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Land Sector Corruption in Ethiopia 301
However, the situation is even more complex in urban areas, where
land has been allocated as leases to influential, well-connected individuals
but not put to use as required by existing regulations (as illustrated in
box 7.4). There are three basic ways to obtain land in urban areas (as
box 7.5 explains), but there are gaps and a lack of clarity in the policy and
legal framework and no efficient, transparent system to implement policy.
As a result, there is no vibrant land market and no conclusive means to
assess land rights and land value, among other matters.
Nor is there any policy for land transactions: “Almost all transactions
involving land most often incorporate corruption because there is no
clear policy or transparent regulation concerning land” (Reporter 2008).
The uncertainty in rights, the lack of clear rules, and the high levels of
informality encourage corruption. The FEACC, in the July 2007 report of
Box 7.4
Urban Land Speculation in Ethiopia
Under the lease system that applies in urban areas, land is allocated to private
individuals and organizations with the obligation that allocated land be developed
according to the planned use within 18 months. Despite this clear
requirement, there are numerous cases of allocated land being fenced off and
remaining idle for long periods of time. Cases reported in the media include
the following:
• The Bahir Dar Resort Hotel, sold by the Development Bank of Ethiopia more
than three years ago as a largely completed development, today remains
unopened. 8
• The Hora Ras Hotel in Bishoftu, allocated more than 10 years ago to a developer
who planned to build a five-star hotel, has not occurred to date.
• A modern resort hotel, planned for land acquired in Arbaminch town more
than a decade ago, has not been built.
• A Sheraton hotel and a 50,000-seat stadium, both planned for land allocated
in Adama, have not been built. 9
In late 2008, the Oromia Investment Commission announced the results of a
study that documented land held by inactive developers and was reported to be
taking action against more than 60 investors who had submitted false bank
statements to the commission. 10