We need to fund land reform like we fund infrastructure and other long term projects, writes Peter Setou
The achievement of meaningful and sustainable land reform in South Africa hinges on a fundamental shift in our approach to its funding and post-settlement support.
The challenge remains that land reform has historically been treated as a once-off transactional event, the land transfer, rather than a multi-phased investment in a productive, long-term asset.
This is evident in the striking disparity, for example, between the sustained, multi-year funding cycles of major infrastructure projects such as roads, water and energy etc, and the fragmented approach to land reform.
While significant progress has been made in land redistribution – approximately 9.5 million hectares transferred through redistribution and restitution since 1996 according to the Department of Agriculture, Land Reform and Rural Development’s Annual Report – the critical measure of successful restitution should not be hectares transferred, but hectares made productive.
Land, once transferred, requires capital investment to become a viable, productive asset. Treating land reform in the same way as national infrastructure means recognising that productive land requires post-settlement investment in elements like water infrastructure, rural electrification, access roads etc. It would also require a long-term commitment to technical and other forms of support, training and mentorship.
Without those, transferred land often fails to generate income, create employment, or strengthen local economies, limiting its ability to drive meaningful economic and social change.
There is a need for a move away from reliance solely on the national fiscus’s allocation, towards other diverse and innovative funding models. Research by The Institute for Poverty, Land and Agrarian Studies (PLAAS) has long argued that land reform cannot succeed without access to blended finance schemes, state grant-based models, and corporate and agribusiness partnership models that supports production beyond land transfer.
The Community Private Partnership (CPP) model is one of these innovative approaches. It produces successful outcomes, and it needs to be taken to scale if we are to achieve sustainable land reform. Vumelana champions the CPP model, which demonstrates how proper planning and partnerships between communities and private investors can unlock the value of restituted land.
Through CPPs, communities and private investors work together. The private partner provides the necessary capital investment, skills and market access, while the community provides the land and retains ownership.
With proper support, communities can generate income, create employment, and strengthen local economies. These stem from careful planning and sustained support, the same principles that apply to successful infrastructure projects, such as clear roles, technical guidance, and long-term commitment.
The National Treasury recently launched a new infrastructure and development finance bond which will be issued to the market under government’s domestic borrowing programme. It could be an option to set up a similar fund dedicated to land reform that is insulated from annual budgetary pressures. It would be a dedicated, ring-fenced fund, potentially capitalised through a specific national development levy or other innovative financing mechanisms.
Those funds would be explicitly earmarked for post-settlement enterprise development grants, technical advisory services, capacity building and maintenance of shared infrastructure assets.
The government has an important role to play in creating the conditions for this type of sustained investment. This could include providing consistent adequate funding for post-settlement support and strengthening the institutions that oversee land reform.
Development partners, the private sector, and civil society also have a vital role in supporting this work through skills development, advisory services, and collaborative initiatives that build capacity at the community level.
Applying the infrastructure model to land reform would require a multi-year budget commitment with funds earmarked across a five to 10 year planning horizon, ensuring consistency beyond annual budget cycles.
South Africa has already demonstrated that infrastructure investment can drive development when supported by coordinated planning and adequate resources. The same could be true for land reform.
Land reform is not only about correcting historical injustices; it is also about building a more inclusive and resilient economy. To achieve this, we need to think differently about how we fund and support it. If we apply the same level of strategic planning, financial commitment, and long-term support that we give to infrastructure and other long-term projects, we will begin to see land reform deliver the sustainable outcomes that communities have waited so long to realise.
Peter Setou is the Chief Executive of the Vumelana Advisory Fund (Vumelana) a non-profit organisation that was established in 2012 to help communities in the land reform programme to put their land to productive use through its Community Private Partnership (CPP) model. Vumelana funds advisory services to structure commercially viable partnerships between communities and investors that create jobs, income and skills. Vumelana aims to demonstrate the value of partnerships as a means of fostering productive use of restored land, providing linkages to finance, skills and networks needed to make effective use of land and at the same time encourage a more inclusive agenda for land reform.
For more information about the organisation, visit www.vumelana.org.za . To contribute to Vumelana’s work, email info@vumelana.org.za
