In January 2025 President Cyril Ramaphosa signed South Africa’s new Expropriation Act into law in the single most devastating setback to South Africa’s economy of the democratic era. He justified it as a land reform measure and government propagandists have continued to drive that narrative in the hope that the idea would take hold sufficiently to dull opposition to the law. How, their reasoning goes, could any person with knowledge of South Africa’s apartheid past oppose a measure to bring about social justice for the dispossessed?

That is just a device, as the Act’s provisions are not confined to land. On the contrary, it establishes a framework for the expropriation of all "property", and expressly contemplates immovable, movable, and intangible property, meaning its reach extends beyond land to other forms of property.

It is for this reason that the Act has had such a chilling effect on investment into the South African economy. Even if it were ringfenced around farms, it would have a chilling effect. Just look to South Africa’s hapless northern neighbour in Zimbabwe. But the fact that everything else is up for grabs, from shares in companies to intellectual property, is something any due diligence exercise by a potential investor soon uncovers. And the effect is to send them elsewhere.

Why? Because they have seen how the South African government steals, and they have read how it wants to take medical aid funds and pension funds and they know that it did already expropriate mineral rights without compensation, and that Ramaphosa still boasts of that as a great thing, and they think given the powers afforded in this law they could take a whole lot more – so maybe this is not a place to commit funds.

Doubt the extent of that? Well, South Africa’s investment rate, which measures capital invested in the economy as a share of GDP, is now lower than when Ramaphosa came to power and around half the level of South Africa’s faster-growing emerging-market peers.

The Expropriation Act is now being challenged in the Western Cape High Court by the Democratic Alliance, AfriForum, and the Institute of Race Relations, which are seeking to have provisions of the legislation declared unconstitutional or invalid. The Free Market Foundation's Rule of Law Project is participating as amicus curiae. Opposing the challenges are President Cyril Ramaphosa and the national government, which are defending the legislation, while the Economic Freedom Fighters has entered the proceedings as an intervening party and is opposing the challenge to the Act.

In response to that challenge, the legacy media lined up to repeat the false news that the South African government was just looking to secure justice for apartheid victims and that the opponents of the Act were somehow terrible people trying to block that.

The Associated Press, for example, reported that a “court fight begins over South Africa’s land law that irks the Trump administration”. That agency went on to falsely report, “The Expropriation Act was signed into law by President Cyril Ramaphosa last year as part of the government’s efforts to address the effects of land dispossession.”

Reuters reported that a “South African coalition party goes to court over law that angered Trump” and that the court challenge was to a “land seizure law”.

Semafor reported on the “land reform lawsuit”. It went on to report that the law “allows the government to seize private land for public use, paying zero money to the owner in certain circumstances, such as abandoned properties”. That is also false. The law is open-ended and the circumstances in which it can be applied are not limited to the few examples, such as abandoned properties, listed by the state.

The Financial Times reported on what it said was a “land seizure law”. ABC, The Washington Post, Business Insider Africa and scores of others all did the same or similar.

It is not that they do not know. They have all been told the truth but choose to repeat the untruth.

The damage caused to South Africa and all its people is incalculable and could not be expressed better than through the report on this page this morning on South Africa’s latest unemployment data released yesterday. An official unemployment rate of over 30.0%, and among young people of over 50.0%, and all because the investment rate is half of what it should be. There is no greater risk to the future of South Africa’s democracy than those numbers.

Even the African National Congress has lost so much due to this law – but seems not to care. If the investment rate had held above 20% it would never have lost power.

The correct headlines would therefore be that the Democratic Alliance, AfriForum, Institute of Race Relations, and Free Market Foundation are committed to overturn “an asset grab law that will fuel further state corruption in South Africa” and “that underpins the poverty and unemployment that threaten South Africa’s democracy”.

That is how a sane rational person who thinks and cares about the welfare of people would describe what is going on. A person who respects the audience they are writing for.

What about land reform? That is easy. Start with the fact that in the fertile east of the country more than half of land by productive value is in black possession but not ownership because South Africa’s democratic government opposes giving title to black landholders. On the commercial side land reform is easy too. Grant zero-interest loans to aspiring black commercial producers with sound business plans — so that they can benefit from the same thing that helped white agriculture grow  — access to cheap capital.

The Common Sense has often proposed — you could call it a policy pillar of this newspaper — that black farmers be offered loans at a 0% interest rate, with those being underwritten by the state and the banks. White farmers will continue to borrow at the national interest rate, as they have always done, however, black and white partnerships will receive a discount on their loans proportionate to the ownership of the venture.