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1. Uses
SEC. 20(7) of the draft states that the moneys of the fund are for "grants to councils situated
in rural areas for development of land and making of roads,...opening up of new areas for
development,...the improvement and development of agriculture,...the supply of water for domestic
farming and irrigation purposes,...and generally, such other purposes for the direct benefit of the
people in ensuring that more land is made available for development and is developed." These
objectives are quite broad and duplicate the objectives of other agencies, provided for in the annual
government budget. Improvement and development of agriculture coincides with the objectives of the
entire budget of the Ministry of Agriculture. The water-supply objective does the same for government
agencies concerned with water projects. Also, the building of local roads is often an activity of local
government, funded in part with property taxes (rates). Ground rents could also be channeled through
local councils.
If ground rents and other fees collected by the state continue to be taken off to Lusaka and
then routed back to some but not all rural areas, through decisions made in Lusaka, the fund may
work against the government's announced goal of decentralization. If, on the other hand, the fund is
politically necessary as the only way to get ground rents and fees up to economic levels, and hence
pressure speculators to put land to productive use, then the fund may still be justified. It might be a
good idea to include in the law provision that all moneys raised from land-related fees be invested in
the same province where they are raised.
Curiously, however, the draft law does not explicitly allow investing in existing but
underutilized state sector leaseholds, nor improving run-down state farms that are sold to commercial
farmers, smallholders, or emerging farmers. Surely government could show visible, positive results
more swiftly in that area than in opening up new land in customary tenure areas. Still, the objectives
are probably broad enough to include this area too. According to the 1994 budget message (p. 10),
a pilot scheme to subdivide state-owned farms for commercial use is under way.
The opening of new areas has been a main objective set forth by proponents of the LDF from
the beginning, but the draft law is totally silent as to who exactly is to benefit from this. Before an
area is opened, the land rights situation should be inventoried. Planning for the project should be
specific as to who is expected to benefit and how much they are required to contribute to the cost of
the project. Will foreign investors, who likely will have leverage in competitive bidding, be given
open and full access or should controls be placed on their actions through quotas or special fees? Will
newly improved lands be allocated to political insiders at little or no charge, as in previous republics?
Or will ground rents close to market levels be charged, and then an open public auction used to decide
who gets the most desirable parcels at those rental levels? The latter would generate far more revenues
for the fund, enabling government to develop land much sooner than if land is allocated by
administrative discretion. If running projects through the fund instead of the regular budget increases
accountability and productivity and helps justify the change to market-level ground rents and fees, this
is positive. It remains to be seen whether the fund, as proposed in the draft law, would in fact be
accountable and efficiently managed.
One might suggest redrafting these objectives, perhaps based only on the "opening areas" and
"other purposes" clauses and setting forth very specific provisions to ensure that (1) more land is made
available for development, (2) it is in fact developed, and (3) those who get the land effectively pay
market values for it, with a significant cash initial payment and an effective collection mechanism for