Expropriation Act Fears Overblown, Says Sihlobo—Pushes for Free Trade Over AGOA

The recently signed Expropriation Act has sparked widespread debate in South Africa, with critics warning of land seizures without compensation. However, Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), argues that much of the outcry is exaggerated.

Speaking at a webinar hosted by Old Mutual, Sihlobo emphasized that the law is not a government tool for land reform and will only be used as a last resort.

Expropriation Act: What’s the Real Impact?

President Cyril Ramaphosa signed the Expropriation Act into law on 24 January 2025, replacing the 1975 legislation. The major controversial addition is the possibility of nil compensation in specific cases.

However, Sihlobo reassures that any decision on expropriation without compensation must go through the courts, ensuring fairness and due process.

“People forget that such a determination will be made by the courts, which need to consider whether it is just and equitable,” he explained.

Despite these legal checks, opposition groups such as AfriForum and Solidarity have raised concerns, while the Democratic Alliance (DA) has filed a constitutional challenge against the Act.

Land Reform and Agriculture: A Separate Issue

Sihlobo stresses that land reform is a broader process, separate from the Expropriation Act.

“Land reform runs on three legs – land redistribution, land restitution, and land tenure,” he explained.

The government has already acquired 2.5 million hectares of land, which can be transferred to beneficiaries with proper title deeds. If managed correctly, this could boost agricultural productivity and job creation.

“With blended finance and private sector collaboration, we think it could provide a 30% improvement in agriculture’s gross value added, leading to more jobs,” Sihlobo noted.

SA Agriculture Sees Record Exports Despite Challenges

South Africa’s agricultural sector faced droughts and biosecurity threats in 2024, but export figures still hit record highs.

“Agricultural exports exceeded $14 billion (R260 billion) for the first time last year, driven by the fruit sector,” Sihlobo revealed.

The sector remains heavily reliant on exports, with key trade partners including:

• Africa (40%)
• EU (20%)
• Asia (25%)
• Americas (6%)

With agriculture exporting 50%-60% of its total production, expanding new markets remains crucial.

South Africa Must Shift from AGOA to a Free Trade Agreement

A major concern for South African farmers is the future of the African Growth and Opportunity Act (AGOA), which grants duty-free access to US markets.

With political uncertainty surrounding South Africa’s eligibility for AGOA, Sihlobo believes the country must transition to a formal free trade agreement instead of relying on AGOA’s preferences.

“The roof won’t fall in if we’re out, but I want to underscore that the tariffs we are to face in the US are on average 3% if we’re out of AGOA,” he said.

Expanding trade with BRICS nations and securing additional markets should be a priority to protect South Africa’s agriculture sector from future trade disruptions.

Despite widespread fears, South Africa’s Expropriation Act is unlikely to lead to mass land seizures, and its implementation will be legally regulated. Meanwhile, the agricultural sector continues to perform well but must diversify its export markets to stay competitive.

The question remains: Can South Africa balance land reform with economic growth while securing stronger trade deals?

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