents to FDI.

The solution is to find a middle ground between a total ban on foreign ownership and restrictions or limitation. There are a few countries like Armenia, Cambodia, Lesotho and Saudi Arabia who have imposed a total ban on foreign land ownership. Land ownership is restricted to the citizens only.

However, some countries that have an outright ban on foreign ownership of land do allow foreigners to enter into lease agreements. In Ireland, only foreigners who have been resident in the country for a period exceeding seven years have the right to purchase, lease or acquire interests in rural land.

Many countries operate on leasehold tenure with leases running from a period of 30 years to 99 years. A country is able to achieve its investment objectives while at the same time maintaining a protectionist stance over its land resource.

Moreover, limitations on ownership in terms of size, location and sector are necessary controls. In Alberta, Canada, non residents are limited to only two plots of agricultural or recreational land not exceeding 20 acres.

In 2011 Argentina passed a law restricting foreign ownership of land in key areas of the country to 1 000 hectares. It further went on to set a limit of 15% on all land owned by foreigners. So by any standards, South Africa limiting land ownership to 12 000 hectares is pretty generous to me.

Land is a key and strategic resource for any country and its use needs to be carefully regulated.

Sukoluhle Nyathi is the author of the novel The Polygamist. You can follow her on Twitter @SueNyathi

Our Partners:   NewsDay   The Independent   TheStandard  MyClassifieds