'Just be frank' with investors about land, says Ramaphosa's economic adviser

Trudi Makhaya, President Cyril Ramaphosa's economic adviser, believes the best way to deal with investors' concerns about the possibility of land expropriation without compensation is to "just be frank".

The issue should also be contextualised, she argues, as land reform under democracy not yielding the "outcomes that people want to see".

Fin24 sat down with Makhaya at the Union Buildings on Tuesday, days after she returned from accompanying Ramaphosa to the G7 Outreach Summit in Quebec, Canada, where the South African delegation faced questions about policy certainty from potential Canadian investors and leaders of the world's most developed nations.

Makhaya took up her role in May, after being announced in April as the president's economic adviser and coordinator of his four investment envoys.

She is careful to present both sides of the land debate. There is a great deal of analysis, she argues, including the high level panel report convened under former president Kgalema Motlanthe, which concluded that "you don't need a Constitutional amendment".

'Benefit of due process'

Makhaya refers back to her experience as deputy commissioner at the Competition Commission, where she was instrumental in levying a record fine of R1.46bn on 15 construction companies who colluded to rig their bids for the 2010 Football World Cup stadia.

She is reminded, she says, of when one is setting up a fine in competition cases, "[t]here are criteria you come up with, and you could possibly come up with a zero fine in instances when the company is about to collapse".

"You know the kind of reasoning," she says. "You can look at the factors in Section 25 [of the Constitution] and say, 'Given the history of the use of the property, how it was acquired, any state support that had been provided in the past, we conclude that compensation is zero,' and it would be rational. Argued out, with, obviously, the benefit of due process."

Makhaya has the advance of a mainstream economics Master's degree from Wits University, a second Master's degree from Oxford University in Development Economics, and an MBA.

WATCH: 'Be frank' when talking about land reform

Clarity through Parliament

Makhaya argues that if it were true expropriation without compensation were possible in the current confines of the Constitution, it would have been done already.

She is hoping the Parliamentary process will settle the debate and give "clarification for testing the provisions as they stand, which is part of the governing party's approach to land reform, whereas in the past, the tendency has been to pay top market value."

Parliament's Constitutional Review Committee will embark on a tour of all nine provinces to receive input from the public from June 26.

MPs have until September 11 to report back to the National Assembly with a report.

The ANC promised in its 1994 election manifesto to redistribute 30% of white-owned commercial land within five years. By 2016, just 8-9% had been moved to black hands, and the 'willing buyer, willing seller' instrument used by the state has been criticised for the slow pace of land reform.

At its 54th national conference in December, the ANC adopted a resolution to expropriate land without compensation, with the caveat that this should not affect food security or other sectors of the economy.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Yes. We need the money.
11% - 980 votes
It depends on how the funds are used.
74% - 6507 votes
No. We should have gotten the loan elsewhere.
15% - 1347 votes