IRIN Focus on land reform proposals

Recently released government land reform proposals, which prohibit the foreign ownership of land, have received a cautious welcome in Malawi. Like its southern African neighbours, Malawi is under great pressure to empower its impoverished, mainly rural population. Like its neighbours it is looking at the ownership of land as one way of doing this. In a draft policy released in September, the Ministry of Lands said it aimed, among other things, to "remove most of the pressing land problems that have created tenure insecurity and undermined speedy and transparent land transactions in Malawi". "In many cases," according to the draft policy, "the inadequacies of existing laws, delays in land administration, arbitrary applications of the public interest criteria, constraining inheritance laws and uncertainty regarding the strategies for dealing with land pressure have all operated to discourage needed investments and the nation's ability to eliminate poverty and pursue social harmony. "Fundamental measures and processes contained in this National Land Policy will equip Malawi to minimise, if not eliminate the most constraining land problems and bring progress and prosperity to all." The policy, covering a wide range of issues from ownership to inheritance laws, and from land use to the development of customary land, has generally been welcomed. However, its prohibition of foreign land ownership has raised some questions. Harry Potter, of the British government's Department for International Development (DFID) summed up the common view when he told IRIN on Wednesday: "Obviously the devil will be in the detail." According to the policy, which has been passed by a cabinet committee but has not yet gone through parliament, non-citizens were to be prevented from acquiring new land from 1 September 2001. "Non-citizens will no longer be allowed to acquire or transfer title to any new freehold estate not previously owned and legally registered to a non-citizen prior to 1 September 2001," the policy says. "Non-citizens currently in possession of freehold estates in Malawi will, in seven years following the coming into effect of this policy, obtain Malawian citizenship in order to retain their free ownership. Failure to naturalise will automatically trigger expropriation procedures, which will cause title to the land in question to be converted to a renewable leasehold contract with the reversion to the state. "Subject to the existing transfer laws, non-citizens already in possession of registered freehold assets of publicly traded corporations shall be permitted to transfer such assets to other non-citizens only when deemed necessary to preserve the investment value of publicly traded companies." Importantly, though, the policy commits the government to buying land and the improvements to it at commercial rates. Thengo Maloya, Malawi's Minister of Lands, told IRIN on Tuesday that the policy had not yet come into effect. "We have not frozen foreign ownership from 1 September," he said. According to Maloya, wide consultation preceded the draft and its intention was to ensure that Malawians were involved in the development of the country. He also said that if foreign companies had local shareholders they would be able to own land in the country. No limits would be placed on foreign shareholders, he added. "It will depend on the company and the Malawian. We would not like to undervalue a company. We will not insist on percentages. What we are really saying is that Malawians must begin to participate in the economic activities of their own country," said Maloya. He added that foreigners (individuals and companies) who had long-term leases would not lose their benefits. According to the policy: "Only citizens will be permitted the privilege of owning freehold title in Malawi. Non-citizens interested in such a long-term stake (freehold in perpetuity) in Malawi should be willing to pledge their wholehearted allegiance to Malawi by becoming citizens. Otherwise, access to land for non-citizens will be construed as purely for residential and investment purposes and an appropriate leasehold term determined, guided by investment and industry profit requirements." It goes on to say that with the exception of some types of investments, such as mining, forestry and some perennial tree crops such as tea, "most leasehold terms for industrial and commercial investment purposes throughout the world generally are for less than 50 years, with renewal clauses allowed. For that purpose, the standard leasehold term for land leased to non-citizens for investment purposes in Malawi will also be for a renewable term of 50 years or less". Malawi's land pressures have contributed to increasing poverty in recent years. With a population of about 9.8 million in 1998, government statistics indicate a density of 170 inhabitants per square kilometre - one of the highest densities in Africa. Landlocked, with an agricultural economy that accounts for over 40 percent of gross domestic product (GDP), the majority of Malawians live in the central and southern regions of the country. And with Lake Malawi covering almost 20 percent of the country, according to the draft policy: "Malawi has a total of 11.8 million hectares, of which 9.8 million is land. Agricultural estates occupy 1.2 million hectares and the area potentially available for agriculture by small farmers is approximately 4.5 million hectares after adjusting for wetlands, steep slopes and traditional protected areas." According to the government's National Statistics Office (NSO), about 55 percent of smallholder farmers in Malawi have less than one hectare of cultivable land, which does not meet their basic needs. As a result, says the NSO, "more than half of the population lives below the poverty line of US $140 per capita income per year. "In absolute terms, the poverty of the country is predominantly rural and is reflected in the below average social indicators. The illiteracy rate is about 56 percent for the overall population. Malnutrition is widespread, and the child mortality rate at 238 per 1000 is among the highest in the world," says the NSO. Rafiq Hajat, director of the Institute for Policy Interaction, told IRIN the draft policy raised many questions. "There really isn't that much of a problem in the policy. The major problem is in what it does not say," he said. For example, there was concern that banks could withdraw loans once ownership was changed from freehold to leasehold. The majority of Malawi's tea, coffee, sugar and tobacco estates are foreign-owned. Hajat said the country's constitution did not limit the ownership of land to citizens only. "There is definitely an infringement of a constitutional right. Section 28 of the constitution of Malawi says that every person shall be able to acquire property alone or in association with others. Subsection 2 of the same section says no person shall be arbitrarily deprived of property," he said. He also pointed to possible administrative problems. "The land policy does not address a major bottleneck in the land-based economy here. The Land Act, in section 24, states that the government must be told of all transfers of land. It says the minister should approve or reject the transfer of land within 30 days. It does not say that if this does not happen in 30 days, the land should be transferred by default. Some transfers at the moment take up to 18 months to get approval," he said. He also warned that if the process was not well managed, the policies could lead to high inflation rates, lower productivity, a general deterioration of the infrastructure and an eventual decline in the economy. The draft policy, he said, had already had a negative impact on land prices. He also said that foreigners were already having their applications for land transfers turned down. Daziona Chaponda, an economist with the World Bank in Malawi, told IRIN that the policy was still being debated widely in the country. He said while there was some concern, large commercial estate owners were more "interested in the security of tenure and a guarantee that the law would prevail in guiding whatever transactions take place". This concern, it seems, will determine the amount of resistance the Malawian government will receive when it finally drafts a bill to go before its parliament. At the forefront of everyone's minds, meanwhile, is Zimbabwe, whose land reform programme has contributed to the country's serious and dramatic economic decline. "There have been some concerns, but as long as the discussion is going on in an open way, and it has been encouraging how discussions have taken place so far, then it should be fine," said Potter.