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Land Sector Corruption in Ethiopia 303
regulations and directives comply with the requirements and objectives
of overarching federal laws.
With limited systems in place to record rights, particularly in urban
areas, and limited oversight, officials have plenty of opportunities to
falsify documents. It is not uncommon for parcels of land to be allocated
to many different parties, sometimes to as many as 10 different parties,
from whom officials and intermediaries collect multiple transaction and
service fees. 11
In short, land is being allocated that should not be allocated. The master
plan for Addis Ababa is being ignored, and most of the green areas and
some of the roads in the master plan have been allocated for private use. 12
The uncertainty in land documents and the issuance of forged land documents
creates opportunities for fraud, as box 7.6 explains.
In July 2007, the FEACC reported on an investigation of land sector
corruption in five of the 10 subcities in Addis Ababa (FEACC 2008b,
2008c). The investigation report issued these key findings:
• The relevant laws, directives, and manuals for the allocation of land
through the lease system were unclear, creating opportunities for
corruption. In one cited case, a lease award to a successful bidder was
canceled and the lease awarded to another by negotiation without reasonable
cause. In some cases, bidders had submitted forged bank statements
and paid bribes.
• There was frequently a conflict of interest for lease board members
who often played a key role in the whole process, from identification
Box 7.6
Use of Forged Land Documents in the Finance Sector
A former local bank president cites a case in which the bank had lent Br10 million
to someone who had produced a title deed. This person had not repaid the loan
and had fled to Qatar. Another person then appeared with what he claimed to be
the true title deed. The bank ended up writing off the debt. The banks do not trust
title deeds and have all established informal systems to validate documents.
These systems include interviews with neighbors and investigation of municipal
tax records, among other means, which significantly increase the time and costs
of acquiring loans and are an inefficient use of resources.
Source: Author.