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South Africa will not allow foreign nationals to own land and farmers’ will be limited

Thursday night’s State of the Nation Address has left an uneasy feeling among South Africans. Disruptions, security police, walk outs and blocking of cellphone signals further aggravated South Africans after images of opposition party members being handled with excessive force at marches leading up to the President’s speech.

South Africa Will Not Allow Foreign Nationals To Own Land And Farmers’ Will Be Limited

But the biggest, and most disconcerting, surprise was that foreigners will not be allowed to own land in the Republic. This means that the ruling party is now actively discouraging international investment.

Currently 7% of South African properties are owned by foreign nationals with estate agents recently reporting serious demand for prime property by wealthy Russians spending in the region of R20 million on homes on South African soil. Prohibiting foreign national landownership would directly impact on the already strained South African property market and would absolutely negatively trickle down into the economy. Ironically this announcement by the ruling party comes on the back of President.

Zuma visited to Davos, Switzerland a mere two weeks ago and charmed the delegates at the World Economic Forum and in a statement from the Presidential office the ANC committed to "work even harder" to stabilise the economy and eliminate the gap between rich and poor, reads a statement issued by the Presidential office.

The ANC has in the past warned that if South Africans failed to regulate land ownership they would "lose" their country.

In his address Zuma stated that, "Foreigners will not be allowed to own land in South Africa," adding that they would instead be eligible for long-term leases. "In this regard, the Regulation of Land Holdings Bill will be submitted to Parliament this year," he said to applause in the National Assembly.

Another shock was the announcement that a ceiling would be placed on how much land farmers may own. In terms of new proposed laws, a ceiling of land ownership would be set at a maximum of 12,000 hectares. These provisions are among the plans the ANC has said it will implement to deal with land distribution.

ANC party secretary-general, Gwede Mantashe, last month said there should be "a ceiling on land ownership".

He said that if legislation were passed "its application retrospectively is an issue which will be tested constitutionally. The government must pass the law and test it constitutionally. It must comply with constitutional requirement."

He said foreigners would be able to access land through leaseholds.

In response to this announcement Henk van de Graaf, assistant general manager of agricultural organisation TLU SA, said the policy of limiting land ownership to a certain size or number of farms would be difficult.

"It would all depend on where you are. In the Karoo, 12000ha could be too small to function as an economic unit. In the Cape Winelands, a farm of that size would be more than enough."

Even within one region the viability of farms can vary greatly because of the quality of the land and the climate, he said.

Van de Graaf warned that farmers needed economies of scale to survive because their average profit margin was only about 3%.

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