Short-term scenarios for land reform in South Africa

Despite the dominant legal opinion that the South African  Constitution already permits the state to expropriate land with nil compensation, Parliament has spent three years debating an amendment to Section 25 to make this more explicit and continues to release iterations of an expropriation bill. 

This stagnancy has left relative legal and political uncertainty on the scenarios of land reform.

As one of the biggest financiers of rural property in the country, Absa has a noted interest in the short-term scenarios for land reform manifest in the outcomes of the proposed amendment to S25 of the Constitution and the Expropriation Bill, 2020.

Absa appointed Genesis to assist the bank in anticipating the potential impacts of land reform and developing a strategic response.

Genesis delivered on the four objectives of the work:

1. Establish a comprehensive map of possible rural and urban land-reform scenarios based on identified drivers;
2. Develop quantitative frameworks to measure the effect of each scenario at a macroeconomic, geographic and business-unit level;
3. Quantify the impact on Absa (at a group and business-unit level) and identify areas with the greatest risk or opportunity under each scenario; and
4. Help the bank to develop strategic responses to each scenario, both internal and external to Absa, and to retest the land-reform recommendations made by the group in 2018 in the updated context.