GHANA’S LAND TENURE SYSTEM, Capital and National Development

– Ministers Talk, But No Strategy or Action Plans

It is the year 2003, and for about four decades now since this writer started taking special interest and making observations, we hear our people in Ghana lament on the difficulty of registering land, of multiple land sales, chieftaincy disputes and the corruption that goes on through the land sales and entitlement methods we have inherited in our system. Now estimates are that it takes more than ten years to settle litigation on land through the courts. This system breakdown shows only one thing, and that is, lack of leadership in our nation.

There was an article on the Ghana’s JOYFM Website on July 12, 2003, entitled “Land Tenure System Is Disruptive – Minister”.

In the article the Minister lamented, as all leaders in Ghana and most Africa seem to do, on the need to attract investment, not to the nation, but to local areas. This concept of a region in Ghana thinking of attracting investment to their specific region is an interesting concept that the writer has hinted in previous articles as being a good policy the nation of Ghana should examine and work towards. It should be part of a decentralization policy our nation needs for accelerated development. The article reports:

“The Central Regional Minister, Isaac Edumadze says the present land tenure system has resulted in numerous conflicts, which does not promote development. He has therefore called on traditional authorities to liaise with district assemblies to ensure easy access to land, to attract investment. The Minister was speaking at the inauguration of the "Congress of Central Confederacy" on the theme "Forum for Accelerated Development of the Central Region of Ghana" at Cape Coast.”

Once again this article depicts the kind of Minister we have in Ghana under our current leadership of President Kufuor, just we had under other leaders. They can only talk, and lament, and sometimes admonish others, and wonder how things can change in Ghana. Such talk, as some of us have criticized and commented on, do not show much in terms of strategic ACTION plans and methods of IMPLEMENTATION of any Vision, assuming there is a Vision, to help solve our societal problems. Most of these Ministers are well educated, and some have lived overseas for long times. As such one expects their performance to be measured on parameters and criteria one can describe as international. The old idea of comparing one’s country to other African countries does not seem to be adequate anymore, since most products imported or exported to Ghana are compared on international levels of quality and pricing with no special considerations. Most our students who go overseas to study do not get any special considerations. We are as equal as any on earth! What is our excuse!

LAND and National Wealth:

Land is the source of wealth in any nation. Former US President Bill Clinton went to Ghana last year with Economist Dr. Hernando De Soto to talk about this. As a licensed Real Estate Broker and financier, it hurts the writer daily to see the value that we as a people don’t even know exist in Ghana as we struggle to seek employment and financing overseas. The writer has written articles over the years advising this government and previous ones on the need to start getting the “little pieces” together that will create an enabling atmosphere for international financial institutions to evaluate our people, our businesses, and offer lending as a source of our development. We should be in an era where lending to nations should be diminished to a bare minimum, and most of the lending to businesses directly. This cannot be done without internationalizing our way of doing business. Any Banker, in Ghana or elsewhere, evaluates risks in lending to others, and it is normally prudent not to lend to people or businesses without any previous credit evaluations and without knowing the exact physical location of the business for possible default collection. Showing a P.O.BOX number in Accra is as ridiculous as expecting a banker to simply lend one money on one's word of mouth. As such common logic would suggest that it is time our societies learned to modify our old business culture and our Banks started collecting and documenting credit data. We can cry about investors, but without finding out what the investors' criteria are, we toil in vain. Leadership in the Banking industry must come from the top, and support must be given to private credit databases to help coordinate national lending databases, and help reduce lending risks as done in the developed world.

FINANCING:

Financing is a complicated matter, but all societies learn to deal with it. Not long ago the practice of lending to a nephew from a richer uncle was common in Ghana. But society has changed, and new methods are called for. How about across national borders? Recent revelations show that it is wrong indeed for any international institution to lend to a segment of our society on the signature of an elected President whose constitutional powers do not entail encumbering the society or a segment of it, unless with the approval of the whole society through its elected body of Parliament. As such the only legitimate way is for segments of society to learn to raise capital though bond offerings and other means, and by finding ways that other societies have used. The major one is what Dr. De Soto implies in his book, "The Mystery of Capital", even though the book is not a finance guide book but an economic book. In the lending industry, most financing uses the encumbering of properties, and one needs to show clear title and ownership on the property to be used as collateral to secure loans.

Many Ghanaians overseas, and some in Ghana, are well versed in the subject of Finance, with MBAs and so forth, and some of our own friends and colleagues are Professors in Finance. Others have had a chance to work in America’s financial capitals. So what is our excuse? Can our government offer the leadership for these responsibilities to experts to help these local communities to raise capital, as opposed to a President exceeding constitutional powers to sign loans on behalf of one community or the other? It will be na?ve to suggest that the whole Akim or Ashanti region could not hire two or three of their natives working in say New York, to come home and work in the region, and pay them internationally competitive salary. Have we tried it? If not why does a President of the whole nation have to sign loans of one region?

