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Constitutional amendment spells doom for economy

By Alex T Magaisa

THE proposed constitutional amendment in relation to property ownership will effectively close one of the few remaining opportunities for economic revival in Zimbabwe.

In an age of the free market and open economy, Zimbabwe is regressing by adopting frightening characteristics of the discredited closed economy.

Clause 16B of the Constitutional Amendment (No 17) Bill is one that any self-respecting parliament should never permit if the legislative body value the economic interests of the country.

Contrary to the beliefs of its proponents, the nationalisation of land is based on a fallacious understanding of the nature of African society and is quite simply poor economic policy.

It is necessary to give a simplified summary of the key legal and practical effect of Clause 16B of the Constitutional Bill. First, it effectively enables the nationalisation of all agricultural land and gives power to the state to compulsorily acquire land “for whatever purpose”.

There is therefore no limit to the purpose for which land may be acquired by the state and presumably it may even be taken for private interests.

This exposes the process to abuse.

Secondly, it prohibits any claims for compensation for acquired land except in respect of improvements.

Third, it ousts the jurisdiction of the courts in respect of challenges against compulsory acquisition and only permits challenges against the valuation of improvements.

These are highly dangerous clauses, encroaching as they do on one of the fundamental rights which play a key role in the economic situation of any country.

The rationale for nationalising agricultural land has not been clearly defined but it is clearly a retrogressive step.

One question that arises is whether or not at a conceptual level the institution of private ownership is alien to African societies as there is a view that seems to suggest that traditional African society is inherently communal.

At the heart of the problem in contemporary Africa is the apparent conflict between the so-called traditional (African) and modern (Western) values.

It is often suggested that while traditional society values communal ownership, Western society privileges individualism and private ownership.

At the national level, this value of communal ownership is expressed in the form of nationalisation with the state purportedly acting as the guardian of people and custodian of property for the people.

It is often argued that there is no place for individualism in African society, and because communal ownership is purportedly for the good of all members of society, we must make it the foundation of our relationship with property.

This is not only wrong but it is at variance with the realities of modern African societies.

Opponents of private ownership conveniently forget that the so-called traditional African society is not static.

Likewise, the values of that society are not fixed in time but are dynamic and change in form and character in response to changes in society.

From that perspective, it is clear that African society is not what it was in the 19th century and similarly its values have changed.

The values of individualism and private ownership have been embraced by both rural and urban Zimbabweans and co-exist with the aspects of communalism that may still be the basis of relations between people.

The acquisition and protection of ownership of things are some of the key characteristics of Zimbabwean society today.

Both movable and immovable assets are the subjects of Zimbabweans’ desire to own and protect individual capacities.

When the state justifies nationalisation with reference to traditional values, it is taking society to an age that many can hardly relate to.

Whatever our denials we, including the leaders, have embraced the so-called Western value of private ownership.

By this constitutional amendment, the state is simply imposing a system that is discredited, alien and at variance with modern society’s values.

Given the fashionable reference to all things Chinese as the alternative, it is perhaps ironic that Zimbabwe is going in the opposite direction compared to our Eastern friends.

In 2004, the Chinese parliament endorsed landmark changes to the constitution to enable it, for the first time since the 1949 Revolution, to protect the right to private property.

This represented the decline of a key tenet of communist China, which by and large demonstrates the Chinese’s calculated embrace of capitalist characteristics, albeit with caution.

The disaster that followed nationalisation of land in Tanzania under Mwalimu Nyerere is well documented.

One could be tempted to remark that Zimbabwe is experimenting. It is not. By this amendment, it is simply learning from others’ mistakes to make similar ones.

The Chinese and others have embraced private ownership because empirical evidence shows that it is a necessary tool for promoting economic development. Pressure for reform came also from the Chinese business community, whom ironically, we are trying to attract.

The ability to own things drives the human being to be inventive and to invest labour and capital into more production and efficiency. Ownership facilitates freedom as it gives a person personal jurisdiction of his property.

The state fails to realise that besides skill and experience, the white commercial farmers were able to carry out viable business on the farms because they had title to the land.

The availability of title meant that they were able to participate in the financial markets as commercial businesses, thereby benefiting from the instruments designed specifically to meet their needs.

This falls away with nationalisation – effectively wiping out the economic value of land in the markets.

The amendment will undoubtedly cause a major setback to any economic turnaround efforts.

It sends out the message that Zimbabwe is not prepared to embrace free market economics and protect investor rights. Who would want to invest in a country where their security of title is constantly under threat?

In all industrialised and emerging economies, the right to private property is held in high esteem and given ample protection.

The right of the state to acquire land is generally accepted but the state is held accountable for its actions and laws that affect property rights.

In this respect Clause 16B has serious defects.

First, by ousting the jurisdiction of the courts it is effectively violating the time-honoured principle of separation of powers between parliament, the executive and the judiciary.

This separation is crucial for the purpose of maintaining checks and balances against the abuse of power by any of the branches of government.

The judiciary acts as a bulwark against the encroachment into the rights of citizens by the legislature and the executive.

This is more pertinent in many African countries in cases where the legislature is effectively captured by the executive that is often too powerful.

In Zimbabwe, the constitution already confers rights to approach the courts for redress and ousting that jurisdiction goes against the constitutional order.

Worse is that Clause 16B tries to remove the right to the protection of the law that is protected under Section 18 of the constitution.

The amendment fundamentally disturbs the institutional arrangements that are necessary for the protection of the right to property.

Secondly, two of the paragraphs seek to legitimise the acquisitions of land without compensation that have already taken place or might take place before the clause becomes law.

This is known as an ex post facto law, that is a law that seeks to apply to events that occurred before its enactment.

There is in most civilised states a general prohibition against passing such laws, which are essentially retrospective.

They are unfair because they seek to take away rights to which citizens were legitimately entitled at the relevant time.

Law must be certain to all citizens and it is unjust to place one at a disadvantage after the event has passed.

In some countries this prohibition applies only to criminal laws but there is no reason why a similar approach should not apply to civil laws.

Clearly, this retrospective amendment goes against the legitimate expectations of citizens.

Under the constitution, they had legitimate expectations to approach the courts of law for redress at the time of acquisition.

They also had legitimate expectations to receive fair compensation for their property.

This amendment cannot now purport to take away those legitimate expectations – it would be a clear violation of international law.

The danger of allowing a change of this character will in future open the way for the state to violate the law with reckless abandon, only to provide a cover of legitimacy by enacting retroactive constitutional amendments.

In conclusion, the amendments will do more harm to the country in the long term that the framers seem to conveniently overlook at this stage.

The confidence of investors will decline further while the credit rating of the country and businesses will be drastically reduced.

The land question is not simply a political matter nor is land simply needed for sentimental reasons.

It is a key economic issue and sadly, this amendment is based on misdirected economic policies.

The real revolution will manifest when people who get land are given title to it – to use it as they wish and when a person has freedom over their property, he is more likely to put it to better use.

Not when it is at risk of compulsory acquisition without recourse to the courts. James Madison once stated that, “In framing a government, which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”

In Zimbabwe, by ousting the judiciary as far as land is concerned, clearly the executive is rejecting control.

Parliament must think long and hard before passing this dangerous amendment into law for it is a mortal danger to the economy.

* Dr Magaisa is a specialist in Corporate and Financial Services Law. He can be contacted at wamagaisa@yahoo.co.uk

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