External Influence on Valuation: Looking for Evidence from Tanzania

— International Valuation Standards and best practice advocates consistency, objectivity, independence and transparency as critical in ensuring credible valuations and in building public trust and confidence in valuation. However, literature observes that valuers face a myriad of challenges in observing these principles, key among them being the external influence they face. Evidence of external influence particularly from clients, market, other valuers, fund managers, bankers has been confirmed in US, UK, New Zealand, Taiwan and Nigeria, whereas only anecdotal evidence is available in Tanzania. This study, therefore, sought to explore the prevalence of external influence on valuation in Tanzania. A survey of 90 valuers from both the private and public sector was carried out using a selfadministered questionnaire. Findings from the survey suggest that 95% of valuers are aware of the existence of some form of external influence. Further, the respondents identified clients (83%), third party to transaction (78%), Chief Government Valuer (61%) and superior at work (50%) as being the main sources of influence. Interestingly, some valuers observed political statements as having influence in their valuation undertakings. External influence was observed to be more pronounced in valuation for mortgage, taxation and compensation assessment. These findings suggest that external influence observed in Tanzania is likely to introduce bias in valuation as valuers independence is compromised. This may be one of the explanations for the continued public outcry on the credibility of valuations.