Unlike the previous two lease laws that have been
passed, the urban land lease holding proclamation,
passed on Tuesday, October 12, 2011, heard hardly
any debate or discussion.
The bill for the law did not get to see the
traditional procedures of being tabled to parliament
by members of parliament (MPs), discussed by a
relevant standing committee for review, and then
sent back to the parliament for discussion with the
public before being passed.
The provisions in it were topics that have taken the
public by surprise; dumbfounding many in the city.
All old land possessions will be put under a lease
system, according to the law.
However, whether this is to mean that lease payments
will be made on previous holdings or just governed
by the length of holding limited under the lease law
remains elusive. The modality of conversion has yet
to be determined by the Council of Ministers on the
basis of a detailed study to be submitted by the
Ministry of Urban Development & Construction (MoUDC).
The law was passed, with only one objection coming
from Girma Seifu, the sole opposition MP (Medrek).
“What can I say, the government is clearly telling
us that it is becoming part of the land grabbing
mob,” Girma told Fortune. “Even if the council does
not levy lease payment on old possessions, I think
this only means the government is telling property
owners that their house is likely to be taken away
from them when the lease period is over.”
A period of lease may be renewed upon its expiry on
the basis of the prevailing bench mark lease price
and other parameters, the law says, however the
lessee shall not be entitled to compensation where
the lease period is not renewed.
Another disappointment is the provision for the
transfer of leasehold rights before commencement of
construction or half-completed construction. In such
cases, the lessee only retains the effected lease
payment including interest, value of the executed
construction and five per cent of the transfer lease
value. The remaining goes to the appropriate body.
When plots are parcelled while converting old
possessions into leasehold, the owner of the plot
has to pay the lease price of additional land
obtained, says the new law, however, only property
lying on the plot given up gets compensation.
This is contrary to what the government has been
saying about rent seeking, according to Girma.
“Who is the rent seeker know, the development
strategy of the government states that an economy
which depends on unprocessed natural resources is
rent seeking,” Girma told Fortune. “To be honest
this is nothing more than claiming the right to
exploit the country’s resources solely.”
Land has been a major source of corruption, the
government claimed last year when it took measures
on those who had leased land and not commenced
construction. The Addis Abeba City Administration
had reclaimed close to one million square metres of
land claiming developers had failed to start
projects according to the lease deal.
Under the new law, provisions have been set for the
duration of time to commence and complete
construction. A time limit of 24 months has been set
for small construction projects while 48 months was
set for large constructions. Those in between have
36 months to complete construction. This deadline,
although it can be extended, cannot pass exceed six
months for small constructions, or one year for
medium and large constructions.
The law is aimed at controlling corruption and abuse
prevalent in the previous land lease system, reads
the preamble of the law.
As a result, the law has dissolved the lease board
because it has failed to affect its responsibilities
transparently, which in return has led to an
unethical implementation of the lease law.
The proclamation, which repeals the former lease
holding proclamation, also states that, any officer
or employee in charge of implementing this
proclamation caught in activities with the intent of
obtaining undue advantage for oneself or another
might end up with up to 15 years of rigorous
Unless the offence is punishable with an even more
severe penalty under the criminal code, granting an
urban land in contravention of the proclamation is
punishable by seven to 15 years of rigorous
imprisonment and a 40,000 to 200,000 Br fine.
The punishment for failure to disclose any
information pertinent to a tender, restricting sale
of bid documents, distorting or reversing the
process of a tender is also set as five to 12 years
of rigorous imprisonment with a fine of 30,000 to
However, this will not solve the problem, contends
“Increasing punishment will not eradicate
corruption, its just leads to people asking for more
bribes commensurate with the possible punishments,”
he told Fortune. “What should be done is bringing a
The law was passed along with the proclamation for
the establishment of the Ethiopian Federal Police
Commission and a proclamation for Veterinary Drug
and Feed Administration and Control.
“I do not understand why they choose to make it so
fast and surprising,” Girma, who claims not to have
had time to read all the proclamations in the short
period of time allotted, told Fortune. “Such kinds
of laws have to be discussed by the public and the
responsible standing committee in the parliament.”