204 CHAPTER SIX 6. SOCIO-ECONOMIC CHANGES: A STUDY OF LAND EXPROPRIATION, LIVELIHOOD TRANSFORMATIONS AND IMPACTS IN THREE SETTLEMENTS OF FRINGE OF FINFINE CITY 6.1. THE LEGAL FRAMEWORK: LAND TENURE POLICY OF ETHIOPIA AND ISSUES OF EXPROPRIATION AND COMPENSATION 6.1.1. The Concept of Land Tenure Land tenure refers to the complex relationship between categories of individuals, groups and the government with respect to land and related resources. According to FAO (2002), the relationship could be defined legally or customarily and land tenure is an important part of social, political and economic structures. It is multi-dimensional, bringing into play social, technical, economic, institutional, legal and political aspects that are often ignored but must be taken into account. Land tenure relationships may be well-defined and enforceable in a formal court of law or through customary structures in a community. Land tenure is often categorized as private, communal, open access and state. Land right; on the other hand, refers to rights held to land and other natural resources. More than one person may hold rights to a parcel of land which gives rise to the concept of a “bundle of rights”. An important concept related to land tenure issue is the concept of security of tenure. Security of tenure is the certainty that a person’s rights to land will be recognized by others and protected in cases of specific challenges. People with insecure tenure face the risk that their rights to land is threatened by competing claims, and even loss as a result of eviction. Without
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204
CHAPTER SIX
6. SOCIO-ECONOMIC CHANGES: A STUDY OF LAND
EXPROPRIATION, LIVELIHOOD TRANSFORMATIONS AND
IMPACTS IN THREE SETTLEMENTS OF FRINGE OF FINFINE CITY
6.1. THE LEGAL FRAMEWORK: LAND TENURE POLICY OF ETHIOPIA AND ISSUES
OF EXPROPRIATION AND COMPENSATION
6.1.1. The Concept of Land Tenure
Land tenure refers to the complex relationship between categories of individuals, groups
and the government with respect to land and related resources. According to FAO (2002), the
relationship could be defined legally or customarily and land tenure is an important part of social,
political and economic structures. It is multi-dimensional, bringing into play social, technical,
economic, institutional, legal and political aspects that are often ignored but must be taken into
account. Land tenure relationships may be well-defined and enforceable in a formal court of law
or through customary structures in a community. Land tenure is often categorized as private,
communal, open access and state. Land right; on the other hand, refers to rights held to land and
other natural resources. More than one person may hold rights to a parcel of land which gives
rise to the concept of a “bundle of rights”.
An important concept related to land tenure issue is the concept of security of tenure.
Security of tenure is the certainty that a person’s rights to land will be recognized by others and
protected in cases of specific challenges. People with insecure tenure face the risk that their
rights to land is threatened by competing claims, and even loss as a result of eviction. Without
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security of tenure, households are significantly impaired in their ability to secure sufficient food
and to enjoy sustainable rural livelihoods.
Tenure security as defined by Girma (2011) refers to the situation in which farmers
practically enjoy full rights of use and appropriation of the returns from the land through being
protected from different impositions and interferences from others. It is a state of affairs in which
farmers are guaranteed to exercise their holding rights freely without any hindrance from any
quarter and thus tenure security requires guaranteeing use rights, which include permanent,
exclusive enjoyment as well as free transferability.
The concept of holding right is also very important part of the land issue in Ethiopia.
Holding right refers to the right any peasant shall have to use rural land for agricultural purpose
as well as to lease land, while the right remains in effect, bequeath it to his family members and
includes the right to acquire property thereon; by his labour or capital and to sell, exchange and
bequeath same [Proclamation No. 89/1997, 2(3)]. With the above brief overview of what tenure
and tenure security means, the following section presents the nature and experience of land
tenure policy of Ethiopia.
6.1.2. Assessment of Land Tenure Policy of Ethiopia
The multi-faceted and complex concepts in the above paragraphs can be analysed in terms
of sets of rights, responsibilities and restrictions held by categories of people or bodies with
regard to access, control, management and transfer of specific land rights (Noronha, 1985).
