In Chap. 2, land rights in Ethiopia were discussed with a particular emphasis on the current land rights as envisaged in the present rural and urban land laws. Historical aspect of land rights that covers the entire period up to 1991 were also included. The significance of the historical background is imperative because in the absence of that it is difficult to fully grasp the arrangement that Ethiopia has today and the ups and downs that it has been passing through. The political instability and the dynamism of land laws that come with it have been the main causes for tenure insecurity in Ethiopia. Therefore, having stable laws and political system are of paramount importance to the stability of rights and tenure security of land holders. Perhaps, conversely speaking, stability of land rights and laws may also contribute a lot to the political stability; people who have real property may not want war and political instability that may affect and destroy their interests.

Before the eruption of the Ethiopian Revolution in 1974, rural land was significantly under the control of the state and the upper elites. In the northern part of the country, of course, the rist system permitted the peasant population to claim part of the rural land for subsistence. Since the rist land had been claimed based on lineage relationship, land was highly fragmented and land dispute between new claimants and the lineage was rampant. In spite of the fact that peasants were said to be the ultimate owners of their land, they, nonetheless, were burdened with numerous obligations by the state and the nobility. Besides the usual tax obligations that exacted a fifth and a tenth of their produce, the local nobility, gult holders, demanded from the peasant special gifts and manual services that strained significant part of the latter’s economy.

Similarly, but on a worst form, most of the land in the southern part of Ethiopia was controlled by the state, the church and the elite. The elite included the nobility and the military. After the re-annexation of the southern territories into the present Ethiopia, in the latter half of nineteenth century, the native peasants were completely evicted from their land. Because of the resistance they showed to the entry of imperial forces, their land was taken as punishment and they were left as gabbars, landless laborers. This injustice was perpetrated for the next 100 years until the removal of the imperial power from the throne by the revolution.

It does not mean, however, that the state was indifferent to the misery of the gabbars and peasants, especially of the southern territories. Starting from as early as the 1930s, the government had been trying to introduce some reforms that aimed at lessening the burdens of the peasantry. Different decrees and proclamations pertaining to land tax and abolition of manual services, imposed by the nobility on the rist holders and gabbars, were promulgated although they had little effect. The desired land reform that could enable the gabbar of the south as the owner of land was aborted and systematically frustrated by many actors during the imperial regime. Starting from the royal family, all the way through, the landlords in both houses of the parliament, many of whom were from the church and the military were against any land reform that might take away and reduce their land holdings.

The land ownership in urban centers was neither different from that of the rural one. Much of the urban land, especially in Addis Ababa, was controlled by the elite capitalists. The poor were forced to live in substandard and dilapidated rental houses, built by the elite for such purpose.

The significant characteristic of land ownership rights in the pre 1974 Ethiopia was that all urban land was owned privately. Although it was in practice as early as the seventeenth century, private ownership of urban land was formally recognized by law in the 1908 Addis Ababa Land Charter that allowed the holding of land in private ownership and its free transfer to others by sale or other modalities. Similarly, rural land in southern Ethiopia was held in private ownership, including ownership by the church and the state, both of which operated at the same time. Rural land was bought and sold freely in the south unlike that of northern Ethiopia. In northern Ethiopia, rural land was a lineage property owned by a family, and individuals were only given rist right, a right to use, rent, donate, and inherit to family members. Selling land outside the lineage was prohibited.

One of the fundamental reasons for the eruption of the revolution was the unjust land holding system in the country. Hence, the bold and unforgettable rallying-motto of the revolution, carried by university students and others, was read as “Land to the Tiller.” Since the burden of the system was heavy and the suffering of the peasant population deep, the effect of the revolution was similarly radical. In order to root out the feudo-capitalist political system, the new military government, the Derg, nationalized all land and distributed to the landless.

