This report has been prepared as part of the ‘Urban infrastructure in Sub-Saharan Africa – Harnessing land values’ project. It represents an overview of planning, property development and urban infrastructure finance in the City of Addis Ababa in Ethiopia, with some reference to two secondary cities in the country, Hawassa and Mekelle. It is intended as a case study to demonstrate the extent to which land-based financing is taking place and to understand the factors which influence successes and failures.
The land lease system in Ethiopia remains an important example of land-based financing. It benefits from having a fairly effective City, backed by the State, and from a tightly controlled property development process. However, it does have its shortcomings, as noted in the report. Furthermore, this type of land-based financing has limited application in other counties in Sub-Saharan Africa as it requires that the land is owned by the State and that State and City have a high degree of control over the way the land is allocated for lease. In addition, the land lease system has not been able to cope with the demand for property and provide significant enough finance for providing infrastructure for the poor. Fortunately Addis Ababa has access to other sources of finance, notably from the tax sharing system and borrowing which are enabling the rapid provision of infrastructure, albeit at a rate which is not rapid enough.
African Centre for Cities. Urban infrastructure in Sub-Saharan Africa &#8211; harnessing land values, housing and transport: Ethiopia Case Study. African Centre for Cities, Cape Town, South Africa (2015) 65 pp.