In light with the definition and concept, an attempt is made to briefly survey the complex
land policy of Ethiopia before the 1974 revolution, during the Derg regime and the period of
EPRDF since 1991 to to-date. In connection with the federal land tenure policy, Oromia
Regional State’s context is also assessed in order to link it to the policy of land expropriation and
its impact on the tenure security.
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There is diverse literature in Ethiopia regarding land tenure policy and its challenges and
implications. Girma (2011), for example, studied the law and practice of land expropriation in
Ethiopia and in Oromia region in particular and he assessed the land tenure policy of Ethiopia on
his way. He explained that land is the basic socio-economic asset in Ethiopia and his assessment
covered the past land tenure in the country and the present policy and its trajectories.
This survey is aimed to connect land tenure policy, the land expropriation laws and
proclamations in Ethiopia and the specific practices in the study area in particular so as to
understand the impact of the implantation of laws and proclamations on the livelihood of the
community in the fringe of Finfine (Addis Ababa).
Ethiopia experienced a very complex history of land tenure system in which land was once
under the landlords before the Derg regime and later it was transformed to a mixed one and
presently the government fully retains all the land. In all those periods the peasantry was hugely
suffering and to the extent through the government’s action of eviction, dozens of people were
left landless and affected by food insecurity.
Since the beginning of the 20th
century, the pattern of land tenure policy and property rights
farmers have are dependent mainly on policy exercised by three different political regimes.
Within each of these political regimes there were and are a number of reforms and amendments
which have affected the farmers’ access to land and ownership or holding rights.
The Pre-1974 Land Tenure System
Until 1974, Ethiopia’s land tenure system was mixed and complex where the nature of the
tenure arrangement comprise private, state, church land and other forms. The preceding two
successive regimes of Emperor Menelik II and Haileselassie made extensive land grants to
members of the royal family and the nobility and, members of the armed forces and other
officials closer to the state. In such system only very few individuals owned almost all land
available in the country. Eviction of farmers, especially in the southern region, was also one of
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the typical characteristics of the period. The eviction of those days is similar to the contemporary
land grab for investment in different parts of the country.
The land tenure system from 1974 to 1991, the Socialist Derg Regime
The socialist Derg regime overthrew the imperial regime of Haileselassie in 1974, the
regime which had affected the vast majority of Ethiopian peasantry for long period of time. The
Derg immediately introduced a land reform by 1975 by which the older tenure system was
destroyed, creating changed land ownership pattern. Landlords of the imperial regime lost their
land rights and land was distributed to individual Ethiopians. By the Proclamation No.31/1975,
all rural lands were nationalized and private ownership of rural land was totally abolished, public
ownership of land came in to being. In fact, there were a number of problems in the actual
practices in the land tenure system during this regime, but for the time being this shall not be
accommodated in this thesis.
Post- 1991 Land Tenure System
In 1991, the Ethiopian People’s Revolutionary Democratic Front (EPRDF) assumed power.
The new government announced continuation of the land policy of the Derg - ‘state ownership of
land’ through Article 40 of the 1995 Constitution which states that the right to ownership of rural
and urban and as well as of all natural resources is exclusively vested in the state and in the
people of Ethiopia. The Constitution guarantees the right of the peasants and pastoralists of free
access to land and the right of individuals to claim compensation including the right to bequeath,
transfer or remove such improvements when the right to use the land expires (Article 40:7 and
8)“The farmers have the right to use the land indefinitely, lease it out temporarily to other
farmers and transfer it to their children but cannot sell it permanently or mortgage it”.
The Constitution also provides the right that every Ethiopian shall have full right to the
immovable property he/she builds and to the permanent improvements he/she brings about on the
land by his/her labour or capital. This right shall include the right to alienate, to bequeath and
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where the right of use expires, to remove this property transfer his title or claim compensation for
it (Article 40:7). It is clearly indicated in the Constitution that the users’ rights exclude the right
to sell or mortgage the land so as to protect the rural peasants from selling off their land to
wealthy individuals leaving them landless and without source of livelihood.
