Share

Expropriation bill will spook investors, banks say

Johannesburg - A draft law that would allow South Africa’s government to expropriate property without having to pay compensation at market prices would undermine the rights of owners and mortgage holders and deter investment, the nation’s banking industry said.

The Expropriation Bill now before Parliament would give the state the right to seize property in the public interest and pay the owner “just and equitable” compensation.

The government says the measure is necessary to address racial disparities in property ownership dating from white minority rule, which ended in 1994.

The law would force banks to raise mortgage costs or reduce or withhold loans, the Banking Association of South Africa said in a written submission to Parliament’s Public Works Committee, which held hearings on the draft bill on Tuesday.

While expropriation is sometimes necessary, the procedures must adhere to international norms and the constitution, it said.

“We are concerned that promulgation of the bill could lead to the further dilution of property rights,” it said. “This has the potential to introduce unintended economic consequences and introduce systemic risk into the sector.”

The association’s 32 members include Standard Bank Group, Nedbank Group, FirstRand’s First National Bank unit and Barclays’s SA unit. They collectively hold mortgages worth R2.3trn ($183bn), including R70bn in the agricultural industry.

“We submit that such a bill must not result in discouraging local and international investment,” the association said. “The bill should restrict the definition of property to matters of land reform and equitable access to the country’s natural resources.”

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.02
-0.4%
Rand - Pound
24.17
-0.3%
Rand - Euro
20.66
-0.3%
Rand - Aus dollar
12.39
+0.2%
Rand - Yen
0.13
+0.4%
Platinum
910.20
-1.4%
Palladium
1,008.00
-5.4%
Gold
2,155.32
-0.2%
Silver
24.90
-0.6%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders