Symbolism overtakes financial sector

13Oct 2018
The Guardian Reporter
The Guardian
Symbolism overtakes financial sector

REVERBERATIONS are being heard in the rest of Africa on the manner in which South Africa is grappling with its land reform issue, namely to shift the matter from a solid economic policy standpoint to one of symbolism.

South Africa is currentlgrappling with its land reform issue, namely to shift the matter from a solid economic policy standpoint to one of symbolism.

Here there are poetic parameters like the land being a repository of the dignity of a people, an eternal spatial context where tears, sweat and blood have been deposited and where current generations team up with those who passed before them.

It is in sum a reaffirmation of national identity to keep tribal and clan land dispositions as they are, simply.

The matter came to a head when President Cyril Ramaphosa, under pressure from the party’s left wing now increasingly drawn to Julius Malema’s Economic Freedom Fighters group, and on the basis of creeping nationalism and protectionism avowedly espoused by US President Donald Trump takes up the cue.

He knows that the inclination towards land reform is a better gatherer of votes than sticking to the Nelson Mandela line of thinking (as well as his successor and earlier, vice president Thabo Mbeki, which former president Jacob Zuma refused to throw away as a legacy and now Ramaphosa is toying with that idea). How it plays out is a bit more complicated.

That same position is now being heard in Tanzania, where CCM Secretary General Dr Bashiru Ally was lately engaged in a dispute with ACT-Wazalendo leader Zitto Kabwe, questioning if the latter’s position on land policy (ease of transferring occupancy title, thus land ownership as such, in the popular language of NGOs).

Unlike the dispute in South Africa which relates to land as an isolated or special issue, in Tanzania there is also a creeping reiteration of socialism as the policy outlook that the current authorities are pursuing, at least in the view of the CCM secretary general. President John Magufuli has talked about realizing Nyerere’s Tanzania, not socialism.

While to some general description the two are similar or the same, as a matter of fact there is a radical nuance, expressed in an interview with CUF national chairman Prof. Ibrahim Lipumba, whose thinking on the matter is closer to the president’s intuitions than the secretary general.

He said that Mwalimu laid great emphasis on national unity, and to cement that unity he was keen about justice and equality that leads to a public sector bias in policy and certain other policy affirmations, including restraints on land transfer or elevation of occupancy titles to freeholds.

 But it doesn’t quite add up to socialism although it is clearly anchored in left liberalism as such.

The general implication of this creeping nationalism about land, ejecting out of the window all potential moves to ease elevation of occupancy titles to freehold, or 66 and 99 year lease is clear.

The slow pace of Africa’s economic growth will deepen, in the sense of growth that scarcely overtakes population growth (net GDP rise), as the rate at which Diaspora finance will be able to purchase assets is limited to housing construction.

Land for that purpose is in purchasing urban plots from individuals, but industry requires large outlays with land itself as the basis for credit. It isn’t possible to secure credit on land where one has an occupancy title rather than ownership.

When such credit is forthcoming it is short or medium term in nature, in the sense that it is land that can obtain another buyer rapidly were the borrower to fail, and recent experience shows that local banks exceeded themselves in that direction.

When fiduciary conditions changed and there was less consumptive finance in public expenditure starting late 2015, the following year many banks started to feel the heat as individuals borrowing expecting business to take firm hold on the background of a consumptive economy reeled backwards.

The past year saw several banks folding up as the collateral that was deposited often finds no buyers capable of meeting the price.

That is why the current policy conjecture is quite interesting from the viewpoint of the history of economic growth, as the depression in property prices due to lower levels of public consumption at bureaucratic levels in particular ought to have seen plenty of foreign (Diaspora) finance taking up plenty of such assets.

It is however predictable that a silent process of that inclination is likely to be taking place, with local bigwigs taking up more and more property, but reports show that they tend to store up finances in foreign banks, for security.

Property assets are unlikely to rise unless fiduciary conditions change, and relationships with foreign investors noticeably improve.

What is a bit surprising is that the rural sector that urban policy makers are seeking to shore up as the demographic map of identity portions (tribes and languages) are the grave diggers of that policy (to speak like Karl Marx).

The youth in rural areas seek any opportunity to change their location to urban areas, though the pressure is decreasing with tarmac roads reaching many far end rural settings, and motorcycle riding as a business is giving a semblance of employment to many youths upcountry.

Relative urbanization of villages by electricity, TV and motorcycles reduce steady migration to urban areas to escape what Marx said was the ‘idiocy of rural living.’

Without Diaspora financing being able to purchase assets on a long lease basis and obtain credit for industries, it is this sort of job creation that will spread out, with its kindred culture of sports betting and sprawling city centre street corners where scores of youths live by frequent loading and unloading of vehicles at commercial centres.

The dream of industries as such will be put off until the radical nationalism in vogue at present subsides and the 1954 universalism of ‘all men are my brothers and Africa is one’ takes precedence, and is actually put to policy engagement.

Such ideas were unpopular at the end of the second phase (and president Mwinyi didn’t really go that far); radicals trust we don’t need Diaspora funds to industrialize. Pride cometh before the fall.

Top Stories