6.1.3. Expropriation and Compensation Laws in Ethiopia and Oromia Region:
An Overview
Ethiopia has laws contained in its Constitution regarding land. The Constitution states that
the Federal government shall enact laws for the utilization and conservation of land and other
natural resources. The first Federal Land Administration and Use law was enacted in July 1997
which is referred to as “Rural Land Administration and Use Proclamation No. 89/1997”.
The main laws addressing land related issues are for example, the Constitution (regarding
ownership and control), the leasing proclamation (regarding land delivery) and the expropriation
proclamation (regarding re-acquisition of land). Article 51(5) of the Constitution of the Federal
Democratic Republic of Ethiopia empowers the Federal Government to enact laws regarding the
utilisation of land. All such enactments are benchmarked on the fundamental premise of total and
complete state ownership and control of land. Article 40(8) of the Constitution, provides for
private property, expropriation for public purposes and for the payment in advance of
compensation (Djik, 2013).
In similar manner the government issued expropriation of land holdings for public purposes
and payment of compensation as stated in Proclamation No 455/2005 for the land to be
expropriated whenever needed for development purpose to be undertaken by the government
subject to payment in advance of compensation.
The constitution of the FDRE 1995, Article 40 states “land is a common property of the
Nations and Nationalities and peoples of Ethiopia and shall not be subject to sale or other means
of exchange”. However, such public ownership of land has undergone a series of reforms since
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the start of the current government when it started to move towards a market economy, resulting
in separation of land use rights from land ownership where land is still publicly owned while use
rights to such land are allocated to private individuals (Belachew, 2012).
The 1995 Constitution of Ethiopia entrenched state ownership of land, rendering its
reversal more difficult and impracticable. Article 40 Sub article (3) states that land “is
exclusively vested in the State and in the peoples of Ethiopia”. It goes further that “Land is a
common property of the Nations, Nationalities and Peoples of Ethiopia and shall not be subject
to sale or to other means of exchange”. This is as extreme as land nationalisation can go. A
remarkable feature of the present constitution is the upholding of the philosophy of private
ownership of property. Sub article 1 of Article 40 states: “Every Ethiopian citizen has the right to
the ownership of private property”. Unfortunately, the right to holding land was, categorically,
excluded from the constitutional definition of private property and in many regards this exclusion
is sufficient to conclude that private land rights are not tenable in Ethiopia. Theoretically, this
view can and should be disproved by the simple fact that there is much misunderstanding and
misapplication of concepts in land, land ownership and estate (private property) in the country
(Djik, 2013).
6.1.3.1. Foundation and Concept of Expropriation
In discussing about the system governments use to take land from the people for the sake of
public purpose, different terminologies and approaches have been used. Such systems are in fact
global in coverage but different in the name used practically to country or regional specific. Land
expropriation, compulsory acquisition of land, compulsory purchase, eminent domain, public
domain and others are some of the terminologies that characterize the system of taking land or
other properties from the owner (from the person who has legal right to that property). Here, to
make things clear, issues related to land than other properties is the main interest of this paper.
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Expropriation is a very old concept used in law in Ethiopia. It is believed that the concept
of expropriation was introduced in Ethiopia, at least in law, during the Menelik II period. Land
remains to be a subject of critical social, economic, legal and political question in Ethiopia. That
is why the concept of expropriation has again come to be one of the hot topics in land studies in
Ethiopia since recent years. Land expropriation involves taking or depriving a property of owner
or his/her legal rights to a piece of land or some other properties. Expropriation occurs when a
government confiscates a person’s land for use by the general public though the phrase ‘general
public’ is still vague and difficult phrase and deliberately been used by governments.
Compulsory land acquisition which is commonly used in most of African countries and
others involves the power of government to acquire private rights in land without the willing
consent of its owner or occupant to benefit society. Eminent domain, dominantly used in the
USA, refers to the government’s right to acquire private property for public use. The
governmental entity may be a federal, state, county or city government. As can be seen from their
definition, the three terminologies do not have much basic disparity.
