Assessing Fairness in Land Acquisition Compensation Law in Tanzania: A Case of Depreciated Replacement Cost Method.

Kome, Chiremeji Raphael (2025) Assessing Fairness in Land Acquisition Compensation Law in Tanzania: A Case of Depreciated Replacement Cost Method. Masters thesis, The Open University of Tanzania.

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Abstract

This study investigates the challenges and grievances arising from compulsory land acquisition in Tanzania, with a particular focus on the perceived unfairness of the Depreciated Replacement Cost (DRC) method used in nationally funded projects. The research aims to explore the legal framework governing compensation in Tanzania, evaluate the effectiveness of existing compensation methods especially the DRC approach and identify lessons from international best practices, particularly those outlined by the International Finance Corporation (IFC). Using a mixed-method approach, the study combines doctrinal analysis of Tanzanian laws with a comparative review of international standards. The DRC method, while offering a structured approach to valuation and reflecting current market conditions, has significant shortcomings. It tends to undervalue affected properties due to its emphasis on depreciation, fails to account for emotional attachment, location, and economic potential, and excludes important considerations such as relocation and transaction costs. This often results in inadequate compensation, legal disputes, and diminished investor and public confidence. The IFC Performance Standards provide a more equitable compensation model than Tanzania’s current DRC method, offering full replacement cost without depreciation, covering inflation and transaction costs, and allowing cash or in-kind options. They also include social safeguards such as support for vulnerable groups, impact assessments, and ongoing monitoring, ensuring fairness and transparency. The study finds the DRC method inadequate in addressing the full effects of land acquisition and recommends legal reforms to align with IFC principles for more just and sustainable compensation. Keywords: Compulsory Land Acquisition, Fair compensation; Depreciated Cost; IFC Standard; Property Rights; Tanzania.

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