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Cyril Ramaphosa announced this week that his government is to press on with a plan to overhaul how land is owned.
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The ruling ANC party is to put through parliament an amendment to the constitution that would permit the seizing of land without expropriation.
South African President Cyril Ramaphosa announced this week that his government is to press on with a plan to overhaul how land is owned in the country, a move that has alarmed some investors in Africa's most developed economy.
Ramaphosa said Tuesday that the ruling African National Congress (ANC) party is to put through parliament an amendment to the South African constitution that would permit the seizing of land without expropriation.
The bulk of South Africa 's land is owned by its minority white population, a vestige of its colonial past. Although apartheid ended almost 25 years ago, South African society remains one of the most unequal in the world.
"It has become pertinently clear that our people want the constitution to be more explicit about expropriation of land without compensation as demonstrated in the public hearings," said Ramaphosa in a televised address.
He said that the proposal would "promote redress, advance economic development, increase agricultural production and food security."
But, some investors are fearful that constitutionalizing land grabs would undermine business stability and economic growth, which has remained subpar thanks to years of corruption under former President Jacob Zuma's administration. South Africa's already-high unemployment rate rose in the second quarter of this year to 27.2 percent, it was announced Tuesday.
The volatile rand dropped to a one-week low of near 13.40 per U.S. dollar overnight after Ramaphosa's announcement, according to Reuters.
Ramaphosa is walking a tightrope
Building bridges with the investment community has been of paramount importance to Ramaphosa since he took power in February . The president, himself a business tycoon and one of South Africa's richest men, is on a mission to raise $100 billion in foreign investment.
But, the president is walking a tightrope between satiating investors and the South African electorate, which is due to head to the polls next year.
South Africa-based analysis firm NKC African Economics described the announcement as "populist rhetoric with no clear answers," in a note published Wednesday.
In neighboring Zimbabwe, land-grabbing is a now notorious policy associated with former strongman leader Robert Mugabe as the country adjusted to black majority rule. In the early 2000s, Mugabe pushed thousands of white farmers off their land to the result of food shortages, hyperinflation and violence — as well as contributing to the country's international ostracization.