South Africa’s Expropriation Bill, which supports expropriation without compensation (EWC), is facing significant backlash due to the potential threats it poses to private property rights. The Institute of Race Relations (IRR) warned that the legislation could put the livelihoods of exporters and their employees at risk.
The expropriation bill contradicts the requirements of the African Growth and Opportunity Act (AGOA). AGOA provides tariff-free market access to countries moving toward market economies and protecting private property rights. The proposed legislation, however, introduces EWCs for reasons such as the appropriation of misappropriated buildings and encroached land.
At the AGOA Forum in Johannesburg, the risk of South Africa exiting AGOA due to EWC provisions in the Expropriation Bill was largely overlooked. To be eligible for AGOA, an African nation must protect private property rights. However, the expropriation bill approved by the National Assembly, which is expected to be passed before the 2024 elections, threatens these rights by approving EWCs on various grounds.
Despite no public warning from U.S. delegates, some U.S. lawmakers have expressed concerns about the bill’s impact on U.S.-South Africa trade. Congressman Jim Baird questioned the potential implications of the bill, while Congressman John James called EWCs a “disastrous policy” that threatens private property rights protected by Africa’s Constitution from South.
The Biden administration, known for its strict AGOA eligibility criteria, recently withdrew several African countries from potential benefits. This decision highlights the seriousness with which the US government views compliance with AGOA criteria. Although South Africa’s Expropriation Bill has not yet been passed into law, its potential effects on commercial relations and private property rights are already raising concerns among stakeholders.
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