Property Rights and the African Concept of Private Ownership

1. Property Rights and the African Concept of Private Ownership By: Dr. Yaw Adarkwah Antwi, BSc PgDip (Cantab) MA PhD MRICS Consultant on Property Markets, Property Investments, and Land Policy. Tel: 0243509041 Email: a.antwi@wlv.ac.uk

2. References (1) • Antwi, A. (1996) Land Markets, Tenural Structures and Economic Development: Some Ignored Aspects of Urban Land Policy Implementation in Developing Countries. A Ghanaian Example. Our Common Estates Series; London; Royal Institution of Chartered Surveyors. • Antwi, A. (1998) The Property Rights Question: The Economics of Urban Land Management in Sub-Saharan Africa. Our Common Estates Series; London; Royal Institution of Chartered Surveyors. • Antwi, A. and Adams, J. (2003) “Rent-seeking Behaviour and its Economic Costs in Urban Land Transactions in Accra, Ghana”, Urban Studies, 40(10) 2083-2098 • Berry, S. (1992) “Hegemony on A Shoestring: Indirect Rule And Access To Agricultural Land”, Africa62, 327-355. • Coase, R. H. (1960) “The Problem of Social Cost”, Law & Economics. III: 1-44 • Ensminger, J. (1997) Changing Property Rights: Reconciling Formal and Informal Rights to Land in Africa. In Drobak, J. N. and Nye, J. V. C. (1997) (eds.) The Frontiers of the New Institutional Economics. London; Academic Press. • Feder, G. and Noronha, R. (1987) Land Rights Systems and Agricultural Development in Sub-Saharan Africa, Research Observer2(2), pp. 143-169 • Firmin-Sellers, K. (1996) The Transformation of Property Rights in the Gold Coast. New York; Cambridge University Press.

3. References (2) • Leakey, L. (1977) The Southern Kikuyu Before 1904. London: Academic Press • Ollennu, N. A. (1962) Principles of customary land law in Ghana, London, Sweet & Maxwell • Payne, G (1997) Urban Land Tenure and Property Rights in Developing Countries: A Review. London; IT publications/ODA • Platteau, J-P. (1992) Land Reform and Structural Adjustment in sub-Saharan Africa: Controversies and Guidelines. Economic and Social Development Paper 107. Rome; FAO. • Raynaut, C. (1976) “Transformation du Systeme de Production et Inegalite Economique: Le Cas d’un Village Haoussa (Niger). Revue Canadienne Desetudes Africaines, 19 (2) pp. 279-306. • Smith, A. (1776) An Inquiry into the Nature and Causes of the Wealth of Nations; Oxford, Oxford University Press. • Soto de, H., (2000) The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Reading; Cox & Wyman.

4. Learning Outcomes • Engage in the debate of the African concept of property rights • Exposed to a dichotomy between the informal and governmental sectors’ conception of private property rights • Understand why African governments prefer to pretend that land ownership is communal in nature in Africa.

5. The Debate on Private Property Rights in Sub-Saharan Africa • At the practical informal sector the concept of private property dominates in relations concerning assets and transactions where cost/benefit parameters ensure that private property rights are the efficient property rights system. • However, at the governmental level, observable private rights are presented as communal rights. • This presents a peculiar situation in the Sub-region where market participants conceive to have perpetual private rights whereas officialdom treats those rights as only use rights subject to perpetual and superior communal bundle of rights

6. Property Rights – Key Facts • Property rights are defined and made up of all the acceptable rules and conventions in a society which conditions the manner, mode and nature of “doing things” • Property rights are generally grouped into private rights and public or common. • Private property rights are better geared towards achieving efficient allocation of resources precisely because they assign the cost/benefit outcomes of resource employment more forcefully to the decision taker. • Attempts to introduce contradictory rights via government fiat impose transaction costs and retard economic growth

7. How Are Property Rights Created? • The evolutionary path to property • Better attuned to local situations and circumstances. • Could however be Slow and Frustrating • Through legislation and creation by fiat. • Potential for interest group capture to further rent-seeking

8. Rights by Government Fiat at their Best • deepen evolved rights by standardising them • reduce them to writing -- land documentation and registration; • constrain tensions that arise from the enjoyment of competing rights -- planning or zoning regulations; • provide avenues for certain, objective and prompt adjudication of conflict between right claimers and enforce contracts; • supply ‘missing-gap’ rights to expand markets and hence economic growth.

9. Rights by Government Fiat at their Worst • create rights for special interest groups – the well connected in the society; • unnecessarily constrain the enjoyment of locally attuned evolved rights: • Employed to stifle opposition to government

10. Received Wisdom (Misconceptions) • The notion that private or individual interest in land is a concept alien to the African. • The notion that the African idea of ownership of interests in land is something that transcends the physical realm into the spiritual, for land belongs to a vast family of whom many are dead, few are living and countless lots are still unborn. • The notion that land had no value in the economic sense to households or individual members of a community.

11. Fiat Rights of Which Less is Need • Direct attenuation of property rights. • Compulsory acquisition of lands • Prohibition of freehold transactions • The right to collect and distribute rents arising out of leaseholds created by stools (in Ghana) • The right to consent and concur in stool land transactions (in Ghana) • The right to issue C of O (in Nigeria)

12. Evidence Long History of Private Property in Africa: • There is no doubt that, even before the arrival of the European, private appropriation and sales of land parcels could occur in areas where population was heavily concentrated, and where land was scarce and subject to intensive farming practices. However, during the expansion period, when large areas of cultivable lands became available again, less clear-cut and more unstable land relations re-emerged.” (Raynaut, 1976 quoted in Platteau, 1992; p. 129).

13. Why Officialdom Prefers Communal Ownership in Africa • Politicians and Bureaucrats • To expand their agencies • To promote their importance by making rights administration complex • To enable rent seeking –extracting of rents from land rights dealings (corruption) • To control people’s lives • Traditional Authorities – to be able to receive proceeds from transactions of land rights which otherwise would accrue to families or individual subjects if recognized as private rights.

14. Economic Consequences • Diversion of real resources into rent-seeking waste • See Antwi and Adams (2002) for a detailed discussion and computation of sums diverted to Stools and Bureaucrats of the Land Agencies in a sampled area in Accra. • An obfuscated land rights acquisition and documentation process. • Market participants opt out and hold landed property without Formal Documents • Formal documentation to support investment property markets and mortgage market to support residential property sector suffers.

15. Summary • Private property rights prevail in Africa and govern the thriving parts of the economy . • African bureaucrats, politicians and traditional authorities, for obvious reasons, perpetuate the misconceived view of the absence of private rights. • One approach to kick-starting African economic development is therefore to sought out how to use the existing governmental system to create the environment that deepens de facto private property rights in the informal sector and transforms it into a formal sector