LL city fathers ‘Favour the rich’

Lilongwe City Council (LCC) is offering plots for sale to staff of some selected institutions including Reserve Bank of Malawi (RBM), a move a land governance expert has described as favouring the rich at the expense of the less fortunate.

Weekend Nation can reveal that LCC is offering the plots in Area 27 Sector 3, along Kanengo–Salima Road on a cash-upfront-basis at K6.3 million for 20 metres (m) by 15m plots and K4.7 million for 15m by 30m plots.

LCC spokesperson Tamara Chafunya confirmed of the arrangement but justified it saying the council has several approaches to land development and one approach is the cash-up-front approach.

She said: “Because of client confidentiality we cannot disclose the names of the institutions we have offered the plots to, and again some of the things are still under discussion.”

But our sources privy to the move said apart from RBM, several public institutions will also benefit from the arrangement.

A copy of a general notice from RBM to all its employees dated July 19 2023 and signed by the central bank’s deputy governor Mercy Kumbatira, titled ‘Offer of Plots to Members of Staff by Lilongwe City Council’ reads in part: “Executive Management has consented to the facilitation of collective acquisition of these plots on a cost-recoverable basis for interested members of staff through the extension of recoverable loans to members of staff.

“However, loan extension shall be subject to the terms and conditions of the recoverable loans and Take Home Pay. The loan will be recovered through salary monthly deduction up to a maximum of thirsty six (36) months.”

According to the notice, the dateline for submission of names of interested staff was July 31 2023.

In the current scenario, Chafunya says one fifth of the plots are being offered to organisations to pay a lump sum for its staff.

Said Chafunya: “This enables the council to meet the costs of servicing the land. The offer has been made to over 10 institutions that are not necessarily government. The rest of the plots will be offered to the general public following the normal offer procedures to individuals.”

But national director for Land Governance Alliance (Laga) Emmanuel Mlaka said in an interview on Thursday that LCC’s approach is predominantly market based aimed at maximising the returns and favouring the rich at the expense of the less fortunate who are usually the middle to lower income groups.

He argues that the latter groups are the majority and the most in need adding that the pegged charges of K6.3 million and k4.7 million are in themselves discriminating the low earners.

Said Mlaka: “Consequently, it is the rich that will manage to buy most of this land and this leads to land concentration to the few elites resulting in the low income groups either squatting on land or purchasing land on the peripheral of the city boundaries meant for agricultural purposes.

“In the long run, the council loses out as it can’t collect city rates from the squatters and so does the government as it can’t collect ground rent from them. Examples are the unplanned settlement in some parts of Area 49 and some sectors in Area 25. Processes to regularise such land take too long, if at all.”

He, however, proposes that LCC should have done a cross-subsidisation pricing which is a process where the rich would pay more and the middle to low income, who are most in need, would pay a little less yet the average price would still make service provision viable.

According to Mlaka, the other important element that the council would have considered is to prioritise those that don’t own a piece of land to ensure inclusiveness and equity other than solely looking at affordability and easiness of collecting the development charges.

“Another important aspect is that the city councils have the mandate to allocate land to low income groups. While land markets have skyrocketed, the council shouldn’t lose this core mandate.”

But Malawi Local Government Association (Malga) has backed LCC for the approach saying it is one way of getting funds for compensation.

Malga executive director Hadrod Mkandawire said in an interview on Thursday that the land in question is yet to be developed and demarcated into plots due to financing challenges.

He said: “Therefore, instead of resorting to a bank loan to access capital for plots demarcation and access roads development, the council has resorted to institutional upfront payment for some of the yet-to-be-demarcated plots.”

Mkandawire further added that this relieves the council of interests’ payment on commercial loans for such projects, while availing the much-sought residential plots to citizens.