Property rights formalisation in Africa

By: Tor A. Benjaminsen and Espen Sjaastad

Tenure security is an overarching concern in debates about land and land rights in Africa. Much of the security debate today centres around the question of whether and how to formalise rights. In part this is the continuation of an old debate, begun during colonial times, about the costs and benefits of introducing title deeds in rural areas. But it has also been animated and enriched by research into ‘informal formalisation’ of property in Africa (see Benjaminsen and Lund, 2003), the ideas presented in The Mystery of Capital by Peruvian economist Hernando de Soto (2000), the establishment of an international Commission for the Legal Empowerment of the Poor, and a recent flurry of formalisation programmes of very different types and scopes across the African continent.

Formalisation can broadly be defined as the provision of state-sanctioned property representations, in the form of e.g. title deeds. The goals of formalisation seem mostly admirable and uncontroversial: providing poor land holders with the security needed for credit access and the incentive to invest, making people accountable, facilitating the collation and utilisation of information, and bridging the often considerable gap between state and local institutions. Against this, however, critics have raised a number of reservations that attach to both the formalisation process and to its outcomes. Among these are the risk of further marginalisation of weak groups (the poor, herders, women), the lack of discernible benefits associated with title deeds in Africa in the past, the often weak state presence in rural areas, limited government resources for effective reform, and the danger throughout much of rural Africa of destroying effective and locally embedded institutions (see e.g. Platteau 2000, Benjaminsen 2002, Benda-Beckmann 2003, Cousins et al. 2005).

In this short article, it is not possible to provide a comprehensive review of the issues at stake. Instead, we take a brief look at how the specific issues of timing, speed, and flexibility relate to the formalisation process, drawing in particular on recent processes in Mali and Tanzania.

Mali: Timing and speed
Rapidly expanding urban zones are probably the most dynamic places in the world. Parallel to an increasing population density processes are often found related to changes in physical infrastructure, cultural composition, social relations, legal jurisdiction, political constituency, trade, and natural resources.

The two major towns in the Malian cotton zone, Koutiala and Sikasso, experienced rapid growth in the 1990s, subsequent to a boom in cotton farming and exports in the region. Around the urban periphery of these towns, land was undergoing rapid transformation with respect to use, value, ownership, and legal status (see Benjaminsen and Sjaastad, 2002, for more on this case study).

Prior to transformation, these lands were mainly used for grain cultivation and as grazing lands by local farmers. With a growing urban demand for land, an informal land market emerged. Transactions were often attended by quasi-legal documents, with descriptions or rough sketches signed by witnesses or stamped by local government officials. Townspeople purchased land mainly for the purpose of engaging in small-scale fruit production and agriculture. At some point, however, most of these lands were expropriated by government, primarily for the purpose of developing residential areas. At the end of the process, lands would therefore be occupied by urban dwellers with residential occupancy permits. Within this market chain, there is also frequently a role for middlemen and at least one large-scale speculator.

Associated with these changes in use, ownership, and legal status, was a huge increase in the value of land, with more than an 18-fold multiplication of its net value on average. Two factors were particularly important in terms of to whom this increase in value accrued. First, titled land was protected from expropriation, and holders of titles could, upon partitioning of the land, capture the whole rent increase. But titles could only be obtained at the regional office, after a long and tiresome process, at prices (including bribes) that were beyond the means of most smallholders. Second, compensation for untitled land was uncertain, inadequate, and was sometimes calculated according to a formula that awarded compensation only for the first 3.5 hectares of any given plot. The result was an extreme version of a buyer’s market. And while the original land holders could not even realise the productive value of their land, rent was instead captured by the government (central and municipal), its officials, and the speculator.

MAIN LESSONS FROM MALI
First, it is clear that there was a grassroots demand for formal title to land on the urban periphery. This demand was expressed both through the ‘informal formalisation’ observed in the creation of quasi-legal documents and through the long line of people who waited, mostly in vain, for the government to award provisional and full titles. Poor people have, however, little access to the titling process, due to the high costs involved in terms of fees and bribes and the need to be able to read and write French. Hence, they become the losers of a status quo, while corrupt bureaucrats and other urban elites are the winners. This underscores the need to introduce a flexible, low-cost, decentralised and open approach to formalisation, which can adapt to various local circumstances. This is not a technical issue, and the solutions are not technical. It is a political issue involving issues of corruption and good governance.

Second, a growing economy and an associated demand for new residential areas made formalisation inevitable. It was, therefore, not a question of whether, but of when and how formalisation should take place, and who should benefit. For original holders to benefit from the increase in land values, formalisation would need to take place prior to, rather than subsequent to, expropriation of their land, and formal rights would need to provide just compensation when land is expropriated.

