Property and land compensation practices in Tanzania a case of Kipawa

Abstract

This study aimed at assessing the compensation practices for the displaced households in Tanzania. Data was collected from 49 displaced households in Pugu Kinyamwezi and 12 valuers from the Ministry of Lands Housing and Human Development. The data was collected using structured questionnaires and analyzed and presented thematically, through charts and frequencies. Findings show that, majority of the displaced household families were not satisfied with the amount compensated. The dissatisfaction is based on the fact that compound interest paid does not reflect the market value of the property. Hence some failed to re-construct new homes while others did construct houses that are of less value compared to the previous ones. Additionally majority of the respondents (86%) were compensated late. This complicated the problem due to devaluation and increased cost of construction materials. From the interviews majority of the valuers pointed out that replacement cost method used is not appropriate for determining market value because depreciation amount is deducted from the said amount. Majority of the valuers indicated that compound interest rate does not cope with market dynamics. They recommended that interest rates used should not base on the depreciation on buildings as the compensation aims at enabling beneficiaries re-construct their homes.