Financiers implored to use communal land as collateral
'Not attractive enough'
There is currently no opportunity to use communal land as collateral, amid suggestions that policymakers are seeking innovative solutions to this dilemma.
Bank of Namibia (BoN) governor Johannes !Gawaxab says authorities should seek innovate ways to ensure that owners of communal land can monetise their immovable property, which will allow them to build value around that.
He made the comments during a public engagement held in collaboration with the Namibia University of Science and Technology (NUST), saying financial institutions should consider accepting communal land as collateral. This while 36% of land in Namibia is in communal areas, making up more than one third of total land in the country.
“It is very difficult to offer that as collateral, so what we need to think about is: If this continues in terms of land tenure, if someone has a 99-year lease on a piece of land, can we think innovatively in terms of offering it as a collateral? Or do we accept the situation as it is?”
As part of a study into Namibia’s financing limitations around communal land, Research and Information Services of Namibia found that, currently, persons residing in communal areas were not able to derive economic value out of the land they possessed. “Environmental and living conditions for people living in communal areas are challenging, especially for those who lack access to incomes from other sources. Communal tenure arrangements conspire in a number of ways to add further difficulties which limit the economic value of communal land," it said.
The research suggested that communal land be transformed from dead into functional capital, that the rights of local residents to their common-property resources are secured with opportunities available to gain economically from commonages and that individual land holders in Namibia receive equal options to use their land rights for economic purposes - irrespective of where they happen to live.
“The greatest opportunities for economic development lie in the use of individual properties as investments and financial instruments, while the protection of commonages will better safeguard the land rights of the poorest residents in communal areas,” the study read.
He made the comments during a public engagement held in collaboration with the Namibia University of Science and Technology (NUST), saying financial institutions should consider accepting communal land as collateral. This while 36% of land in Namibia is in communal areas, making up more than one third of total land in the country.
“It is very difficult to offer that as collateral, so what we need to think about is: If this continues in terms of land tenure, if someone has a 99-year lease on a piece of land, can we think innovatively in terms of offering it as a collateral? Or do we accept the situation as it is?”
As part of a study into Namibia’s financing limitations around communal land, Research and Information Services of Namibia found that, currently, persons residing in communal areas were not able to derive economic value out of the land they possessed. “Environmental and living conditions for people living in communal areas are challenging, especially for those who lack access to incomes from other sources. Communal tenure arrangements conspire in a number of ways to add further difficulties which limit the economic value of communal land," it said.
The research suggested that communal land be transformed from dead into functional capital, that the rights of local residents to their common-property resources are secured with opportunities available to gain economically from commonages and that individual land holders in Namibia receive equal options to use their land rights for economic purposes - irrespective of where they happen to live.
“The greatest opportunities for economic development lie in the use of individual properties as investments and financial instruments, while the protection of commonages will better safeguard the land rights of the poorest residents in communal areas,” the study read.
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