Financing can come from many sources. From all historical records, despite government officials' personal antagonism, jealousy tactics and extortion often noted at the ports of entry, the greatest of the capital sources is from Ghanaians overseas. As cited by the Governor of the Bank of Governor in a recent report, Ghanaians overseas remitted in excess of $1.3 Billion to Ghana in 2002, counting only the official transactions. With better communications and management of intra-family business transactions, this writer estimates that number could triple, and Ghana may not need to borrow externally as much as we do. Ghana's search for so-called strategic investors to purchase government shares of Ghana Telecom and Ghana Commercial Bank may not be necessary or greatly reduced if proper channels are created to attract Ghanaians overseas to acquire these shares. Major shareholders will be able to move back home to manage these businesses in a modern competitive manner the way these experts learnt overseas. The good news is that a group in America called Ghana Investment Club (http://www.gicgh.com) have started to pull resources together to acquire some of such government assets.

Without financing one can only live in the past, pray to God, and hope for the best as we do in our rural communities till our people fell down and died. There are small artisans, carpentry, arts and crafts and gift shops, who could expand their businesses and offer employment to others if they had access to financing. The sum total of all these productions is what makes a nation succeed. America’s employment is composed of about 90% in small businesses. As a nation, we have to ask: Can we compete globally for our survival as we are doing today? If not, what choices do we have? We need to think strategically and change the way we do business. And the government has a role to play!

Methods and Means:

Stability of a region is surely one of the major risk factors for investors. In Finance, it is called Political risk. Our Ministers seem to understand this, as the Minister is again quoted to have said:

"No investor would invest his or her money in an area engulfed in conflict, it is for this reason that there is great concern over the numerous chieftaincy and land disputes that have bedeviled the region".

Whiles the purpose of this article was not on the numerous Chieftaincy disputes in Ghana, the Minister's comments are worthwhile to note. Another Minister confided a similar feeling to me of the frustration faced in spending all the holiday time in the constituency resolving Chieftaincy disputes. In today's world, many Ghanaians would welcome a new and innovative way of land tenure and distribution system other than what the ancestors left for us. Are the current leadership up to the task, or shall they leave that till another generation?

Our society needs to remember that investment is about risking ones own money, be it a Ghanaian, African or an American, individual or a company's money. Any savvy investor would not invest money in an area where the rule of law does not seem to work, and the political risk are too high. Ghana's land registration broke down long ago. Land registration is no more than the government registry and archive of sale transactions between buyers and sellers of land. The numerous cases of multiple land sales, disputes and fighting, all help to make our nations not only weaker, but to make them poorer. The writer can cite several cases of people who have tried to register land, and the process has taken more than ten years. Interesting enough, Dr. De Soto's research confirms this land registration delays as part of the reasons for the poverty and lack of capital exploitation in many nations, including Egypt, Haiti, Peru and the Philippines.

Any Hope Left? Some have given up on Africa, saying that it is impossible to catch up, or the risks are too high, even among our own natives abroad. This writer strongly disagrees. A referral to the strategy and methods used by former Premier of Singapore and his 35-year journey to bring his nation from a "Third World" status to "First World" status is a good worthwhile example to study and quote. There are simple items such as naming streets and numbering houses, putting these in a simple archival computer database, which we seem to find difficult. Our Ministers talk about them for a while, and then let things slide as they don’t seem to value the end of the implementation effort as Mission-critical, and as part of the President’s Goals and vision. The cost of some of these is very minimal, and we have the expertise to do them. Since the 1980s no Ghana government has taken this seriously, and yet occasionally the writer gets a letter asking if his company can help negotiate a loan from an American company for a company in Ghana. How can this be done when no government seems to understand the nature of modern business, risk factors and evaluations, and simple modern financial transactions? If there is any hope, it has to come from the leadership from the very top!

The intention of the writer and this article is not to criticize one particular Minister, but the writer felt this might be a time to bring attention on the actual efforts our Ministers are making to solve some of the problems we face in our societies. Two other quotes from the conference will illustrate:

"The Minister of Energy, Dr. Paa Kwesi Nduom, also expressed concern about the poor state of affairs, in spite of the region's numerous resources and said the Confederacy, should help in reversing the situation."

Again leadership is what is needed to bring to focus the key talent needed to solve problems and turn societies and organizations around.

"Dr. Edwin Amonoo of the University of Cape Coast and a member of the Planning Committee said, "the time has come for the region to wake up from its slumber and work towards its development".

These statements draw a question mark on whether President Kufuor still remembers his Vision for the Presidency, and his Mission plans. Does the President realize and hold certain key people responsible for achieving the Goals set under his Mission? As the saying goes, "the buck stops" with the President. Some of these things can be said to be "elementary", as detective Sherlock Holmes used to tell his friend and associate Dr. Watson. With the right leadership focus, these things can be said to be "elementary". Without proper implementation, any strategy is bound to fail. Individuals are trying, but for the society as a whole, one would expect the leadership to come from the top, for Ghana to achieve any meaningful development as a nation.