The State is the registered owner of the land in the rural areas of the former 'homelands', which cover 13% of South Africa, but contain one third of the people - the poorest in the country. Currently, the provinces with the most poor rural inhabitants (the Eastern Cape, KwaZulu Natal and Northern) are those which inherited the largest share of the so-called 'self governing and independent territories' of the apartheid state. Remnants of the old Bantu Areas Land Regulations of 1969 are still in place. Land is administered by different laws and authorities. The systems of administration and record keeping have broken down. This collapse includes loss of records, doubts as to which laws apply and the unauthorized issue of permits and other documents. The lack of clarity about land tenure inhibits investment, whether by outsiders or those who live in the area. Because of the uncertainty as to who has rights and who can take decisions, both government and private sector projects are stalled or slowed.

The replacement of the apartheid laws with modern land rights legislation is long overdue, but critics point to unsuccessful and costly attempts at tenure reform elsewhere in Africa. They say that government should not interfere with customary tenure arrangements in areas where the benefits from land administration would be low and the financial and political costs high.

These critics fail to grasp the nature of the reforms being proposed and the seriousness of the prevailing legal uncertainty, over-crowding and land-related conflict which distinguishes the former homelands from communal areas elsewhere in Africa. The belief that legal confirmation of people's land rights brings no benefits is certainly misplaced.

Research findings:

Although in many areas people do enjoy day-to-day tenure security, studies of existing land rights and land administration demonstrate the increasing breakdown of customary management arrangements.

The evidence from a large number of problem cases is that underlying conflicts emerge strongly whenever investment projects are proposed.

In addition, inefficient land use and ineffective management of common property resources arise from lack of clarity over land rights.

Lack of certainty and weak legal status constrain the land-based livelihoods of the majority and are a serious disincentive to entrepreneurs and to government to invest in development.

The cost to society of taking no action to resolve these problems is high.

Policy implications:

Legislation is needed to confirm the rights of those who occupy and use the land, to clarify who can make decisions, enjoy the fruits of investment in the land and provide for a system of land rights management which meets the requirements of the South African constitution.

The legislation should not introduce compulsory land titling nor undermine communal systems of tenure and land management. Where these are popular and effective, customary rights should be given legal protection and administrative support.

The economic benefits of the proposed measures would far outweigh the administrative costs. The most significant benefits would come from the stimulus that tenure reform would provide to land-based livelihoods in the communal areas, the economic importance of which has been consistently underestimated in the past.