Easy way to give poor South Africans land and houses and make them property owners

Bank Zero chairman, Michael Jordaan, says giving title deeds to people who live on communal lands is an easy way to make them property owners.

Jordaan is one of South Africa’s most respected business leaders. He served as FNB’s CEO from 2004 to 2013, during which FNB became the country’s leading bank.

After his tenure as FNB chief executive, he became a venture capitalist. Once again, he excelled, helping to build top businesses, including Rain, Bank Zero, and Valr.

He recently addressed the issue of land reform in South Africa, where he proposed giving title deeds to people who live on communal lands.

He argued that land reform is a crucial economic and political issue that requires urgent attention.

“During apartheid, a big part of the black population was removed from their land and confined to homelands,” he said.

“Barring black South Africans from land ownership in large parts of the country resulted in exclusion from economic opportunities.”

He said land is important for livelihoods and food security and that it holds a deep symbolic meaning for many people.

Jordaan said there has been some progress. 24% of farmland has been redistributed or land rights restored since 1994, close to the government’s 30% target.

However, Jordaan said that there is one major initiative that would significantly impact land reform and property ownership.

This is granting legal title to many millions of families who live freely and openly on land that, notionally, does not belong to them.

Approximately 13% of South Africa’s land is held in trust by tribal authorities. Approximately 17 million people, or one-third of the population, reside on these communal lands.

“Allocating title deeds to these subsistence farmers would turn impoverished rural dwellers into property owners,” he said.

Newly titled farmland could be leveraged for development loans or eventually even sold. This would unlock and unleash a massive amount of capital for growth.

“In one fell swoop, a third of our citizens would build wealth through property appreciation while having stability and control over their livelihoods,” he said.

“They could make changes and improvements to their properties without the threat that their living rights could arbitrarily be taken away.”

Making people land- and homeowners

Jordaan said that a deal will need to be struck with the tribal authorities to compensate them for losing their vested interests in administering these lands.

The individuals affected could also become landowners themselves. Or they could receive a monetary incentive to relinquish control.

Apart from tribal land, other aspects of titling also need to be tackled, especially the 5 million South Africans living in informal settlements.

“Giving title to residents of informal settlements promotes investment, access to credit and socio-economic integration,” Jordaan said.

Again, there may be a need to compensate some private landowners. This has been done successfully by other countries.

In Tanzania, the government was able to grant 200,000 titles to unplanned settlements in Dar es Salaam, while compensating previous landowners.

Rwanda employed a participatory and low-cost approach to deliver 6.7 million titles in under three years.

In South Africa, the land in informal settlements is primarily state-owned, which makes it much easier to get going.

Ideally, these titling programmes need to be implemented as part of a comprehensive improvement of socioeconomic conditions.

The improvement includes measures such as giving people access to data, training, education, and transport.

“We need not wait until everything is perfect. Let’s get going with a massive titling project,” Jordaan said.

“It is completely possible for an additional 23 million South Africans to live on land that they, or a family member, own outright.”