When briefly defined, expropriation refers to a means of land acquisition for public
purpose. But this definition is not adequate enough to describe the issue of how land is taken
from the users and appropriated for public use. Many people also define it from their own point
of view and the concept lacks a universally accepted single definition. However, John Lewis and
Black’s law dictionary have tried to define from their own context. For instance according to
John Lewis, expropriation refers to “the right or power of a sovereign state to appropriate
private property for particular use for the purpose of promoting the general welfare”.
Some researchers also use ‘expropriation’ to refer to eminent domain or compulsory land
acquisition where in all the cases the state has the right to take private property (land) for public
purpose.
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The concept of Expropriation in Ethiopian context
Daniel (2009) and Girma (2011) quoting the Ethiopian Civil Code Art.1460, assert that
conceptually the issue of expropriation was introduced in Ethiopia in 1908 (during Menelik II
period) land related legislation which provides expropriation proceedings are proceedings
whereby the competent authorities compel an owner to surrender the ownership of an immovable
required by such authorities for public purpose. The researchers indicate that the meaning of the
definition given here shows the idea of the taking of private land by the state or authorities
without the consent of the owner for public purpose.
In this sense, expropriation can be defined as;
“ the right of the nation or states or of whom the power has been lawfully delegated to
condemn private property for public use ,and to appropriate the ownership and possession of
such property without the owner’s consent on paying a due compensation to be ascertained
according to law (Daniel 2009 citing Francis, Amndola, Williams, John, and Kennel).
6.1.3.2. The Concept of ‘Public Purpose (Public Interest)’
In the definition of expropriation, the phrase ‘public purpose’ is put indicating that
expropriation is justified by the public right to land. But does it really represent the expropriation
currently widely been exercised in Ethiopia? It only seems that “public purpose” stands for the
justification offered for taking private land against the wish of the owner of the property. But, the
ultimate user of that property (e.g. land) is not the public but individuals, corporate or others who
access the land through lease window and do whatever they like. The practice in Ethiopia,
especially in Oromia shows some capitalists purchase the land on lease basis and the revenue is
rarely put to public purpose. So, the concept of ‘public purpose’, the purpose for which land is
expropriated, is a pretext government at all levels is using the so called ‘land is of the state’.
On the other hand, the Constitution of Ethiopia, Article 40 (8) contains the issue of ‘public
purpose’ and describes;
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Without prejudice to the right to private property, the government may expropriate private
property for public purposes subject to payment in advance of compensation commensurate to the
value of the property.
However, no detail and specification is given as what constitutes a public purpose, which
adds ambiguity to its concept.
The same issue was underlined in the Oromia Rural Land Administration and Use
Proclamation No. 70/2003 which amended Proclamation No.56/2002. The proclamation
authorizes the government to take away the holdings of peasants or pastoralists and grant
leasehold for investors if the land in question is found to be important for public purpose.
6.1.4. The Law in Oromia Regional State
Give the definition and purposes of expropriation explained above, the Constitution of
FDRE in it Proclamation No.455/2005 (expropriation of land holdings for public purposes and
payment of compensation) provides the state the power to expropriate landholding under Art.
3(1) which reads;
A woreda or urban administration shall upon payment in advance of compensation in
accordance with this proclamation have the power to expropriate rural or urban land
holding for public purposes where it believes that it should be used for a better
development projects to be carried out by public entities, private investors, cooperative
societies or other organs, or where such expropriation has been decided by the
appropriate higher regional or federal government organ for the same purpose.
Therefore, it is possible here to deduce that expropriation takes the form of forced sale
(without the consent of the holder of right where there is some form of compensation either in
cash or in kind (land-for land).
Despite the existing policies and legal measures, land related problems such as tenure
insecurity, restriction on transfer and lack of adequate land administration system still the major
bottleneck in the country as a whole and in the Oromia region in particular.
