The International Monetary Fund has come out in favor of South Africa’s plans for land expropriation, as long as the process doesn’t damage agricultural output or threaten the food supply, and is conducted in a transparent and “rules-based” fashion.
The statement was made in an interview by Montfort Mlachila, an IMF representative in the country, who said the IMF is in “full support,” and the government’s actions are necessary “to address the issues of inequality.”
The ruling African National Congress (ANC) party has been promising “land reform” in the form of seizing the land of white farmers without compensation. President Cyril Ramaphosa has claimed that the white minority which constitutes around 8% of the population controls 72% of farmland. Ramaphosa announced earlier this year that the ANC will be moving forward with the process of changing the constitution to fully legalize such action, though he has also claimed that under a “proper reading” this is not necessary.
The IMF has now joined the UK’s Prime Minister Theresa May in approving of the government’s actions as long as the process is legal. Meanwhile, US president Donald Trump in a tweet instructed Secretary of State Mike Pompeo to “closely study” the situation. This led some to believe that the subsequent withdrawal of a bill to legalize land expropriation showed the ANC backing down to Trump.
Sadly, this is unlikely to be the case. The bill was introduced in 2016, and in all likelihood the South African government is merely making sure the process is conducted as transparently as possible without the possibility of a legal challenge, which would satisfy the low bar set by outside observers like the IMF and May. It is equally unlikely that there will be any significant obstacle to fully legalizing racially-based land theft in South Africa.
Meanwhile, fears continue to mount that the country is going down the same path as its neighbor Zimbabwe, which ended up forcibly seizing white farms, plunging itself into economic and agricultural disaster. South Africa’s state-owned Land Bank has already warned that uncompensated expropriation could trigger a default, which along with the complications of the process itself would create a legal and economic nightmare for the ANC.