Capital Ethiopia Newspaper

Public should have been consulted about lease policy


Recently the House of Peoples’ Representatives approved a new land lease legislation that forces every urban plot to be governed under the lease.
The public at large is confused about the new Urban Lands Lease Holding. Feedback from meetings and forums indicate that public imput on the matter was lacking.
The lease law was printed in the Federal Negarit Gazeta of FDRE on November 28, 2011.
Many are saying that the new lease policy would minimize the chance to own property and will leave many, who could not afford to pay rent for the land they built their home on, to be displaced as no person can get land without a lease.
On the other hand high officials from the Ministry of Construction and Urban Development and Addis Ababa City Administration said that the public should wait for the further detailed regulation that will be ratified by the Council of Ministers. These officials repeatedly said that after further details of the law are ratified the public will know that the regulation will help the community and it was not be as it is assumed now.
However many are sceptical of the new law saying that it will make it difficult for them to own property in the future as part two article 5 of the proclamation states “…. No person may acquire urban land other than the lease holding system …”
Article 6 on conversion of old possessions to lease holding sub article 1 states “the modality of converting old possession into a lease hold shall be determined by the Council of Ministers on the basis of a detailed study to be submitted by the Ministry; provided however, that the process of such study may not preclude a revision of the existing rental rate applicable to old possessions”. This will force everyone to pay for the land their property is on. The lease price will also be calculated based upon the market price around the area. What if someone around Merkato area could not afford to pay the price for the lease that is calculated based on the market price around the area that could go over 10,000 birr per square meter. Will the government provide replacement land for that citizen?
Currently sub cities are waiting for a directive to implement the new lease policy from the city government. According to the lease policy someone who leased a plot will have to pay a 20 percent down payment upon receiving the land. But this could be changed when the Council of Ministers ratified the detailed regulation or not. We don’t know that.
Officials of the government insist that the public won’t be disappointed by the detailed regulation. What guarantee does the public have now that the regulation won’t be upsetting?
The government is now trying to discuss the policy with the public in different parts of the city after it was ratified by the House of People’s Representatives but some say that it was too late for discussion. These people said that the discussion with the public should have been done before the proclamation was ratified.    
Some are also questioning how the government is going to treat investors who bought factories and industries from the Privatization and Public Enterprises Supervising Authority (PPESA) on conditions that the property is sold to them without any limitation or mention of the plot will be included in the lease.
Others also question how they are going to use their property as collateral for loans from banks. Government officials, however, argue that the new law is perfect for banks and the investors who wish to use their property as collateral.
Moreover, banks will lose money if they auction off properties they took as collateral before the law was ratified. They have to pay the lease price of the property they took as security.
The Addis Ababa City Administration also started to enforce the new policy that will force you to rent the land your property lays for a limited period of time not exceeding 99 years if you buy it after now. Any individual will have to lease their land from the government even if their property was constructed decades back.