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6.1.5. Legal Valuation Systems and Compensations
6.1.5.1. Valuation Systems
In the above section an attempt is made to briefly assess the laws and proclamations the
government uses to expropriate property holding of individuals in Ethiopia when the government
needs it for public purposes or development. In this section it is also important to see the
valuation method and compensation payment approaches for at least the properties or holdings
for which the people are legible to get compensation payments.
Valuation is roughly defined as the process of valuing real property, the value of which
usually sought being the property’s “market value” (dictionary meaning). It should be noted that
market value and price are quite different things in that what the property is really worth is
market value and what it cost to buy it refer to price.
In Ethiopia the federal government enacted a proclamation entitled “A proclamation to
provide for the expropriation of land holding for public purposes and payment of compensation”
in its Constitution Article 40(8), the FDRE states;
Without prejudice to the rights to provide property, the government may expropriate private
property for public purposes subject to payment in advance of compensation commensurate to the
value of the property.
These are critical questions that need to be focused on. In many case the laws and policies
designed in Ethiopia including land laws and land policy are smart and attention-grabbing when
seen on paper but seriously lacks efficient and adequate implementation and practicality.
In the expropriation law it is mentioned that after the right of compensation is recognized
as a constitutional right, the method of fixing the amount of compensation, the time and the mode
of payment are the remaining assignments to be accomplished. Not only in Ethiopia but also in
many other countries of the world valuation of the property to be compensated is a difficult task
and subject to bias and misunderstanding, especially when there is no standard to depend on.
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However, experiences from other countries show that there are three valuation approaches or
methodologies used in order to arrive at the fair market value of the rural property taken by the
way of expropriation.
The comparable sales approach - this approach requires searching for similar properties
that have been sold in the market place within a reasonable time period preceding the taking date,
and then adjusting the sales price of those comparable properties to reflect differences between
the comparable and the subject property. This method is considered the preferred method of
ascertaining the fair market value of the land taken by expropriation.
Income capitalization approach - this approach gives value to the land in relation to the
income it produces. The capitalization of income approach is generally used to value income
producing property when it is completely taken. It usually consist of arriving at an independent
value of the underlying land taken, and adding to it the value of improvements, by converting
reasonable or actual income at a reasonable rate of return into the indication of the value. The
land and improvements may be capitalized together in a single process. The capitalization of
income is not used to project future profits or to compensate the owner for lost profits but rather,
to calculate the fair market value of the land at the time of taking.
Replacement cost approach - the replacement cost approach values the expropriated
property by determining the replacement or reproduction cost of improvements, less
depreciation, plus the market value of the land. This predominantly is good to value buildings
and utilities than the land itself. But this method is preferred for determining a utility’s fair
market value.
In discussing issues related to valuation of properties lost to expropriation, the practice is
haphazard for reasons related to the fact that there is no standard in Ethiopia to depend on, there
is no certified individual or institution for this purpose and the government possesses the land
means everything is determined by the government’s best will than the concept of fair valuation
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and fair compensation. But the law assumes that there is certified professional who is carrying
out valuation in a standardized manner (Proclamation No.455/2005, Art.9: 1).
Therefore, experiences in Ethiopia itself show that there is no standardized and scientific
valuation system for properties all in all in the country. It is with these limitations that so far
dozens of rural and urban households are expropriated in Ethiopia with meagre and unjust
compensation the condition of which is also true in areas considered for the current study.
6.1.5.2. Compensation Payments: The concept
Dictionary defines ‘compensation’ as the act of compensating or the state of being
compensated something such as money, given or received as payment of reparation, as for a
service or loss. Some define compensation from the point of view of employment and salary and
wage “…the process of providing adequate, equitable and fair remuneration of the employees”.
In the context of this research the definition of compensation may comply with the
following definition; compensation is defined as “full indemnity or remuneration for the loss or
damage sustained by the power of the property taken or injured for the public use”. This
definition is the most commonly used one but it is not comprehensive and some of the phrases in
the definition are vague and ambiguous. The very idea of compensation is that the expropriator
reimburses or replaces the expropriated for the property, interest taken. Some authors argue that
compensation is important to be paid as a means to keep the balance of social justice stating that
compensation protects the rights of the politically under-represented groups (Ndjovu, 2003).
