This article was first published by the IATP Newsletter on 2 February 2025
South African president Cyril Ramaphosa signed the contentious Expropriation Act into law on 24 January 2025. Despite the South African Constitution requiring the payment of an amount of compensation upon the expropriation of private property, the Act pretends to allow government to expropriate property for “nil” compensation. Not only is the Act unconstitutional, but it represents a failing in moral leadership by South Africa’s elite on the African continent.
Many African countries have experimented with property confiscation over the past century, and each of them have learnt the painful lesson of what occurs when owners are not afforded the respect they are due from the state. Zimbabwe stands as the textbook example of a land full of potential, with a long history of productive agricultural and mining enterprise, turned into a humanitarian disaster on the back of unwise politics.
Since the end of apartheid in the 1990s, South Africa has been a beacon of relative stability and prosperity on the continent due in large part to its accommodation of widespread private ownership, and its observance of the strict rules of law that protect that ownership. The increased radicalism of the African National Congress and its old and new allies in government stands to upend this success and close the door to the kinds of investment from abroad and domestically the country – and the continent – desperately requires.
Not only does the Expropriation Act unconstitutionally allow for “nil” compensation to be “paid” when property is confiscated by the state, but it makes the entire process of government involuntarily acquiring property much easier. This, when all of history’s lessons mandate that it should always be very difficult for the state to divest owners – who have not been proven to be guilty of any provable crime before an impartial court – of their property.
South Africa finds itself at a fork in the road. One road leads down the path of authoritarian socialist serfdom that has destroyed every society it has been attempted. The other leads down the road of liberal market democracy, of which there is not one example – anywhere in the world – that is destitute. Where freedom and free enterprise are respected, prosperity necessarily follows. South Africa is taking a wrong turn.
