Economic impact of SA court ruling

THE Supreme Court of Appeal in South Africa last week ruled against Zimbabwe’s appeal against North Gauteng’s High Court registration and enforcement of a ruling by the Sadc Tribunal that Zimbabwe’s land reform laws and policies were racist in nature, and that displaced farmers were entitled to full and proper compensation for their expropriated farms.

Eric Bloch Column



The ruling confirmed the validity of attachment of property owned by the Zimbabwean government in Cape Town, to be disposed of by public auction with proceeds going to the three former Zimbabwean farmers deprived of their farms and initiated the legal actions with the Sadc Tribunal, and subsequently to the North Gauteng High Court.


In 2000, Zimbabwe  embarked on land reform, pursuant to enabling legislation promulgated almost a decade previously.  In terms of the legislation, all rural lands became state property in total disregard of prior ownership rights and title deeds.


The state began eviction of non-Zimbabwean indigenous occupants of the farms without any consideration of the consequential near-collapse of agricultural production, converting Zimbabwe from being the regional bread-basket to becoming heavily dependent on non-affordable imports.

Similarly, government failed to consider the resultant loss of employment for over 300 000 farm workers, reducing them and their dependants to immense poverty and deprivation.  Almost two million Zimbabweans were reduced to extreme hardships and endless struggles to survive, over and above those in other economic sectors similarly jeopardised by downstream economic prejudices triggered by the substantial collapse of agriculture.

With the state-enforced dispossession of thousands of productive, non-indigenous farmers, many war veterans, politicians and those with strong political links took advantage of the circumstances for self-enrichment.


They forced non-indigenous farmers off properties which they had for decades operated productively, and reduced those properties to desolate barren lands.  In all too many instances the land invaders resorted to violence to achieve their objectives, and having gained occupancy of the farms sought temporary enrichment by selling equipment thereon, such as irrigation pumps and pipelines. They thus deprived the farms of essentials necessary for viable agricultural production.

Attempts by the displaced farmers to seek justice in Zimbabwe proved totally fruitless, and eventually some sought recourse in to international courts. Such actions included placing the issue before the Sadc Tribunal, with 77 affected farmers seeking justice through the court.


The court ruled in November 2008 that Zimbabwe’s land reform was racist, and the affected farmers were entitled to full compensation. Government ignored the court’s findings, resulting in the Tribunal issuing a contempt ruling and awarding costs against it, but again the Tribunal’s ruling was ignored.


This resulted in three of the distressed farmers applying to the North Gauteng High Court in South Africa for an execution order, which was granted, enabling the attachment of property of the Zimbabwean government in South Africa.  This led to Zimbabwe’s appeal to South Africa’s Supreme Court of Appeal, but the court of five judges unreservedly ruling against the appeal.

The economic impact of the judgment will be pronounced. In the event that government belatedly acknowledges the criminality of its actions, it will now have to address payment of just and due compensation to all that were deprived of that for which they had worked for most of their lives.  Inevitably, the payment of compensation would have to be phased over a period of time, for by its own recurrent admission the Zimbabwean fiscus is bankrupt.


Justice (frequently anathema to government), also dictates that the compensation should include market-rate interest, calculated from dates of farm expropriations to dates of payment of the compensation.

However, in order to fund the compensation and interest payments, government will either have to curtail other expenditures (many of which are in any event unnecessary), or increase taxes (many of which are already excessive). Such increases would be beneficial as they will enable the state to progressively settle its debt, but would be prejudicial to the beleaguered economy.



Another option for government, which it would be reluctant to pursue, is to dispose of various state assets including many of the parastatals, surplus state-owned residences, and innumerable motor vehicles.  Yet a further option that government could pursue is to reduce the number of ministers, the public service, and the international travel expenses it incurs.

Government must also anticipate that, unless it now acknowledges liability to the thousands of displaced farmers, it will undoubtedly be confronted by further litigation by  displaced farmers, with concomitant attachment of other external assets and those in Zimbabwe.


Such legal actions would not be confined exclusively to the South African courts but in diverse international courts, which would indisputably have regard to the determinations of the Sadc Tribunal and the South African Supreme Court of Appeal.


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