If expropriation is inevitable anytime the government re-acquires land for public purpose,
as stated in the law or in the Constitution of FDRE, Art. 40(8), there shall be compensation that
has to be paid to the people who surrender their land holding back to the government. The
amount of compensation for property situated on the expropriated land shall be determined on
the basis of replacement cost of the property.
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Article 40(8) of the FDRE states that, “without prejudice to the right to provide property,
the government may expropriate private property for public purposes subject to payment in
advance of compensation commensurate to the value of the property”.
Another important law or proclamation that states the government’s right or power to
expropriate land holdings with compensation indicates the organ of the government who is
entitled to expropriate. Thus, the competent authorities of the government, district and urban
administration or higher regional or federal appropriate organs are given this responsibility.
A woreda or an urban administration shall, upon payment in advance of compensation in
accordance with this Proclamation, have the power to expropriate rural or urban
landholdings for public purpose where it believes that it should be used for a better
development project to be carried out by public entities, private investors, cooperative
societies or other organs, or where such expropriation has been decided by the
appropriate higher regional or federal government organ for the same purpose
(Proclamation No.455/2005 Article 3(1).
The law itself assures that compensation must be paid during expropriation. The major
challenge with payment of compensation, however, rests on for which properties compensation
should be paid and what amount has to be paid. These issues are usually a point of confrontation
between the land holders and the government and its organs.
Regarding the properties for which compensation should be paid, Article 7 and 8 of
proclamation No. 455/2005 and the implementing regulations reveals that the interests or rights
to be compensated includes the property situated on the land, permanent improvements to the
land and permanent or temporary loss of the land (details for the compensation payment of these
rights is indicated under Art.7 (2) of Proclamation No. 455/2005 and Regulation No. 135/2007)).
In Ethiopia ownership of rural and urban land is obviously vested in the hands of the state
and the Ethiopian people and, hence, it is not subject to sale, exchange or mortgage. However,
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rural farmers and pastoralists are guaranteed a plot of land free of charge while urban residents
can secure the same through lease arrangements. During expropriation and when it necessitates
the government to re-acquire the land for public purposes, the Constitution prohibits eviction of
holders of land and other properties without just cause and payment of compensation. Under
Article 40 (8), the Constitution provides for payments of “commensurate” amount of
compensation during expropriation of property.
The other important point regarding compensation payment is related to the amount of
compensation to be paid. Words and phrases like “fair compensation”, “commensurate”, “market
value” are included in the laws and proclamation and are always open to interpretation and create
ambiguity for effecting compensation payments. As indicated under the above proclamation and
article for compensation, the word ‘commensurate’ shows that compensation must be equal to
the loss sustained. But is it really possible to do that in Ethiopian context?
Different countries use phrases like “just compensation”, “fair compensation” and others to
refer to compensation that has to be paid for the property acquired by the government. The
phrase “just compensation” is used in the Fifth Amendment of the United States constitution. It
provides in its relevant parts that “private property shall not be taken for public use without just
compensation”. This provision does not prohibit the taking of private property; rather it
designated to secure compensation in the event of expropriation. Then what does “just
compensation” mean?
The fundamental principle that guides valuations under expropriation laws in all Western
countries and the developing countries is the payment of “fair market price” or market value. Just
compensation is the market value of the property taken, or so the courts have held; the owner
ordinarily receives nothing for inconveniences and sentiment. In America, compensation as a
principle paid in money while market value is generally taken as a test for the existence of just
compensation. Market value” is defined as;
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The most probable price, as of a specified date, in cash or in terms of equivalent to cash,
or in other precisely revealed terms, for which the specified property right shall sell after
reasonable exposure in a competitive market under all conditions requisite to a fair sale,
with buyer and seller each acting prudently, knowledgably, and for self-interest, and
assuming that neither is under undue duress (Appraisal Institute 2001).
In Ethiopia, however, the word “commensurate” which may be synonymous with
‘corresponding compensation’ is used without further explanation.
