Tuesday, 29 July 2014

Property prices are too high in Namibia

This column first appeared in the Namibian newspaper on 29 November 2012

The inability of people to purchase a first time home is a common complaint heard everywhere in the country.
In this column I would like to look at problems created by property speculators and what can be done to assist in getting a bigger portion of our citizens to become homeowners.

One of the ways that speculators make money can be illustrated through the townhouse developments that have been springing up all over the country.  When the developer starts a project, most of the selling is done to a network of friends, family and other speculators who already own a property and gave the relationship with a bank to get the required financing fairly quickly and easily. Thus, sometime even before the first earth is turned, most of the houses in the development have already been sold. These purchasers however do not need to pay for the property until the actual development is completed. This means that they have only signed their name on the deed of sale and there is no need for any money at this point.

The property development can take a period of 18 to 24 months and as the developer reaches completion of the property, the speculators start advertising the property for sale. Most new homeowners are eager to purchase as they see the development is almost complete and wish to be the owner of a 'brand new' house. But there is a catch!

Prices go up all the time. Because the demand for houses is so high, the price of the property will be higher at the end of the construction, that is, 18 months after the start of the development.
So, if the speculator bought the house at a price for N$ 400 000 in January 2011, the property will have increased in value with as much as N$ 150 000 by November this year. So the new homeowner will now be buying the property from the speculator for the price of N$ 550 000. What makes it worse is that sometimes the dates of the transfer of property from the developer to the speculator, and the speculator to the new homeowner, are the same.

In other words, the speculator 'bought' the property by signing their name on the deed of sale and has not paid a single cent during this period on the property, but is still able to sell the property at a huge profit.

Taxing multiple home owners

We should put higher taxes on people who own more than one house in Namibia. By forcing property owners who hold land on speculation to sell or rent out for what they can get, a tax on land values tends to increase the competition between owners, and will lead to the reduction of the price of land.

One way of doing this is to introduce a Capital Gains Tax, in other words a tax when you make a profit on the sale of a property or other asset. This is done in many countries all over the world and after introduction has seen house prices decrease by as much as 30 percent as demand by property speculators drops.
This tax will not affect your primary residence provided that your property is smaller than a pre-determined size (for example two hectares) and the profit you make is less than a certain amount (for example N$ 500 000). If you are a homeowner having a second property or a holiday home, you will taxed on the profit you make when selling the other property. In addition, the government should make capital gains tax applicable on all properties registered in the name of close corporations, trusts and companies.

As long as Namibians lack ownership of property they will have very little (or no) interest in their community. Home ownership has a positive impact on families, communities and Namibia's economy as private ownership of property is fundamental to both our freedom and our prosperity in the future.

Tuesday, 1 July 2014

Smart Toilet information – good or bad idea?

(First appeared in Consumer News Namibia Magazine May 2013)

Recently there was an article in an international publication about “smart toilets” being installed by municipal authorities of Toronto, Canada. The toilets were being installed at the city’s convention centre, the equivalent of our Windhoek Showgrounds. The purpose of installing the toilets is to allow them to analyse the data collected from the toilet.

When I heard about it, my first question had to be why? The second issue that came to mind is that there is no more privacy if I should use a public smart toilet.
(As I read further in the article, it turned out that the “smart toilets” was actually a publicity stunt.)
But let us look a little bit deeper at what the company was actually claiming to do. The fake company is called Quantified Toilets and they claimed to have installed sensors in the Toronto Convention centre and other public venues that would automatically analyse “deposits” in the toilets to detect a person’s gender, drug and alcohol levels, pregnancy status, sexually-transmitted infection status, and “the smell factor”.
The company (remember it is a fake business”), even put up signs in the bathrooms that read “Behavior at these toilets is being recorded for analysis.”
The company also created an accompanying website featured that featured a live stream of toilet data being collected in real time.

