Integrated Land Management Institute (ILMI)

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Leasehold as a Vehicle for Economic Development
(2017-03) Werner, Wolfgang; Bayer, Charl-Thom H.
Secure tenure and registered land rights are widely believed to be necessary for access to credit, well functioning land markets and economic development. As a result Namibia introduced long term leasehold rights over communal and commercial land for resettlement purposes in order to address preindependence imbalances in land holdings. The purpose is to bring the resettled beneficiaries into the mainstream of the economy, but this has not happened. The research analysed the institutional framework for resettlement allocations and the transaction costs in order to understand the impact of leaseholds on the beneficiaries ability to access credit and mobilise investments. The findings suggest that the transaction cost were low when compared with similar transaction internationally, but high in comparison with the production value of the parcels of land. The lack of resources available to the beneficiaries and their resultant inability to service loans is a major contributor to the lack of economic development. Poor access to information on the registration requirements for leases, combined with the requirements from financial institutions and the lack of a market for leasehold rights meant that beneficiaries are not able to register their leases in order participate meaningfully in economic development.