March 9, 2006

Land tax brings in millions, says minister / Namibia selected for US aid

Government raked in a N$27,9 million through land tax on commercial farms 2005, Lands Minister Jerry Ekandjo has announced. According to him, 15 farms totalling 119.686 hectares were acquired by means of the willing-seller, willing-buyer principle over the same period at a cost of N$15,3 million. Yet only 25 families (about 150 people) were resettled on former commercial farms in different regions. The purchase of the farms was regarded as an improvement considering that for the first 15 years, the Namibian Government bought 145 farms with a combined area of 932 .864 hectares for N$130,7 million.
Government has complained that the price of land has increased 200 per cent since 1990.
Only about 1.538 families have been resettled on freehold land and 4.352 families in the communal areas. A land tax was introduced in 2004, with citizens paying 0,75 per cent of the value of undeveloped land for the first farm. This percentage increases 25 basis points for every farm. Foreigners are taxed at 1,75 per cent for the first farm and 0,25 per cent for every additional farm.

In the meantime, a delegation from the United States met Government officials and representatives of the private sector and civil society for discussing the Millennium Challenge Account (MCA) for which Namibia was recently selected. The MCA is a US-administered account to help poor countries with a "results-driven approach to development with a focused mandate to reduce poverty through sustainable economic growth". The account is an incentive for policy reforms, which the US rewards with additional resources. Countries qualify for the MCA account if the US regards them as being governed justly, investing in people and encouraging economic policies and freedom that can lead to economic growth. Currently there are 23 countries around the globe eligible to receive funding.

MCC Managing Director Maureen Harrington said the ball was now in Namibia's court, as the country was expected to submit a proposal to the MCC within six months, which would be assessed for approval. She made it clear that being selected as an eligible country did not guarantee an MCA grant. A strict assessment had to be made first before a country qualified for funding. She explained that development priorities in the proposal could range from an education programme to access to quality healthcare, rural development or improving the business climate. "We invest in programmes that will give MCC and the people of Namibia the returns we all want on this investment - reduced poverty and sustainable economic growth. We will evaluate the proposal by asking, first, whether it identifies Namibia's obstacles to growth and sets out a strategy for how the proposed programme will tackle those obstacles, and second, whether it reflects the goals of the people of Namibia, not simply one Ministry or sector," she said. Other countries that have been selected for the MCA include Mozambique, Lesotho, Madagascar, Tanzania, Senegal and Burkina Faso. (The Namibian, Windhoek)

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