The idea of “smart toilets” is not actually a new idea. The IT company INTEL, has done a survey in the United States of America and found that “70% of people said they would be willing to share their smart toilet data if it led …. to lower medical costs”
The article however went on to explain why the idea of “smart toilets” is not a good idea. It was this part of the article that struck me most as a consumer activist.
What if the Government of Namibia (GRN) or a private company installs “smart toilets” and does not leave you with any option on whether your private information is collected or not. (In other words it is not your choice – there is no opt-out option.) Furthermore, it must be a worry that personal health data that is NOT being collected for use by a doctor. Imagine this was shared with an insurance company for example?
Let us look at some of the scenarios sketched in the article:
·         At a convention or concert, an organization could determine whether attendees have high rates of pregnant women with positive drug or alcohol tests, then use that knowledge to target public health messages to the demographic.
·         In stadiums, an organization could see which sections had higher blood alcohol levels, and even the peak levels during the game.  They could market more beer to that section—or make it harder for people in that section to buy drinks. They might even sell this data to beer vendors willing to pay for such demographic information.
·         Other ideas from the Quantified Toilets website: “We use this data to streamline cleaning crew schedules, inform municipalities of the usage of resources, and help buildings and cities plan for healthier and happier citizens.”
Now imagine your employer could get hold of this kind of data. The boss will be able to know which drugs you are taking, check to see if you show up at work drunk or even know which female employees are expecting babies.
As users of “smart phones” we already use a lot of applications to track our movements, pictures we take, where we eat meals, etc,. but there’s a serious line that must be drawn between the “quantified self movement”—in which people record as much personal metadata as possible—and public monitoring of our data. 
The author of the article ended his piece with the following paragraphs:
Sensors of all types are easily connected to the Internet. They can collect vast amounts of data, which can then be shared widely. As citizens, we don’t always know what data is being collected, who can access it, or how it will be used. Even seemingly secure networks can be comprised. 
We should be leading conversations about the legal privacy protections we need to establish for what once seemed to be private activities. In a data-rich connected world, even the most intimate spaces are becoming public.

Sugar is our Enemy

First appeared in Consumer News Namibia Magazine April 2013)

There is a new documentary called FED UP, that takes a look at the global problem of obesity and obesity-related diseases (In other words “Why are humans fat?”). Some years back the first consumer oriented documentary, An Inconvenient Truth, made waves and created awareness of the issue surrounding climate change. In, FED UP, the filmmakers continue with this tradition with a hard-hitting challenge over the misconceptions (and food industry-sponsored misinformation) about diet and exercise, good and bad calories, fat genes and lifestyle.

One of the biggest misconceptions about sugar is addressed in the film. According to the film’s scientific consultant Robert Lustig, a neuroendocrinologist, author and president of the Institute for Responsible Nutrition, “when it comes to obesity, fat may not be our friend but it’s not the enemy that sugar is.” This view is gathering support from doctors all across the world.

To further understand this issue, we need to look at statistics in the United State of America (USA) as there is very little first-hand historical information available in Namibia. In the USA, 17% of children and young people aged between two and nineteen are considered obese. Another study predicts that today’s American children will lead shorter lives than their parents. This must be very scary, and should be considered in the Namibian context because we are starting to follow the same eating habits of these developed nations.

However, we must be careful in blaming our problems on obesity nor fat. “The food industry wants you to focus on three falsehoods that keep it from facing issues of culpability. One, it’s about obesity. Two, a calorie is a calorie. Three, it’s about personal responsibility,” according to Lustig.
“If obesity was the issue, metabolic illnesses that typically show up in the obese would not be showing up at rates found in the normal-weight population. More than half the populations of the US and UK are experiencing effects normally associated with obesity. If more than half the population has problems, it can’t be a behaviour issue. It must be an exposure problem. And that exposure is to sugar.”

The film further goes on and claims that fast-food chains (Wipmy, Nando’s, to name a few Namibian brands) and the makers of processed foods such as dairy and meat, have added more sugar to “low fat” foods to make them more appetizing and tasty. Thus the producers are making “healthy foods” appear less dangerous and we tend to eat more of them because of their perceived “healthiness”.
In many societies, nutrition problems are most often associated with low-income groups, but this “sugary problem” is affecting all levels of society. In the film, they suggest that big business is poisoning us with food marketed under the disguise of health benefits.

One of these diseases, early-onset diabetes which is associated with exposure to cane sugar and corn syrup, was virtually unknown a few years ago. At the present rate approximately one in three Americans will have diabetes by 2050. “Obesity costs very little and is not dangerous in and of itself,” says Lustig, who works with the UK’s Action on Sugar campaign. “But diabetes costs a whole lot in terms of social evolution, decreased productivity, medical and pharmaceutical costs, and death.”

The film-makers say it is not in the interest of food, beverage or pharmaceutical companies to reduce sugar content. “It’s too profitable,” says Lustig. The pharmaceutical industry talks of diabetes treatment, not prevention. “The food industry makes a disease and the pharmaceutical industry treats it. They make out like bandits while the rest of us are being taken to the cleaners.”

One of the important points that Lustig makes is that: “Food producers are going to have to be forced. There’s only one group that can force them, and that’s the government. There’s one group that can force the government, and that’s the people.”
Truly inspirational words for the consumer groups and Consumer News Namibia Magazine.

