The worst afflictions in a modern economy

2007-11-24 00:00

Land reform must rank, with education, as one of the most depressing failures of the African National Congress’s post-1994 record.

Falling behind in education — and the resultant limited skills — and having no land or property are perhaps among the worst afflictions that can befall one in a modern economy. Their effect can last for generations: a child who was born at the start of democracy in 1994 in a poor black household with no home or land and whose parents had limited education during apartheid, are frequently trapped in a cycle of despair. Even if the economy grows beyond six percent per year, the chances of the parents securing jobs are limited as the highly modernised economy only churns out jobs for those with high skill levels. The child is likely to walk hungry to a faraway under-resourced school. The township and rural teachers themselves would be underqualified because of the Bantu education they received before 1994.

The poor black child who started school after 1994 must still overcome the same hurdles that his or her parents faced. I would not wish the same treacherous 20-kilometre daily journey to school, half-starving, praying for a lift from a passing Good Samaritan, often having to navigate the assortment of tsotsis along the way, and when finally arriving at school, to share a book and desk with a half a dozen others, which I had to endure on my children. Sadly, for most South Africans, it is the same depressing story, only this time it is under a democratic government, run by blacks.

In order to break the cycle of poverty, unemployment and despair in black communities, both education and land reform will have to be tackled full-on by the government. That is why one wants to cry in despair, frustration and anger when one hears from the Ministry of Agriculture and Land Affairs that senior officials of the Land Bank siphoned off R1 billion meant for land reform to fund their pals’ and associates’ ventures.

Under cabinet’s recommendations, a forensic audit report into the financial management of the Land Bank has now been sent to the National Directorate of Public Prosecutions for “further investigation”. In August, the National Treasury made a R1,5 billion loan guarantee and a cash injection of R700 million available to the bank to make the state agricultural financier more effective. The Land Bank has become even more important now that the ruling ANC has adopted the ambition to pursue a developmental state along the lines of the successful East Asian tiger economies. Sadly, the Land Bank has been spectacularly ineffective, let alone playing a developmental role. When the Treasury announced the financial injection into the Land Bank in August 2007, it said: “The government’s initiatives are to strengthen the bank’s role as the main driver in ensuring the country’s food security and promoting sustainable development in the agricultural sector.”

The Treasury, the Department of Agriculture and Land Affairs have, for a long time, worked on a turnaround strategy for the bank, with no visible success. The key emphasis of the business strategy for the bank was to refocus it into a “developmental” bank. Until this month’s corruption allegations, there has been hardly any government scrutiny of the bank’s inefficiency. It has been deemed “transformed” because it had black faces on board and management level. The Land Bank is a good example of the fallacy of focusing on transformation by just appointing black faces at the top of institutions, rather than focusing on what they actually do to change the economy. It underlines the pitfalls of appointing not only ill-equipped political appointees, but individuals who don’t have the vision to make strategic institutions work for the economy.

The Land Bank’s record in helping emerging farmers, in terms of training, technical expertise and funding has been abysmal. Its record on land reform is embarrassing. For the financial year that ended in March 2006, it posted a loss of R125,4 million. The year before, it posted a loss of R207,6 million. Insiders say it will post another loss this year.

Important developmental roles for the bank, according to its business plan, are to ensure that the country achieves food security, to make agriculture more efficient and to develop emerging farmers. Small farmers, just like the four million black small and informal businesses, lack the influence that the powerful black middle class and business tycoons have over ANC direction and policies. There are no large and powerful lobbies for poor rural groups, small farmers and the landless in the ANC or South Africa. Most of the ANC’s power brokers are city slickers.

The bulk of the black farmers who survived during apartheid was based in the former homelands. This meant that the ANC leadership would always be suspicious of them. Most of South Africa’s black population is now urbanised. There are not many powerful ANC branches in rural areas. Most ANC members see land in the context of houses in town. Some ANC politicians turned tycoons acquire a farm to show that they have now arrived. At the heart of the East Asian developmental states’ transformation has been land reform. Even setting aside some of the opposition from white landowners who oppose the validity of land claims or demand exorbitant prices, the government has failed its people.

South Africa has a large poor rural population. These people could have been given deeds to their land and training to farm, so that could can at least provide their own food, and they could use the land as collateral for other things, such as acquiring a loan to send their children to university. Women could have been empowered in the rural areas by giving them land and training. This would have given women economic independence, boosted their social standing and decision-making power in families and communities. Poor communities could have been provided with support to farm co-operatives along the lines of those in Israel.

Since 1994, only four percent of land or four-million hectares has been transferred to black South Africans. The Land and Agriculture ministries have publicly acknowledged it will be a “serious challenge” to reach the target of 30% — 25-million hectares — by 2014. For the Land Bank and the government to complain that the willing buyer, willing seller approach is a stumbling block appears more and more like fudging. Where government handed over land to communities, it was not accompanied by training and continual support for the new farmers. Very few countries have sustained high growth rates without land reform. Not only is South Africa missing the untapped potential of developing agriculture through land reform, it is missing the opportunity to make many people self-sufficient by enabling them to produce their own food.

• The second edition of William M, Gumede’s book, Thabo Mbeki and the Battle for the Soul of the ANC, will be launched on December 3.

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