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Feature Article of Sunday, 11 May 2003

Columnist: Asumadu, Kwame Dr.

Reform Of Ghana's Land Tenure System

– AN OPPORTUNITY TO ENHANCE SOCIO-ECONOMIC DEVELOPMENT

Very few people, who have had an experience with the existing land tenure system in Ghana will disagree that it is anachronistic and in need of urgent reform. Ghana’s land tenure system impedes the country’s socio-economic development, and is completely out of place in a modern, progressive country. Ghana’s land tenure systems

Under the existing arrangement, traditional land-owning authorities (stool chiefs, clan heads and skins) hold allodial (absolute ownership) title to land on behalf of their people. Thus outright ownership of land is still a rare form of land tenure in Ghana.

Leases and rentals over a satisfactory period of time for economic/commercial activities are possible and involve permission by the allodial titleholders to use the land. However, the land must revert to the community or the allodial titleholder at the end of the lease or cessation of the activity for which the lease was granted in the first place.

Problems associated with the existing system

The variety of customary arrangements, combined with some inconsistencies in the procedures for deed and title registration, make it difficult, though not impossible, for potential investors to acquire large parcels of land for large-scale economic activities. This is particularly the case where the activity has a long economic gestation period. In addition, the different traditional ownership structure, in some cases, requires negotiations with a large number of allodial titleholders. Such negotiations can often be protracted, cumbersome, frustrating and expensive.

The economic impacts of the current system

The current land tenure system constitutes a serious disincentive to investment in Ghana’s economy. The lack of several large-scale commercial agricultural projects in Ghana, similar to those existing in some francophone West African countries such as the Ivory Coast, can be partly attributed to the problems associated with acquiring land for economic activities.

It is unlikely that serious large overseas investors would be prepared to undertake protracted negotiations, on a one-to-one basis, with several allodial title holders in order to put together suitable large parcels of land for large-scale commercial agricultural projects. Even where this is possible, investors potentially face the problem of on-going litigation over the legal right of the land they have acquired or leased.

It is not uncommon for the rights to land, which has already been leased or rented and compensation duly paid by an investor to one allodial titleholder, to be challenged or disputed by another allodial titleholder. One commonly hears of stories from friends where disputes have arisen when individuals had successfully negotiated parcels of land for residential/commercial construction only to be challenged by other parties who also claim ownership of, or interest in, the same parcel of land.

Throughout our history, the nation’s peasant farmers have done a wonderful job in feeding the country based on subsistence agriculture. This mode of production may continue to sustain the nation if the aim is only to satisfy Ghana’s domestic food needs. Peasant agriculture cannot continue to meet Ghana’s domestic food needs as well as exports.

It is encouraging that several entrepreneurial Ghanaians are exporting all types of local foodstuffs to meet the growing demand in North America, Europe and Australasia, where the majority of the Ghanaian Diaspora resides. However, today, export quotas for some food stuffs appear to be achieved at the expense of domestic requirements, particularly during lean years such as in times of drought.

Some Ghanaians may not be aware of this but during the recent droughts in the 1990s, Ghana imported plantains from the Ivory Coast to supplement domestic production. This was possible because unlike Ghana, the land tenure system in the Ivory Coast makes it easier for large-scale commercial agricultural activities to co-exist with peasant agriculture.

Not long ago, I read an article published by The Ghana Homepage about a plan to establish a starch-producing factory in the Central Region. The article reported that the Government was encouraging the local farmers to establish cassava farms to feed the factory.

Starch is a highly sought after industrial product globally. Ghana is well placed to become a competitive and efficient producer of industrial starch. However, the country will not be able to achieve this objective if the expectation is that our peasant farmers, hardworking and dedicated as they are, will be able to produce the cassava feedstock required for an industrial scale production.

In 2000, I visited Malaysia and was amazed at how they have transformed oil palm into a national export product. Indeed Malaysia’s Oil Palm Research Institute describes palm oil as “liquid gold”. The sad part of it is that Malaysia’s now lucrative oil palm industry was developed based on sample seedlings taken from Ghana’s Agricultural Research Station at Kade. Malaysia has achieved the reputation of an efficient and cost-effective industrial palm oil producer globally through large-scale plantations rather than relying on small-scale peasant farmers. The expanse of Malaysia’s oil palm plantations becomes immediately obvious to a foreign visitor, as they stretch for kilometres on end from the airport to downtown Kuala Lumpur. Indeed “a sea of oil palm plantations” surrounds Kuala Lumpur.

Options for addressing the land tenure problem

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 so as to make it easier 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 our 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 the author is 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. The advantage of this option is that potential investors will deal directly with the Government of Ghana, which is a recognised legal and sovereign entity rather than some obscure, individual traditional land-owner(s). This practice can be expanded, formalised 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 President Kufour 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, which in the end will unleash untold hardship on its populace.



Dr Kwame Asumadu MAICD
Director Asumadu & Associates*

Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

*Asumadu & Associates is an Australian-based consultancy business, which operates in the following areas: ? Project Management ? Policy and strategy development ? Governance and organisational change ? Business development ? Developing funding applications ? Group facilitation

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