The Marxist military junta (a.k.a. Derg) passed two proclamations pertaining to the nationalizations of “all rural land and natural resources” and “all urban land and extra houses”. Proclamation No. 31/1975 that nationalized all rural land and natural resources abolished by a single stroke the age old land tenure system in the country and transferred all rural land to state ownership. The state became the sole owner of all rural land and it distributed it to the peasants of the north and south equally. Big landlords lost their land without any compensation and were treated equally like their peasants and gabbars by receiving equal size of land. On top of that, they were prohibited from using hired labor, which indeed was a very radical shift. The proclamation provided all peasants a lifetime inheritable land use rights over their possession. But, they were forbidden from selling, renting, mortgaging, bartering, or donating the land. Therefore, in spite of its equitability in terms of creating access to rural land to all, the proclamation was restrictive on the freedom of using the land rights. In this way, the motto “Land to the Tiller” was said to be aborted because the Derg that came to power under the slogan has paradoxically ended up itself as the sole owner.

The Derg had also passed a proclamation that nationalized all urban land and extra houses, Proclamation 47/1975. Just like the rural land, all urban land became under state ownership. Big urban land owners lost their land without getting compensation for it. Furthermore, the proclamation nationalized extra rentable houses from those who owned more than one residential and one business houses. Although the proclamation promised that compensation would be paid for the nationalized extra houses, in reality, the Derg paid nothing.

The Derg’s land policy was generally supported by the majority of the people, since land was from the beginning controlled by insignificantly few people. The proclamations were indeed rewarding to the many rural and urban poor who were landless and homeless all of their lives. It also eradicated the old system and its landed elites, which consequently triggered resistance and armed clashes. Especially, in northern Ethiopia, supporters of the old regime and rist owners, who were unhappy about the restrictive nature of the proclamation, refuted the proclamation and declared war on the Derg.

Another significant characteristic of this period was that the Derg started to take erroneous land policy measures such as repeated land distribution, forced villagization and grain requisition (that denies market value for the farmer), which ultimately became the reasons for the loss of the support the government had gained at the beginning. As a consequence of all these, the Derg’s 17 years rule was remembered as a period of famine, civil war and instability.

The Ethiopian history of land policy is still traumatized by the land tenure system of the imperial era. After coming to power in 1991, the current government could not bring about basic land policy change to that of its predecessor, the Derg. It seems the then Marxist students (later guerilla fighters and now government officials), who struggled under the slogan “Land to the Tiller” forgot about its true meaning and ended up in “state and public ownership of land”, when they adopted the new constitution in 1995.

The present land rights are incorporated basically in the current FDRE Constitution, the Rural Land Administration and Use Proclamation, and the Urban Land Lease Proclamation. Therefore, there are dual land laws governing rural and urban land. Today, the Constitution as well as the Federal and Regional rural land laws allow free access to rural land by any adult person who is a resident and wishes to engage in agriculture. As compared to proclamation 31/1975 of the Derg era, the land rights provided today to rural farmers have been liberalized. The land right is specifically termed as “holding right” that provides the holder prerogatives of using, renting/leasing, inheriting, and donating the land.

This, indeed, is a significant development as compared to the land rights incorporated in the previous Proclamation 31/1975. Nevertheless, the current land policy has also its own shortcomings which are concluded in the following criticisms: the land law promotes insecurity of tenure because it allows, among other things, periodic land redistribution; it is inefficient because it constrains land transactions and has inhibited the emergence of a dynamic land market; it promotes fragmentation of land and growing pressure on land resources because it discourages rural people from leaving their farms for other employment opportunities; it also gives the state immense power over the farming population because land is state property and the state may use that as a political weapon.

Even if the current rural land law liberalizes most of the land rights, it completely forbids that sale and exchange of land. It further imposes restrictions on lease and rental, inheritance and donation of rights. For instance, with due regard to the difference among regions, peasants cannot rent the entire size of their land; not more than half of the land may be rented out to fellow farmers or investors. A farmer may bequeath land only to family members, and children who have other occupation and income cannot benefit from it.

The equitability of access to land, underlined by the laws, is idealistic for there is shortage of land in rural Ethiopia. Most farmers live in the highlands where there is high population pressure and hence shortage of land. In the low lands of Ethiopia, where there is abundant arable land, the population is sparse. But the land policy and political environment do not encourage the movement of people from the highlands to the lowland areas or from rural areas to urban centers for the following specific reasons.

