As South Africa looks to limit land ownership by foreign nationals and locals.

Ray Mahlaka | 4 June 2015 00:54

Regulation of Land Holdings bill expected to be submited to Parliament by August.

The Department of Rural Development and Land Reform is aiming for the controversial Regulation of Land Holdings Bill, which looks to ban land ownership by foreign nationals, to be submitted to Parliament by August to test its constitutionality.

This follows the announcement of the bill in February, making further provisions for reducing land ownership by foreign nationals to leaseholds for a minimum of 30 years.

Local landowners are also mentioned in the bill, as it puts a 12 000 hectare land ownership ceiling by locals.

Rural Development and Land Reform Minister Gugile Nkwinti says the bill “is moving faster,” as after its debut in Parliament the bill will be processed during this financial year. The financial year for the national government is from April 1 to March 31.

“If not, we have no problem with the bill being processed in the next financial year,” Nkwinti told Moneyweb at the Communal Land Indaba last week.

The bill will apply to agricultural land ownership, often referred to as productive land, and not residential property. This, the department says is in a bid to address land reform and food security in South Africa.

If the ownership of land by locals exceeds the 12 000 hectare ceiling, Nkwinti says, the portion of land above the limit will be redistributed.

“Any land above the threshold we are happy to redistribute, but of course we will pay on the basis of a just and equitable principle,” he explains.

While not mentioning the industries already above the land ownership ceiling, which may subsequently be under review, Nkwinti says the game farm, forestry and renewable energy sector “can take a lot of land.”

Industry players have snubbed the Land Holdings Bill as an attack on property rights, and foresee that it will have a negative impact on the economy. On the criticism that the bill has courted Nkwinti says: “You have people who have land and want to protect their holding and there are people who don’t have land and want it. The role of government is to mediate between the groups.”

He also says South Africa is “about the only country” that has vast land holdings for individuals and entities, and the idea with the bill is to “service our South African citizens first.”

“At the same time we appreciate the fact that we need foreign investment for lots of reasons and balancing this is our responsibility and we will do so.”

Following the outcry on the bill by various industries, government went back to the drawing board and sent the bill to state law advisors, who “raised concerns about some aspects of the bill in terms of the constitutionality and so on.”

The department is yet to establish a land commission which is going to enforce the declaration of agricultural land by locals and foreign nationals. This commission will act as a regulator for the bill when it eventually becomes law.

At this point, Nkwinti says there no concrete indication as to the holding of agricultural land by foreign nationals. It has been reported largely in the media that up until 2007, less than 5% of agricultural land was owned by foreigners.

The bill still has to be sent to the cabinet for approval, then undergo a public consultation process before being constitutionality tested in Parliament and then sent to the President for assent.