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Parliament Review of Land Expropriation Weakens Rands Gains

There has long been a push by political parties to look at Land Expropriation without financial compensation (taking land and not paying for it). Recently it has come to the fore at parliament and a decision was made for a committee to be set up to review the Constitutionality and current SA laws that might influence government policy and law creation on the topic. Different political parties have different views on the matter. Some want radical land grabbing like was done in Zimbabwe and others want less extreme measures.

‘the Rand was hard hit by even a hint of possible land expropriation and weakened against the Dollar’

Recently a motion at parliament initiated the process to review land laws while not actually doing anything. Even though this is merely a ‘look and report back‘ kind of move, the Rand was hard hit by even a hint of possible land expropriation and weakened against the Dollar, back to “pre Ramaphosa” strength.

The banks (as big holders of land and bonds) are one of the most exposed groups who might one day be affected and could easily face losses in the region of R180 Billion.  Any future legislation changes on this topic will have far-reaching ramifications and government will have to try to walk a fine line to try to maintain financial stability. Many laws would potentially have to be amended such as the National Credit Act.