Tanzania: Blueprinting development?
Recently, the approach to formalisation of property rights advocated by the Peruvian economist Hernando de Soto and his Institute for Liberty and Democracy (ILD) has become increasingly influential. According to de Soto (2000), the main cause of poverty is the continuing lack of access to formal property rights among poor people in poor countries. More than 90 percent of people in developing countries hold their land and businesses as ‘dead capital’ under informal arrangements, outside the ‘bell jar’ of the formal economy. If the poor majority are to gain access to the benefits of capitalism, this dead capital must be registered and integrated into national, unified property systems and countrywide formalisation programmes must be implemented. To establish such programmes, ILD has developed a universal model including four stages that a country must go through if the aim is to take the big leap from informality to formal property rights and the rule of law. The ILD website gives the impression that this model has been implemented in 20–30 countries, but in reality no single country has gone through the four stages.

This blueprint to development has, however, attracted the attention of many top politicians and officials in the international development industry. In Tanzania, former President Benjamin Mkapa managed in 2004 to get the Norwegian government, which also included several de Soto fans, to fund the first two stages of such a formalisation programme. It appears that the ILD had hoped that Tanzania would become a demonstration country for the virtues of the model proposed. Instead it became a demonstration of how ILD consultants exhaust most of the allocated budget, and of their lack of engagement with the administrative system in the country and with related programmes.

In addition, the methodology of the programme has recently been tested in the Handeni District. The test showed an increased conflict level among local people. It also resulted in land grabbing by people with resources and information about the process, while more marginal groups such as herders and women lost out.

A countrywide implementation of such a programme would most certainly result in an increase in the number of landless people and a concentration of land ownership. But the biggest risk of blueprint formalisation programmes including rural areas is related to an increased level of conflicts. In most of Africa, rural areas are dominated by overlapping and communal use. A ‘clarification’ of rights in such circumstances would be highly risky and might end up increasing the conflict level in the country. This happened in Côte d’Ivoire, where the government supported by French aid and the World Bank implemented a new rural land law in the late 1990s that played a role in the outbreak of civil war in the country. The law requires the registration of all rural land. In the process of clarification of land rights, secondary users lost access. Several thousand Burkinabé were expelled from their farms in western Côte d’Ivoire, which further fuelled an explosive situation. One of the demands of the rebels has also been a modification of the land law that currently prohibits ‘foreigners’ from inheriting land (see Bassett et al., 2007).

Conclusions
In certain high pressure areas where there is a clear demand for formalisation, governments should facilitate poor people’s access to the process. In the dynamic zones of rapidly expanding urban centres, where governments possess key responsibilities towards residential development, non-formalisation is not a choice. Instead, the timing, speed, and manner of formalisation will largely determine the distribution of the windfalls that invariably attend rapid increases in land scarcity. If governments fail to allocate sufficient resources to such a formalisation process and to make it generally accessible by ordinary people, it will inevitably be co-opted by officials and wealthy elites.
Formalisation of property rights in rural areas, however, is more complex and problematic. Blueprint countrywide approaches to formalisation, such as the one promoted by the ILD, imply large risks, the most serious of which is the possibility of an increased number and intensity of land use conflicts.

References

Bassett, T.J., C. Blanc-Pamard and J. Boutrais, ‘Constructing locality: The terroir approach in West Africa’. In Africa, no. 77 (vol. 1), 2007.

Benda-Beckmann, F.V., ‘Mysteries of capital or mystifications of legal property?’. In Focaal: European Journal of Anthropology, no. 41, 2003.

Benjaminsen, T.A., ‘Formalising land tenure in rural Africa’. In Forum for Development Studies, no. 29 (vol. 2), 2002.

Benjaminsen, T.A. and Chr. Lund, Introduction in Benjaminsen Lund (eds), Securing land rights in Africa. London: Frank Cass, 2003.

Benjaminsen, T. A. and E. Sjaastad, ‘Race for the Prize: Land Transactions and Rent Appropriation in the Malian Cotton Zone’. In European Journal of Development Research, no. 14 (vol. 2), 2002.

Cousins, B., T. Cousins, D. Hornby, R. Kingwill, L. Royston and W. Smit, Will formalising property rights reduce poverty in South Africa’s ‘second economy’? Questioning the mythologies of Hernando de Soto. Plaas Policy Brief no. 18, 2005.

de Soto, H., The mystery of capital: Why capitalism triumphs in the West and fails everywhere else. New York: Basic Books, 2000.

Platteau, J.-P., Institutions, Social Norms, and Economic Development. Newark: Harwood Academic Publishers, 2000.