“It would be hard to imagine how the banking and finance sector would be able to overcome large-scale loan losses [that] could arise from an expropriation without financial compensation. Government may well have to step in to prop up the banks and other financial market role players.”
He warned that food security and jobs in the agricultural sector could be negatively affected.
“One suspects that even now there is hesitancy to invest in or finance any new agricultural ventures as a result of the uncertainty created by the recent developments‚” he added.
But the motion passed in the National Assembly contained vote the caveat that expropriation would be done in a sustainable way and is only the first step in determining how expropriation will take place.
Professor Ruth Hall of the Poverty‚ Land and Agrarian Studies at the University of the Western Cape‚ said in a recent interview: “In the same breath in which Ramaphosa talked about expropriation without compensation‚ he said three things. Any changes must promote rather than disincentivise agricultural investments; they must not threaten food security; they must be the result of consulting widely on this including with financial institutions.
The matter has been referred to the Constitutional Review Committee‚ which must report back to Parliament by August 30.
The Economic Freedom Fighters proposed that an ad hoc committee be established to review and amend Section 25 of the Constitution‚ known as the property clause.
It states the government must make laws and take other steps to help people to get land to live on‚ and to claim back land they were dispossessed of after 1913 as a result of colonial and apartheid laws.