CAPE TOWN – South Africa’s plans to change the constitution to allow the expropriation of land without compensation could hit property prices and trigger a banking crisis, the chief executive of Nedbank warned parliament on Friday.
President Cyril Ramaphosa announced on Aug. 1 that the ruling African National Congress (ANC) planned to change the constitution to allow land to be expropriated without compensation, as whites still own most of South Africa’s territory.
Speaking to the Constitutional Review Committee, which is investigating proposed changes to the constitution, Mike Brown said there was no need to alter the law because the existing legislation already allowed the state to expropriate property for land reform purposes.
“As a commercial bank, we are a key role player in funding the economy and any material impact to property prices would adversely affect confidence in the banking system and could trigger a classic banking crisis with significant negative knock-on effects on the economy,” Brown said.
Nedbank is the fourth largest bank in South Africa.
Since the end of apartheid in 1994, the ANC has followed a “willing-seller, willing-buyer” model under which the government buys white-owned farms for redistribution to blacks.
Progress has been slow and most South Africans believe something has to be done to accelerate change, providing it does not hurt the economy or stoke unrest.
(Writing by Tiisetso Motsoeneng; Editing by Mark Potter)