Fixing the amount of compensation is not an easy task in Ethiopia due to a number of
reasons. One of the problems is related to the fact there is no clear standard in all regions, or
cities and dependence of local circumstances of regions, woredas (districts) or towns/cities.
Subjectivity could be very high in such situations where mandate is given to local administration,
as was seen from the three study areas that the compensation rate for farmland for the same
period, same size of land differs significantly.
One lawyer and independent researcher writes regarding the laws and the practice of land
expropriation (confiscation) in Ethiopia as follows;
The regime change in 1991 and the subsequent ratification of the Constitution (1995) failed
to restore any tangible land ownership right. Articles of the new Constitution complicated
the problems of alienation and powerlessness experienced by the people for so long. In the
FDRE (the Federal Democratic Republic of Ethiopia) Constitution, the rights of citizens to
possess farming land are maintained (Art.40.4). Proclamation No. 89/1997 (Art. 2.3)
provides for the right to lease one’s holding. In line with the provisions of the decree, the
Oromia State issued a Directive (No. 3/1995), which states that any farmer may rent a
maximum of half of his holding to anyone at any rate for a maximum of three years (Art.
23.2). But contrary to all these pillars and precedents, Proclamation 455/2005 gives
authority to the Woreda and urban administration, not to defend and protect, but to
confiscate and expropriate land for any purpose the higher authorities believes are for
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“public purpose and/or investment. Farmers are expected to evacuate from their ancestral
land with a short notice of 30 days, as per Article 4(4) of the same proclamation in
discussion. Failure to comply with this short notice will entitle authorities to use police
force to forcefully evict farmers from their land. This very proclamation clearly marked the
end of land right of farmers and opened big door for land grabbers (Hunde, 2012).
Still another very important thing in the study of compensation is that only the land or
including the properties on the land that is being compensated? This question seems silly but it is
good to evaluate as per the law so that sometimes we are saying people are compensated/not
compensated for their land. The researcher thinks that this issue is one of the points of confusion
among many of us, we Ethiopians.
In Ethiopia in general and Oromia region in particular the right to compensation for
termination of use rights is controversial. The controversy arises partially from the provision of
the Constitution itself which states that “government may expropriate private property for public purposes
subject to payment in advance of compensation commensurate to the value of the property”. (FDRE Constitution,
1995 Art. 40(8).
As private ownership of land is clearly prohibited by the Constitution, it seems to exclude
land from the sphere of compensable interest (as Girma, 2011 has also commented on this issue).
Despite this the Constitution gave rural land holders the right against eviction both by federal and
Regional state Constitution Art. 40(4) and (5). Not only this but also the duration of land use
right is also included in the Proclamation No.455/2005 which reads “the rural land use right of
peasants, pastoralists and semi-pastoralists shall have no time limit”. So what is compensable?
Even if controversy prevails between what is written and what is being practiced in
Ethiopia, as it is common in others affairs than land issues, it requires the researcher to assess the
rights that should be compensated and the laws governing it.
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Article 40(8) of the 1995 Constitution and Proclamation No.456/2005, Articles 7&8 of
Proc.No.455/2005 and Oromia Rural Land Administration and Land use Proclamation No.
130/2007 presents that the following rights or interests shall be compensated (a property situated
on the land, permanent improvements to the land and termination of permanent or temporary loss
of use right over the land). What is the amount of compensation to be paid?
According to the federal Expropriation and Compensation Proclamation No.455/2005 and
the practice in the Oromia Regional State, the amount of compensation is fixed at ten (10) years
annual income, based on the average annual income of the previous five (5) years. This method
is neither scientific nor has any logical explanation as to why the previous income value is
considered for estimating the present value. Many writers on the same issue question this thing
and it is simply arbitrary and there is no law or legislature ordering this system. The concept of
current market price is not acceptable by the Ethiopian government and actually there is no
expropriation and compensation law for the regions and they fully adopted the federal system.
