Land Grab May Intensify with EU Package to South Africa

The European Union (EU) will be covering the expenses previously funded by USAID in South Africa. It has taken steps to increase its investment in the region following the US withdrawal of aid.

On March 13, 2025, Ursula von der Leyen announced a €4.7 billion (approximately $5.1 billion) investment package for South Africa, primarily aimed at supporting the country’s “green energy transition” and “vaccine production”. This move came shortly after the US withdrew funding, signaling a shift in international support dynamics.

Will the EU Fund Land Grabs?

The EU’s financial engagements in South Africa have raised questions about their potential indirect influence on land-related policies, including the ANC’s latest land grab moves.

While these funds are not explicitly tied to land acquisition or redistribution, the green energy component could involve land use for projects such as solar or wind farms. Historically, large-scale renewable energy projects globally have sometimes led to accusations of “land grabs” when they displace local communities or repurpose agricultural land without adequate consultation or compensation. In South Africa, where the ANC’s notions of land ownership remain a racially charged issue devoid of facts, such projects could intersect with the country’s land reform agenda.

South Africa’s land reform policies, particularly the Expropriation Act signed into law in January 2025, allow the government to seize land for “public purpose” or “public interest,” potentially without compensation. This law aims to punish white South Africans. It is often claimed that 7% of the white population hold 72% of farmland, a gross distortion since all tribal land from the former Bantustans is still held by the government.

Tribal Land is Never Mentioned

The South African government owns a significant portion of tribal or communal land, primarily in the former homeland areas established during apartheid. As of the most comprehensive data available from the 2013 State Land Audit conducted by the Department of Rural Development and Land Reform, the state owns at least 17 million hectares out of the country’s 121.9 million hectares of the best farming land in a country routinely struck by severe droughts.

A substantial share of this is classified as tribal or communal land, particularly in regions like the Eastern Cape, KwaZulu-Natal, Limpopo, and Mpumalanga, where former homelands are concentrated.

Estimating Tribal Land Ownership

The former homeland areas, also known as Bantustans, is legally owned by the government but held in trust and managed through tribal authorities under a system of customary tenure. The 2013 audit noted that much of this land, especially in areas like the former Transkei (Eastern Cape), remains unsurveyed and unregistered, complicating exact figures. For instance, around 4 million hectares in the former Transkei were still being surveyed as of 2013.

An additional 7% of the country’s land (approximately 8.36 million hectares) was unaccounted for in the 2013 audit, with much of it presumed to be state-owned tribal land in former homelands, pending registration. This includes 1.2 million hectares in Limpopo and nearly 1 million in Mpumalanga.

The surveyor general at the time suggested that state ownership could be as high as 21% (around 25.6 million hectares) once all unregistered tribal land is accounted for. KwaZulu-Natal stands out, with nearly 50% of its land (about 4.7 million hectares) held by the state through the Ingonyama Trust, a unique entity managing communal land for the Zulu king and communities.

The EU’s trade relationship (€52 billion in 2024) and investments could indirectly bolster the government’s capacity to pursue land reform, including the expropriation of white farms. Since 1994, the EU has steadfastly backed race-based laws like Black Economic Empowerment against the white minority.

US President Donald Trump and Elon Musk, have labeled this as a “land grab,” as it discriminates against white farmers. The South African government denies this, asserting it’s a “constitutional process”, not arbitrary confiscation, and points out that no seizures have yet occurred under the new law as of March 2025 in a feeble attempt to silence US critics.

The EU’s March 2025 investment pledge came shortly after the US withdrew from the Just Energy Transition Partnership (JETP) and froze USAID funding.

Not Enough Money

The latest EU investment package will however not replace all USAID funding. USAID’s contributions in South Africa, such as the $453 million provided in 2024 through PEPFAR for HIV/AIDS programs and nearly $60 million for initiatives like “climate change” and “gender equality”, targeted specific DEI goals.

The EU’s package, while substantial, claims to be focusing on economic and infrastructure priorities rather than fully bridging the gap left by the USAID freeze, which has disrupted DEI programs across the continent.

The EU has explicitly stated it cannot fully fill the funding void left by the US. A European Commission spokesperson noted in February 2025 that while the EU remains committed to its humanitarian budget ($1.9 billion for 2025, with $510 million for Africa), “the funding gap is getting bigger, leaving millions in need. The EU cannot fill this gap left by others.”

This suggests that while the EU is stepping up its engagement with South Africa, it is not positioned to comprehensively cover the scope of USAID’s former expenses, such as disruptions to HIV treatment. South Africa’s ARV program is the world’s largest. With the EU’s 2025 investment, these firms’ revenue will nevertheless be boosted.

DEI Employees Stranded

South Africa and other African nations are thus facing pressure to find alternative funding sources or adjust domestic budgets, as the EU’s investment, while significant, aligns more with long-term EU strategic goals. The situation remains fluid, with calls for “coalition-building” among other donors and African governments to mitigate the impact of the USAID cuts.

The €4.7 billion package is a combination of grants, loans, and private-sector investment mobilized through the EU’s Global Gateway initiative, a flagship program designed to counterbalance China’s Belt and Road Initiative and BRICS. While the exact allocation hasn’t been fully itemized in public statements, the EU has outlined two primary focus areas.

Green Energy Transition: A significant portion of the funds is earmarked for supporting South Africa’s shift from coal-based energy to renewable sources, aligning with the Just Energy Transition Partnership (JETP). The JETP, initially launched in 2021 with $8.5 billion from the US, EU, and other partners, saw a U.S. withdrawal in early 2025, prompting the EU to step in with this new commitment. The funds will likely support renewable energy projects (e.g., solar and wind), grid modernization, and coal plant decommissioning, with an emphasis on job creation in affected communities.

Vaccine Production: This builds on prior EU-South Africa collaboration, such as the 2021 partnership with companies like Aspen Pharmacare to produce COVID-19 vaccines. The investment will fund research, development, and manufacturing infrastructure.

The European Investment Bank (EIB), a key player in the Global Gateway, is expected to provide concessional loans to South African entities, including state-owned enterprises like the already poorly managed Eskom (for energy projects) and private firms in the health sector.

The EU is South Africa’s largest trading partner (€52 billion in trade in 2024) and a major investor (€25 billion in FDI stock).

Implementation and Timeline

The funds are expected to be disbursed over several years, likely through 2030, in line with JETP and Global Gateway timelines. Initial projects could begin in late 2025, with the EU and South African government finalizing specific agreements in the coming months.

Oversight will involve joint EU-South Africa committees, ensuring alignment with the ANC’s notorious National Development Plan and climate commitments (net-zero by 2050).

Unlike USAID’s broad focus (health, education, gender equality), the EU package is smaller emphasizing energy and vaccines. While €4.7 billion is significant, it’s a fraction of the $8.5 billion JETP total and doesn’t fully offset the US retreat. The EU has acknowledged it cannot single-handedly bridge the wider funding gap in Africa.

That may be why the EU will be focusing on land issues.