Salient Features of the New Ethiopian Urban Land Lease Holding Proclamation No.721/2011 and its Implications on the Ethiopian Economy
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Date
2013-01
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Addis Ababa University
Abstract
This paper attempts to analyze the salient features of the new Ethiopian urban land lease holding
Proclamation No.721/2011 and its implications on the Ethiopian economy. Today the new lease
holding proclamation has become a burning agendum of discussion throughout the country. This
proclamation prohibits the allocation of urban land other than through lease holding and designs
a general direction through which all urban land holdings will in the future be converted to the
lease system. Moreover, it highly restricts transfer of use right on urban land, provides
unreasonably short time for commencement and completion of constructions, stipulates strict
measures for failing to commence and complete construction within the time and restricts the
right to appeal of aggrieved parties.
In order to identify the implications of the proclamation on the Ethiopian Economy, the writer
has consulted various literatures and collected information through interviews and focus group
discussions with different concerned bodies. Based on this it has been founded that the changes
and restrictions introduced by the proclamation have a negative bearing on the transaction of
immovables i.e., land and buildings, security of tenure of urban residents, the construction
industry, banking services, urban housing service, the market and investment. This in turn
affects money circulation, job opportunity and the income of both individuals and the
government which has a negative influence on the country’s economy.
The paper also attempts to show that there is no provision under the FDRE constitution which
provides that all urban residents will be allocated urban land through the lease system. It is also
indicated that the lease system designed by the proclamation which in principle allows land
allocation based on tender does not take in to account the capacity of most urban residents and
thus such residents as they are also joint owners of the land should be allowed a plot of land
based on the permit system at least for residential purposes.
Moreover, it is stated that the government should not impose any restriction on transfer of
properties attached with the land as long as individuals pay the required transfer tax and related
charges. It is argued that the period of payment of lease, commencement and completion of
construction should take in to consideration the prevailing realities on the ground. It is also
recommended that the government should pay compensation at market price for the properties
attached with the land and the permanent improvements on the land to the lessee when the
contract of lease can’t be renewed because of the fact that the appropriate body refused to renew
the lease contract when the land is needed for public interest. It is also stated that aggrieved
parties should be entitled to take their appeal on all issues to the regular courts regarding urban
land clearance. It has also been indicated that rather than trying to amend the proclamation
through a regulation the government should amend the proclamation itself as a regulation which
is enacted to implement the proclamation cannot legally amend the same.
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paper attempts to analyze, the salient features of the, new Ethiopian urban land