Sunday, March 30, 2014

Options to address the land tenure problem in Ghana


     In this post, I proceed as a follow up on my earlier post titled “Land ownership in Ghana and its effect on Socio-economic development”. The premise of that post was to point out the socio-economic consequences of Ghana’s current land tenure system. In this post I present a few suggestions to fix this land tenure problem.

     To start with, the protection of investors’ interests is key to look into. To protect the interests of investors and also make Ghana an attractive destination for investment, it is necessary for the Government to reform our land tenure system and make laws that will make it easier for any investor to acquire large parcels of land for large-scale agricultural activities as well as other commercial projects. Measures, which ensure the legal security of deed and title registration over the period for which the land is rented or leased, are urgently needed. Given Ghana’s traditional system and cultural norms, it may not be possible for the Government to reform the land tenure system to the extent that land can be bought, owned and sold privately as occurs in some countries. Indeed I’m not advocating such a radical reform.

     One option for assisting with land acquisition for large-scale commercial/economic development would be for the Government to acquire land directly from landowners and pay compensation. The Government could then lease the land to potential investors at market rates, and the rental income paid as compensation to the landowners. Compensation could be in the form of either lump sum up front payment or an annual rent over the term of the lease. This currently occurs with some stool lands acquired by the Government for commercial/developmental activities through the Stools Lands Division within the Ministry of Land and Forestry in Ghana. The advantage of this option is that potential investors will deal directly with the Government of Ghana, which is a recognized legal and sovereign entity rather than some obscure, individual traditional land-owner(s). This practice can be expanded, formalized and enshrined in legislation and backed by transparent administrative guidelines and/or regulations for its implementation.

     Another option is for the Government to facilitate an arrangement whereby landowners can participate in economic projects as financial partners by converting the rent they would have otherwise received from leasing or renting the land into equity. Direct financial interest in large-scale projects can be a powerful way of achieving local community support and commitment.

      A third option is the creation of “land banks” where land owners who may wish to offer their land for leasing or renting on a long term basis, can register their details. Land banks can offer a “one-stop land acquisition service” for potential investors similar to the “free zones” concept. However, to obviate the problems relating to land acquisition in Ghana described above, it will be necessary for the Government to ensure that potential investors receive secure titles to the land they are renting or leasing over the life of the rental or lease agreement.

     With so many highly educated and progressive chiefs now occupying traditional stools and skins in Ghana, there has never been an opportune time for a government to champion the reform of the country’s land tenure system. This presents the current President of Ghana and his government both a challenge and an excellent leadership opportunity, to bring about a positive reform of the existing land tenure system for the benefit of the country.

     In the 21st Century Ghana, we cannot continue to ignore land tenure reforms. To do so will be at the expense of Ghana’s socio-economic development; this in the end will unleash untold hardship on its populace.

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