Thursday, 26 June 2014

Intellectual Property Rights and how it affects the consumer

(First appeared in Consumer News Namibia Magazine April 2013)

In many areas of business today, the term Intellectual Property (IP) is being used to justify the higher price of a product or service – and the prevention of competing businesses being able to provide the same product or service. This means a competing business may not sell the product or service at all – even if it would mean a cheaper cost to the consumer. However, it is important that intellectual property rights protection be encouraged in society to ensure that better inventions, products or services are being created.
Wikipedia defines IP as:
Intellectual property (IP) rights are the legally recognized exclusive rights to creations of the mind. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress, and in some jurisdictions trade secrets.
As a consumer, we all want to be able to buy a product for a cheaper price, but we do not want to compromise on the quality of the product, or even worse use a cheaper product that might actual cause us physical harm. It is thus clear that there must be a point of equality where the IP holder gets a decent return for the investment of their idea or invention compared to the price the consumer has to pay for such a product or service.
To understand this concept better, let us examine each type of right that is referred to:
·         Copyright
Copyright gives the creator of an original work the chance to receive payment for their work and allow them to financially support themselves through this work. This is often granted to visual and audio works such as music, books, paintings, etc. Copyright is recognized without any formal registration in most countries – as long as the work is in a completed form.

·         Trademarks
A trademark is sign, design or expression that identifies products or services from a specific source. International examples include Coca Cola, Facebook and Toyota. In Namibia, an example is the trademark of MTC which is fully written out as Mobile Telecommunications Limited. Trademarks allow the consumer to be assured that a specific product or service does in fact originate from the company whose trademark is used.

·         Patents
A patent is a set of exclusive rights granted by a country to an inventor for a limited period of time in exchange for detailed public disclosure of an invention. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, importing, or distributing a patented invention without permission.

·         Industrial Design
An industrial design right protects the visual design of objects that are not purely practical or functional. It can consist of the creation of a shape, configuration or composition of pattern or color, or combination of pattern and color in three-dimensional form containing artistic value. An industrial design can be a two- or three-dimensional pattern used to produce a product, industrial commodity or handicraft. In Namibia, local handicrafts can qualify for industrial design rights.

·         Trade Dress
This refers to characteristics of the visual appearance of a product or its packaging that signify the source of the product to consumers. Examples are the Team Namibia products that carry the Team Namibia logo.

In Namibia, the government, business community, civil society and the consumer needs to define how to ensure that intellectual property rights are protected (and encouraged) while not allowing exploitation of the consumer.

Milton Louw is a consumer activist and writer. He is presently the IT Project Coordinator at the Electoral Commission of Namibia. The opinions expressed in this article are purely his own.

Imagine life without debt!

(First appeared in Consumer News Namibia Magazine April 2013)

“Debt is like a disease that can enable us from living a happy and normal life by taking control over our lives. Most of us don't even know how we end up in the situation we are in. Buying everything we own with credit has become our culture. But don't let debt control your life any more. You can take over your life again. Imagine life without debt!”
Is it true? Can a person do things in life without using getting into a debt trap? YES. The problem is not about using debt or cash, but rather about financial management and making sure you keep yourself out of trouble and ensure you don’t worry too much about the level of credit you have or are using.

Remember the following are tips only – you must find the ones that work best for your and apply them to your life.

1. Don’t get into debt
Use cash wherever you can and do not take out any debt except for a motor vehicle or a house.
2. Spend less money than what you earn (obvious but needs to be said)
3. Write down all your liabilities so that you can see what is the amount of money you owe the world. This should be very motivational if you keep a record of this amount as you start paying it off.
4. Cut up your credit cards – all your clothing accounts, etc. should rather be on a cash buy basis
5. Avoid eating out – if possible cook at home and you will save a lot – you can splurge on a cookbook that can help make your meals a little more interesting too.
6. If you go out, visit friends and find things to do that is not expensive – going to the dam, or the park, visiting a museum, etc.
7. Plan for future expenses now.
8. Make a budget – and stick to it
9. Speak to your spouse or partner about both your spending habits – it takes both of you working together to reach your goals
10. Be realistic – the debt will not go away overnight. The same time it took to accumulate the debt is about the time you will need to pay it off
11. Eliminate some things – look hard at the things you spend your monthly budget on – and cut some of them out. This might be your MNET subscription or the gym membership that you never use?
12. STOP borrowing money – every cent borrowed during the month feels like twice the amount when you have to repay it. This is especially true if you are using a cash loan facility.
13. Turn off your television – this way the adverts will not tempt you.

Number thirteen was thrown in to make you laugh – but the advice of not letting temptation ruin your budget is true. Don’t take those pamphlets that the jewelry or clothing store gives out. Don’t open the catalogues they send in the mail – all of it is aimed at making you spend more.

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