UNTANGLING THE WEB
Land, land everywhere, but only 200,000 land titles. Zambia is not doing well according to the World Bank's Quality of Land Administration index, scoring just 7.5 out of a possible 30 points.
The laws surrounding property and ownership of land have significant consequences for a country. Firstly, and most obviously, title deeds can facilitate investment in property and the growth of the real estate market. Also, in terms of the individual, it is a proven trend internationally that land and home owners are more likely to invest their capital, and are also more likely to be granted credit since they can use their property as collateral. Without this right, access to capital to build a business, for example, is difficult to secure. From an administrative point of view, governments can use land surveys and registration systems to properly assess and even collect tax revenue.
On the whole, Sub-Saharan Africa's land registration systems do not impress. The Quality of Land Administration index shows that the region comes in last. In Sub-Saharan Africa, the average number of procedures necessary to legally acquire land ownership is high, at 6.2, and the process takes an average of 59.7 days to be completed. Compared to its neighbors, Zambia is slightly above the mean, with an average procedure count of 6.0 and a duration of 45 days.
However, among all the regions, Sub-Saharan Africa accounted for the most land reforms in 2015-16. A total of 28 countries from Southern Africa lowered transfer taxes and over government fees. One of these was Zambia, which decreased property transfer tax from 10 to 5% in 2016, making it more affordable to transfer property in the country. This was the most positive development in land administration the country has implemented since it computerized its land registry in 2009. Following this example, Guinea also reduced its tax from 10 to 5%, Senegal from 15 to 5%, Chad from 15 to 10%, Cote d'Ivoire from 10 to 4%, and Malawi from 3 to 1.5%.
In a conversation with TBY, Managing Director of Knight Frank Zambia, Timothy Ware, revealed that the government was looking at increasing the ability of owners to acquire deeds more quickly. He mentioned a joint project set up between the Ministry of Finance and the Zambia Property Owners Association, which pilots easy access to deeds in Lusaka.
Greater transparency in land administration via a more clear-cut and straightforward title deed system could aid the authorities in their quest to bring more of the population into a formal, tax-based economy. Benefits would include the facilitation of city planning, with urbanization mapping to provide more efficient services and more relevant infrastructure. Finally, better land management could avoid or minimize the effects of environmental or climate-related risks.
Granted, the government will lose out on some fiscal revenue owing to the lowered transfer tax, but this measure will guard against informal purchases born of reluctance to register transactions because of high cost. Informal purchases not only weaken the protection of property rights, but reduce overall potential revenue that can be accrued from property taxes. Thus, in all, the lowered tax could prove a key development in Zambia's property regulatory landscape.
But what further steps need to be taken to ease access to title deeds and therefore facilitate doing business in Zambia? As the World Bank's ratings show, the title deed acquisition procedure in Zambia is still unduly complicated. Additional fees and duties apply throughout the process, increasing levels of unnecessary bureaucracy, dissuading potential investors, and negatively impacting ease of doing business in the country.
Some improvements could be to follow in the footsteps of some other African countries that have set up fixed fees for property transfer. A leaf could be taken out of Ghana's book: the Western African country has pioneered one-stop shops to efficiently minimize interactions between agencies and businesspeople for such procedures. Zambia should also consider making the move to become 100% digital. Currently, 61% of the world's economies have property registries recorded on electronic files, and this has been proven to inordinately improve ease of doing business.
UNTANGLING THE WEB
TABLE OF CONTENTS
Year In Review
What A Year
Zambia has long been a bastion of stability in Southern Africa, and while its economy has been rocked in recent years by the falling value of copper prices, a devaluating kwacha, and high inflation, through the Economic Recovery Program the government has bold ambitions to right the ship.
read articleReview
Convoke, Confound & Collect
Squeezed between a rock and a rather hard place by the slowdown in Chinese demand for copper, by far Zambia's biggest export and government-revenue generator, President Lungu has been forced to get creative in his country's alliances to broaden revenue streams and lessen its dependence on the vagaries of one foreign market.
read articleGuest Speaker
Dr. Stergomena L. Tax, Executive Secretary, Southern African Development Community (SADC)
TBY talks to Dr. Stergomena L. Tax, Executive Secretary of the Southern African Development Community (SADC), on regional economic development, boosting pan-continental free trade agreements, and improving security through mutual development.
read articleInterview
Susan Sikaneta, Ambassador, Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa
TBY talks to Susan Sikaneta, Ambassador of Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa, on championing peace across the continent, advancing women's rights, and promoting Pan-Africanism.
read articleInterview
Sebastian C. Kopulande, CEO, Zambian International Trade & Investment Centre (ZITIC)
TBY talks to Sebastian C. Kopulande, CEO of Zambian International Trade & Investment Centre (ZITIC), on taming austerity, stimulating sustainable growth, and creating the framework to support entrepreneurship
read articleFocus: Zambia Plus
Adding it All Up
On October 20, 2016, at the 2017 Budget Address, Finance Minister Felix Mutati launched the government's economic recovery program, christened "Zambia Plus." The program is designed to spur domestic productivity, through strengthening ties and collaborating with external donors and developers.
read articleReview: Banking
Macroeconomics Rule the Roost
In its ongoing efforts to diversify away from one principal commodity, copper, the government fosters the development, standardization, and efficacy of the private sector. In doing so the systematic support of the financial universe, especially banks, is vital, as is the goal of financial inclusion.
read articleFocus: SME Growth
IMF support program
An IMF support program stands to provide Zambia with some much-needed discipline on its expenditure and operational efficiencies; however, many caution the need for Zambia to determine what it wants to achieve and how the program will benefit the country.
read articleInterview
Christabel M. Banda, Executive Director, Insurers Association of Zambia (IAZ)
TBY talks to Christabel M. Banda, Executive Director of Insurers Association of Zambia (IAZ), on the evolution of the local insurance landscape, raising awareness, and tackling challenges in the sector.
read articleFocus: Solar
Sunny Side Up
As power demand continues to rise and power production continues to fall behind, it's the same old story for Zambia, still wrestling with an ongoing energy crisis. Public- and private-sector drives are seeking to mitigate this deficit by activating the country's solar industry.
read articleInterview
Margaret K. Chalwe-Mudenda, Director General, Zambia Information and Communications Technology Authority (ZICTA)
TBY talks to Margaret K. Chalwe-Mudenda, Director General of Zambia Information and Communications Technology Authority (ZICTA), on new projects, the ZNDC, and expectations for the year ahead.
read articleInterview
Hon. Dora Siliya, Minister, Agriculture
TBY talks to Hon. Dora Siliya, Minister of Agriculture, on the investments being made in agriculture to enable agricultural households, diversifying Zambia's basket of produce, and making international markets more accessible for local producers.
read articleInterview
Hon. Charles R. Banda, Minister, Tourism and Arts
TBY talks to Hon. Charles R. Banda, Minister of Tourism and Arts, on the wealth of tourism destinations within Zambia, efforts to bring more visitors to the country, and what the Tourism Development Fund will contribute to developments.
read article