Urban Land Lease Policy of Ethiopia Case study on Addis Ababa and Lease towns of the Amhara National Regional state

SUMMARY Achieving efficient land use, encouraging investors and investment and realizing the cost of urban land and make an efficient use of it are some of the major national and regional goals in Ethiopia. To achieve these goals, the government of Ethiopia has accepted urban land lease policy as the alternative land tenure system so as to provide a room for individuals and investors to land to use land use rights through transferring from the state to land users. Once individuals or investors acquire these land use rights they acquire tenure. So that they can either sell or use it to the maximum economic benefit. Hence, security of land tenure is important to encourage investment in land improvements as well as the development of efficient land use through efficient and equitable land markets. Efficient functioning of land markets requires efficient and updated land registration systems which clearly indicate legal ownership of land. However, the lease towns of Ethiopia, like most cities in developing countries suffer from land market distortions caused by poor land development and management policies including poor planning, slow provision of infrastructure and services, poor land information systems and slow land transaction procedures. Distortions in the land market often lead to land speculation. If the land registration system develops in such away that it clarifies lease rights, it minimizes disputes and enables the government to use the land in its maximum economic use. Opinions collected from residents, investors and financial institutions in Addis Ababa and the lease towns of the Amhara national regional state is used to assess the major problems related to the implementation of the policy in an efficient utilization of urban land in encouraging investment and the appropriate use of the money generated from lease. We found out that from the view of investors, tenure security is more important than the mode of ownership. Hence, tenure security is important for investment attraction and expansion. Institutional constraints, legal gaps and proper land and mortgage registration systems should be given due attention so as to get the desired objectives of the lease policy.