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302 Diagnosing Corruption in Ethiopia
Box 7.5
Access to Land in Addis Ababa
There are three basic ways of accessing land in urban areas in Addis Ababa:
• Through the auction process for leases being offered by the municipality. Under
a lease system introduced in 2002, the typical terms are a 20 percent down
payment with the rest paid over 15–20 years and an obligation to undertake
construction within 18 months of obtaining the lease. The offers for auction
have been limited and infrequent. The bidding has therefore been very
competitive.
• By negotiating with existing private holders of permits or leases, who typically
require a down payment of 100 percent of the agreed-on amount and are
expensive.
• By identifying a parcel of land and starting a process to negotiate a lease with
the municipality. Because there are no guidelines for this process, there is a lot
of corruption—“a very murky area,” as one urban specialist in Addis Ababa
described it.
The rules for access to land are not clear, and some people have better access
than others, largely due to relationships or payment of bribes. The private sector
usually cannot rely on or wait for the lease or auction process, so it usually looks
to other means. A key method to illegally allocate municipal land was to allocate
it to housing cooperatives controlled by developers who then sold off the land
informally. The resulting buyers were usually unaware of the legal status of the
land they were buying. The courts are not efficient in resolving disputes and can
be aligned with the corrupt officials. Unless the occupier is a permit holder or a
recipient of a lease from the municipality, the holding is insecure. The banks are
not comfortable with lease land and typically will only lend money based on the
amount invested and not on the land value.
Source: Author interview.
its investigation of corruption in five subcities in Addis Ababa, concluded,
“It is getting nearly impossible to get a plot of land without bribing city
administration officials” (Reporter 2007).
The land administration system is managed largely by directives in the
municipalities and regions. The directives are not published and are easily
changed. There has been little or no checking to ensure that regional