{UAH} Why issuing land titles will not reduce poverty levels in Africa - News - www.theeastafrican.co.ke

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Why issuing land titles will not reduce poverty levels in Africa - News

Economists say that land ownership is one of the tools of empowering the poor, but studies show that the cost and red tape involved in obtaining documentary proof of ownership is prohibitive for the continent's poor.  

The high costs and bureaucratic processes associated with acquiring a title deed are driving the poor deeper into poverty.

Policy experts, meeting in Washington DC for the annual World Bank Conference on Land and Poverty recently, warned that the land-titling programmes in developing countries are not sufficient to reduce poverty.

Land ownership among the poor is one of the new tools for fighting global poverty. But experts say that the land registration programmes in most of sub-Saharan Africa may not bring about the kind of transformation that was hoped for.

In his address to the delegates at the Washington DC conference, Stefan Dercon, chief economist of the UK's Department for International Development, said some of the programmes designed to secure land rights for the poor may end up as white elephants.

"Are we building sustainable, transparent systems that support growth, job creation, poverty reduction and equal opportunities?" Mr Dercon asked.

Hernando de Soto, the acclaimed Peruvian economist, is credited with formulating the idea of issuing land titles as a way of empowering the poor.

In his book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, Mr de Soto argues that poor people in the developing world have failed to benefit from capitalism because they hold "dead capital." This is property that is not officially recognised and can be in the form of land, houses and businesses.

In his calculations, the economist estimates that "dead capital" held by the poor in the developing world is worth about $9.3 trillion.

Mr de Soto's idea that formal recognition of property held by the poor can help reduce poverty has appealed to many governments and international development agencies.

With proper titles, the poor can use their land as collateral to access credit, which they can then invest in productive areas to increase incomes.

This idea has inspired governments in East Africa to issue titles to the poor as a strategy to radically reduce poverty. However, many studies now show that these land-titling programmes are having little, if any, effect on the lives of the poor.

One of the biggest obstacles poor people face when trying to acquire titles is the cost and the amount of bureaucracy involved.

In Kenya, one has to go through 14 stages before acquiring a title. The whole process costs about $300, a huge amount for the majority in a country where the minimum wage is $140.

It gets even tougher for those who try to formalise land rights in the rural areas. In much of rural Kenya, land ownership is governed by customary tenure, and the current land-titling programmes seek to replace this with individual titles — something that has torn many families apart.

Family members whose claims to land are based on customary tenure have often been overlooked by the courts in favour of the holder of the title.

Economists say that land ownership is one of the tools of empowering the poor, but studies show that the cost and red tape involved in obtaining documentary proof of ownership is prohibitive for the continent's poor.  

Dr Muhammed Swazuri, chairman of the National Land Commission, says that these are some of the challenges his office is trying to address.

"We are seriously looking into this matter. There are areas where the commission, together with the Ministry of Lands, Housing and Urban Development, can help, but costs such as survey fees may be beyond us," Mr Swazuri said.

These bottlenecks may explain why only 5.6 per cent of Kenyans have managed to get title deeds in the past 50 years. One of the central arguments for handing titles to the poor is that they will be able to access credit and therefore improve their productivity.

But even for those who successfully acquire titles, their lives have not necessarily become better. Many studies show that poor people with titles are no more likely to obtain loans than those without.

A survey done in South Nyanza district in Western Kenya found that only 3 per cent of the 896 titles issued there had been used to secure credit seven years after they were given out. Without a title, even those who potentially qualify for credit cannot transact with formal financial institutions.

In Tanzania, Mr Dercon said the use of titles to empower poor people has not worked well, with only a handful having received the documents since the enactment of the Land Act in 1999.

The process of acquiring titles is riddled with prohibitive costs and bureaucracy. Poor Tanzanians living on less than two dollars a day may find it a challenge to raise over $200 to get a title.

"In Tanzania, 15 years of providing the poor people with the Certificate of Right of Occupancy has not worked, with only 3 per cent of those in the unplanned settlements having titles," he said.

In 2003, Tanzania passed an amendment to the Land Act to make it easier for title holders to access credit from the banks. But commercial banks will not give credit to holders of less than 20 acres, leaving out the majority of small-scale farmers.

In Uganda, the situation is even worse, with only half a million of its citizens having acquired title deeds since the country gained Independence in 1962.

"Poor people are willing to get titles if the cost is affordable and the processes are less bureaucratic. The current system is good for the bureaucrats, not for poor people," said Mr Dercon.

A survey conducted by a Kenyan scholar, Celestine Nyamu, found that a large number of people whose land titles have been processed have not gone to collect them.

Economists say that land ownership is one of the tools of empowering the poor, but studies show that the cost and red tape involved in obtaining documentary proof of ownership is prohibitive for the continent's poor.  

In the Kisumu district land registry, out of 109,545 titles that had been processed, only 24,893 (23 per cent) had been collected. In eastern Kenya, only 22 per cent of the households had picked up their title documents since the registration began in 1970.

The cost and red tape, lands experts admit, discourage poor people from seeking titles.

Ibrahim Mwathane of the Land Governance and Development Institute in Kenya says that delivering land rights for the poor may not be the solution to poverty.

This means that while countries like Kenya, Uganda and Tanzania talk about transforming the livelihoods of the poor by providing them with land tenure, they may have to explore other ways to fight poverty.

One of the interventions economists think can help the poor is for the government and donors to subsidise some of the costs of acquiring titles.

In Tanzania, when the costs of acquiring titles was subsidised, a surge in land registration was recorded.

— Additional reporting by Trevor Analo

Sent from my BlackBerry 10 smartphone.