The ANC’s plan to make it easier to take land without compensation could have an impact on financial-sector stability, but it’s “too early to panic”, said Kuben Naidoo, deputy governor of the SA Reserve Bank (SARB).
He is also the head of the Prudential Authority, which regulates banks.
The ANC supports changing the Constitution to make it easier to expropriate land, adding to emerging-market jitters that have knocked the country’s assets.
While the party sees the change as a way to speed up redressing racially skewed ownership patterns dating back to apartheid, critics say it could erode property rights and lead to Zimbabwe-style land grabs.
Banks in SA have lent farmers about R150bn and have in excess of R1.3trn outstanding on property generally, Banking Association head Cas Coovadia said Thursday.
“There’s also concern about what’s next – is agricultural land at risk or is residential land also at risk,” Naidoo told reporters Friday.
“If residential land comes under question, and if property rights more generally come under question, that could have an extremely large systemic effect on the banking sector. The proposals are far too vague and uncertain for us to panic in any way.”
With general elections looming, President Cyril Ramaphosa has embraced expropriation without pay, but insists there won’t be a land grab. The populist Economic Freedom Fighters (EFF), which has won support from young voters in impoverished townships, wants all land nationalised.