The name is absent

126

Government and Housing to approve a rate of 4.0 percent. When owners of valuable properties
calculated the amounts owed, they became vociferous, and the city later bowed to their pressure. The
Chamber of Commerce and Industry of Lusaka proposed that the rate instead become 0.025 percent,
or 1/40 of 1 percent. On 15 January 1994, the Town Clerk of Lusaka published a notice proposing
a rate of 1 percent.'

Some local governments discriminate by use of the property. For example, in Chipata, the rate
due in 1994 is one half ngwee per kwacha for domestic (residential) improvements, and 3 ngwee per
kwacha (3.0 percent) for commercial and industrial improvements.'

IV. Valuation of land and improvements in Zambia

A. Valuation process

The balance sheets of business firms in Zambia show both land and improvements as assets.
When a business firm is sold as a going concern, the buyer normally seeks an up-to-date valuation.
Banks and other lenders may request a valuation to determine the property's collateral. For such
purposes, a valuation surveyor is usually hired, a person trained formally at the University of Zambia,
followed by on-the-job practical training in firms of valuation surveyors. In practice, most such
valuation surveyors also function as estate agents.

Government frequently needs the estimated value of a piece of land, or of an improvement,
or both. The transfer tax is charged on the reported value of the transfer; ground rents are, or ought
to be, based on the value of the property if it were rented in the market. When the government needs
to acquire land or a house for public purposes, a value is needed as the basis for negotiating
compensation. In these cases, the valuation is done by the GVD. Government and private sector
planners also need values for land and buildings when preparing feasibility studies and cost-benefit
analyses for proposed investment projects. Estimates are often prepared as to the value at present, and
also for the value the same land and/or improvements will have once the proposed road, dam, or other
project is built.

There is at least one significant investment fund in Zambia that enables individuals and
companies to invest in a share of a set of properties. ¹⁰ That fund in turn needs a value for each
property every quarter for reporting to investors. The fund also redeems investments for cash upon

⁸ The chamber also suggested that rates not be collected at all until the city provides better services, and that rates ought
to vary among parts of Lusaka, because some neighborhoods receive more and better city services than others. Complicating
matters further, the deputy mayor and the mayor led rival factions of the city council that refused to work together. The
Minister of Local Government in early 1994 informed the city council that his ministry would take over city administration
if various problems were not solved by 31 March 1994.

⁹ Local usage is ngwee in the kwacha; the ngwee is a penny, or 0.01 kwacha. With inflation, the ngwee is no more
current than the mill formerly used in the United States to refer to one one-thousandth part of a dollar.

¹⁰ The Meridien Property Fund, managed by Meridien Financial Services Ltd, has been operating since 1987 and,
according to its latest annual report (30 September 1993), currently owns 15 commercial, industrial, and residential
properties with a total value of K1,111 billion. Of these, 13 are in Lusaka, one in Kitwe, and one in Crescent. The return
to investors is a combination of rental income, profit on the sale of properties, and interest earned on cash balances awaiting
investment.

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