First, the residence requirement in the regional rural land laws obliges farmer to live in the same place continuously without any other additional income. This makes people to sit and wait in the rural area for fear of losing their land. Secondly, the residency requirement has been abused and wrongly interpreted by regional officials and is equated to “ethnicity” or “nativity” requirement, and thereby halting any future movement of farmers from other regions. Thirdly, since farmers cannot rent or lease the whole of their farm land to others, they cannot move to urban cities or other regions fallowing their land. Fallowing one’s land for three consecutive years entails the loss of the land. Fourthly, since farmers would lose their land if they get an income above some limit, they do not dare to search for alternative income by moving to the urban centers and other regions.

For this reason, there is a high population pressure in the highland rural areas and this creates three further problems: firstly, in order to accommodate the many landless people, the possibility of future land distribution hovers on the air and this creates tenure insecurity; secondly, kebele and woreda officials are giving land from communal lands such as grazing and protected forest lands to landless youth in the village, and this affects the environment; and thirdly, since many people are not moving out of their villages, land fragmentation is being exacerbated.

Urban land has been governed by a lease proclamation starting from 1993. The current proclamation No. 721/2011 was the third lease proclamation following the repeal of its two predecessors adopted after 1993. Although there are still significant amount of land properties acquired under the old permit system (Derg period), the intention of the law is to convert all urban land possessions into lease system. Lease is the cardinal system of urban land tenure. In urban centers, land can be acquired from government through auction, save a small chance of incorporating oneself into self-help housing associations and thereby getting a chance to a home. This means, most of the land required for housing and business will be transferred only through auction.

Because of this, there is a fear that the poor will be marginalized if it is only the highest bidders can get access to urban land. Latest data about the lease auction price showed that the price is extremely high which makes it unaffordable not only to the low income groups but also to the middle income ones. My argument is that the urban land lease proclamations’ focus is on generating income rather than also creating equitable land access for all, in a way that reflects the common ownership of land by the people and the state.

Because speculators were said to be beneficiaries of the old lease system by transferring lease right only to third persons, the law discourages the transfer of lease right (bare land) and lease rights with less than half completed constructions. If such right is to be transferred by sale, 95 % of the profit will go to the state. The sole justification behind this rule is to encourage people to complete construction before they transfer it to third parties. In a similar fashion, the law restricts the mortgage money one can borrow from banks. The amount of money one can borrow from banks by securing the lease right is made equal to the actual paid lease price on the land. Location is not to be considered for mortgage purpose. Further, people who are found to be transferring lease right without completing construction shall be barred from future auctions if they do so three times.

The absurdity of this rule is that the government’s wish to see more constructed houses comes at the expense of the violation of the constitutional right of property. The constitution under Article 40(1) cum (7) guarantees the full ownership of any construction on the land and the free transfer of it at any price to third parties. It is grossly unfair for the government, after receiving its price for the lease, to again claim profit from the sale. By and large, this practice will again harm the poor since the poor people are the ones who may be forced to sell their property before finishing construction. Lack of adequate funds, family and health reasons might force them to sell their property, and they do not usually get the full value of their property. It may also be the poor who is at the other spectrum of the transaction. This means, poor people may want to buy only bare land or unfinished properties for lack of finance. If the available houses in the market are only those finished ones, the poor, for sure, cannot afford to buy them.

The proclamation indirectly shows that land has no value for the holder. In addition to denying owners the full profit of sales price, the proclamation also denies people getting the best of a loan by mortgaging their properties. If the loan amount is equal or less than the paid lease price, where is then the worth of urban property? If location is not considered during valuation of assets for mortgage, and if buildings shall be valued based only on their cost replacement, then, what is the point of buying land and constructing buildings? If the business man is expected “to reap only what he sows”, then what is the wisdom of investment and profit? The whole idea behind this rule is odd and singular and does not have any feasible justification.

In general, the current urban land lease system impedes the free transfer of lease right and defies the very purpose of revising the former lease proclamation in that it exacerbates the concentration of land in the hands of the rich, while denying access to the poor.