Most valuable land in rural areas
Despite shortage of housing in the main cities of Gaborone and Francistown leading to higher value of urban land, land in rural areas is more valuable than in urban areas, a recent report on inequality in Botswana has revealed.
The United Nations Development Programme (UNDP) report states that the higher value of urban land is caused by a sluggish market response in the form of both ready-built housing units and low-income housing but also buoyed by foreign demand.
“However, changes to the transfer duty chargeable to non-citizen investors may reduce this pressure.” According to the report, land value in rural areas is more valuable than in urban areas at P56,740 and P38,452 respectively.
Land value is the worth of a piece of property, which includes both the value of the land itself and any enhancements made to it.
However, when the price per acre value is accounted for the differences appear to disappear, with the average price per acre in rural areas given as P4,985 and P4,630 in urban areas,” the report further indicates.
Also, the findings show that the most valuable land is to be found in the Ngamiland and Southern districts (P110,987 and P104,814 respectively). Land in Ngamiland is regarded as highly valuable due to its fertility and the richness in wildlife.
However, despite Ngamiland having high valuable land, analysis of inequality in the value of land holdings paint a concerning picture.
The Gini Coefficient (A measure of the distribution of income across a population) for land value in Ngamiland is 0.75 indicating the presence of high inequality.
“A coefficient of 0.75 indicates that each equal percentage share of the population does not own an equal proportion of land value, with much of the value accruing to a small proportion of the population.” Furthermore, the report disclosed that there is a degree of variation in the inequality of land holdings by district with Ngamiland and Southern districts exhibiting higher inequality than other districts while inequality is lower in Gantsi and Kgalagadi.
“The presence of the highest value land in the districts with the highest Gini Coefficient of land value is a significant policy concern when land is viewed as a welfare and livelihoods tool.”
With a strong relationship between land value and inequality in land value, the report also showed that districts that have higher land values tend to be those districts with the strongest concentration of the value of land among very few people. This was particularly noticeable in Ngamiland and Southern districts. “In Ngamiland, pastoralists and large ranches have a tumultuous history which may result in the present concentration of lands in the hands of relatively few.
A series of catastrophic droughts in the decades after independence resulted in migration towards the river delta, which resulted in significant cattle overcrowding.
During this same period, the government’s Tribal Lands Grazing Policy was implemented to overcome issues such as this, and tracts of allegedly unused land was converted to ranches – ranches of up to 6,300 hectares in size were created.”
The report also indicated that the land converted to ranch use was a significant livelihood protection tool for managing periods of drought, and that private ranches had continually encroached on communal grazing lands, increasing the proportion of land concentrated in the hands of few. Moreover, the report indicated that the process of establishing a ranch requires significant financial resources (up to $25,000 USD), which puts it out of the hands of poor pastoralist farmers and puts larger tracts of valuable land in the hands of a few wealthier individuals.