Countries fight over it, communities fight over it, and individuals fight over it. The possession of land is one of the fundamental rights of man, but when contemplating a hotel development, whilst possession mat well be “nine-tenths of the law”, it’s that other 10 per cent that can be the deal breaker.
Generally speaking, land tenure and title in sub-Saharan Africa are a mine field. Vast tracts of land, nomadic peoples, the imposition of Western ownership concepts (normally intended to benefit settlers and disadvantage the indigenes), civil wars, nationalisation, dictatorships – the combination has led to the situation where, sometimes, the ownership of a piece of land is virtually impossible to determine. And there is a vicious circle working here, too – according to Peter Hertz of ARD, Inc. “insecure land tenure and property rights and the inequitable access to land and natural assets are two of the leading triggers of violent conflict, population displacement, the over-exploitation of natural resources, and political instability” in Africa.
Add to that the problems of transferring title once proven, and it is no wonder that land issues are one of the main impediments to hotel development (and other forms of physical development, too) in sub-Saharan Africa.
Take the example of Ghana, where there are four different types of land title – State land, Vested Land, Customary/Stool Land, and Family/Private Land. The method of acquisition varies by type – for state and vested land (which is customary land administered by the government), negotiations for acquisition are with the government, may or may not be straight forward. Purchasing Stool land, however, means participating in the tribal customs of the specific area, and negotiating with the Chief. Whilst this is of an inherently local nature, the process is overseen and approved by the State, to avoid exploitation (of either party!).
Negotiating purchase of family/private land does not need the concurrence of the State. But, as with any purchase of land, it does need registration and, according to the World Bank, Ghana scores well compared to the sub-Saharan African average, requiring five procedures, which take 34 days and cost just over 1 per cent of the value of the land. The regional average is 6.7 procedures, 81 days and 9.9 per cent of value. Uganda and Nigeria require 13 procedures, The Gambia takes 371 days to register title, and in Chad it costs an eye-watering 23 per cent of value. Regularising the law on land title is one thing, but the more difficult and costly it is to register a change of title, the greater the chances that formalized titles will quickly become informal again.
One cannot write about land title and transference in Africa without a reference to Nigeria’s infamous 419 scams. Everywhere you go you see signs on buildings and fences, stating what must puzzle newcomers “This land/building is not for sale. Beware 419”. Adding to the confusion of land title and ownership – and perhaps because of it – fraudsters make a living from selling property they don’t own to unsuspecting purchasers, sometimes several times over!
In addition to the economic and financial aspects of land purchase and usage, hotel developers, particularly (but not only) in resort areas need to be aware of the social implications of their plans. The lack of land title on the part of the local community may provide an opportunity for perfectly legitimate purchase of a prime beachfront spot – but that may be the best launch point for their fishing boats, used by countless generations. Or it may exclude the local women from collecting shellfish there, to feed their families and to earn an income. Or, and as serious as the former problems, it may be a place considered sacred by the local people, which could “curse” any development there, and discourage the local people from working there.
If higher levels of economic growth are to be promoted, and the resultant benefits will include poverty alleviation, ensuring a favourable climate for investors is essential. Tourism, and the development of hotels and other lodging establishments is one of the largest consumers of capital in the sector, is clearly a contributor to economic growth and poverty alleviation in most Africa countries, and will only be encouraged if access to physical space, i.e. land, is made easier – not only for foreign investors, but also for indigenous entrepreneurs, who own and operate the vast majority of the businesses.
And, instead of the vicious circle described above, a virtuous circle can be created, with secure property rights giving confidence to investors to do business, providing collateral to enable access to credit, and contributing to the development of financial systems – to the benefit of the economy as a whole.
W Hospitality Group, Lagos