Annex 7. MAJOR NATIONAL POLICY ISSUES IN SELECTED COUNTRIES

FIRST DRAFT

This annex sets out the first draft of a matrix to describe the policy stances of countries, prepared by the policy officers at FAOSAFR. The matrix can be further developed as studies of investment programmes and projects proceed. A similar approach can be taken to documenting the sector policy stances of individual countries, for analysis of their impacts on farmer decisions.

TABLE A7.1: Major national policy issues in selected countries: first draft

Country	National Policy Issues
Country	Fiscal policy	Sector development	Credit and savings	Trade	Exchange rate	Institutions
Angola^[10]	May not be favourable to agriculture as government is seeking to broaden the tax base	Improve food security through increased agricultural production	Increase available domestic resources to finance investment. Incitation for private investment		Harmonisation between official and parallel rates. Current rates are unfavourable to agriculture
Botswana	Tax payable annually for period ending 30^th June. 25% company tax. 15% on dividends	The main sector initiative is the NAMPAADD whose implementation is about to begin	Farmers have benefited from on-farm investment and support with marketing of cattle.	Botswana’s main exports are minerals and meat products while imports, mainly from South Africa are made up of consumer goods	Free market Favourable for agriculture	Fairly strong marketing and farmer support institutions including budgetary support.
Lesotho	70% of government revenue derived from distributed share of SACU^[11] tariff and excise revenue	State controlled grain markets -untargeted input subsidies. Direct participation of government in productive activities and in marketing of agricultural output.	Non-existent. Subsidy policy effectively substitutes for credit and savings	Part of SACU^[12] Common external tariff regime.	Free market Favourable for agriculture	Prevalence of state agricultural parastatals - slow privatisation and deregulation is in process.
Malawi	Taxes: 35% company; 45% for branch companies. Personal taxes range between 3 - 40 %	Dualism between subsistence agriculture and commercial agriculture	Not very well developed and savings are low due to low incomes.	Export processing zones offering lower corporate taxes.	Free market Favourable for agriculture	Strong institutions but government controls on commodities such as maize.
Mozambique	Being reformed to broaden rates and reduce double taxation -Policy being decentralised to district level activity plans	Sector under rehabilitation and reform mainly under PROAGRI program	Low levels of savings due to low incomes.	Commercial trading margins high due to poorly developed markets. High cost induced by margins.	Free market Favourable for agriculture	Institutions being transformed from command economy to free market.
Namibia					Free market Favourable for agriculture
South Africa	Recent tax cuts are expansionary in 2003 budget.	Diversity of products in agriculture. High levels of agri-processing.	Fairly high levels of saving by regional standards.	Diverse exports and imports. Key role for mining.	Unified Favourable for agriculture	Institutions well developed. Supportive of agriculture.
Swaziland	Rate of 37.5% for companies.	Diversity of agricultural products.	Moderate savings rates.	Import/export restrictions.	Free market Favourable for agriculture	Institutions well developed. Supportive of agriculture
Zambia	Several schemes: PAYE, company tax; W.T etc.	Dualism between subsistence and commercial farms.	Modest savings rates.	Diverse exports and imports - Key role of mining.	Free market Favourable for agriculture	Institutions well developed. Supportive of agriculture.
Zimbabwe	Several schemes operated: Company, personal, capital	Highly developed agriculture sector but slump due to economic slow down.	Declining in public and private sector savings.	Trade is diversified but slump of exports due to economic slowdown.	Dual rate Strongly against agricultural	Strong institutions challenges from slump of the economy.

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^[10] Angola just came out of a long period of war. It is preparing its PRSP which is defining new policies and institutions to be put in place.
^[11] southern Africa Customs Union
^[12] Set by South Africa Common external tariffs in force, combined with Intra-SACU import controls to protect local farmers.