It seems that in Ethiopian government thinks in a way that land use for residential
development or other urban uses is much more profitable than the land use for agriculture. The
prices paid to farmers for urban land use or other non-farm purposes is over hundred times than
those paid for agricultural purpose. With such disparities in urban land use it continues to
invariably displace agriculture.
An anticipation of urban development on an area of land increases its values. If this
expectation is strong, urban developers or speculators may purchase the land from the farmer,
and be content to leave the land unused until it is developed, reaping capital appreciation rather
than steady income. Agricultural land use may, therefore, be discontinued, modified or
disintegrated ahead of actual urban encroachment.
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6.2. LAND EXPROPRIATION AND LIVELIHOOD CHANGES AND IMPACTS:
THE CASE OF GALAN, LAGATAFO-LAGADADHI AND BURAYYU
SETTLEMENTS IN THE FRINGE OF FINFINE
6.2.1. Introduction
Urban expansion and land acquisition for investment and development generally resulted in
the conversion of agricultural lands in the fringe areas to non-agricultural purposes. Such
developments and programs are often associated with positive and negative effects on the
farming community in the fringe areas.
In this connection, the interlocking relationship between expansion of Finfine city and the
spill over of population and activities to the surrounding SZOSF, land expropriation for
investment purpose by the Oromia Regional State has changed the landscape of the fringe areas
of the city where the three study sites of Galan, Lagatafo-LagaDadhi and Burayyu settlements are
belonging to. The following sections, therefore, presents the situations in the study sites and, of
course, land expropriation for investment and urban development and its impact on the livelihood
of the indigenous farming community.
6.2.2. Socio- economic Profile of the Study Area
The special Zone of Oromia Surrounding the city of Finfine is the most dynamic region
where both urbanization and industrialization are rapidly growing and in contention with small-
holder agriculture. The surrounding rural areas are gradually falling under these pressures where
recently the smaller towns emerging as one of the most important population and economic
agglomerations. In addition to the urban growth pressure which is related to residential and
commercial expansion to the special zone, the government’s land acquisition through
expropriation policy for investment motive is changing massive and significant rural agricultural
land to urban and industrial use. In order to facilitate this transformation and anticipating the spill
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overs from Finfine the Regional government of Oromia has made an administrative restructuring
whereby the settlements and rural agricultural land found surrounding the city of Finfine is
reorganized into special zone. This action actually contradicts the very objective of creating the
Special zone of Oromia as fringe areas of Finfine city (as indicated in chapter three above, the
special zone surrounding Finfine is created in order to check horizontal expansion of Finfine city
to the surrounding areas).In the objective of the creation of the SZOSF, it is clearly mentioned
that there is a threat of the horizontal expansion of the capital where always the settlements
belonging to the Oromia region in the fringe are annexed to the urban territory (for example in
the year 2001 about 23 peasant associations in the Oromia region bordering the city of Finfine
were incorporated into the city’s master plan and there was huge devastation that happened to the
livelihood of these community). Therefore, the Special zone is a zone established in 2007/8
containing six districts which surround Finfine in all directions. The city of Finfine and the newly
repositioned SZOSF are in competition over the land which for centuries has been used by the
rural agricultural Oromo community. The formation of the special zone temporarily kept the city
in the cage amidst the loss of space in the city for residential development and industrial
establishments.
However, contrary to its prime objective of protecting the land found surrounding the city
from informal settlements and squatting, the regional state of Oromia, under the federal
government guidance and supervision, is expropriating agricultural land from the farmers in the
districts of the special zone in the name of ‘investment and development’. This does prevent
neither the expansion of settlements nor commercial and industrial establishment in the special
zone. The three settlements taken for case study are much affected by such developments and a
number of farmers who were users or holders of agricultural land are dispossessed for the sake of
investment. In the SZOSF, in almost all directions agricultural land is in transition to non-
agricultural uses a situation which affected the livelihood of farming communities. Farming
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received a heavy blow in the process of urbanization and land expropriation for investment.
There is rapid growth of towns and villages due to population and industrial establishments.
Regarding the functions of the emerging small and intermediate towns in the vicinity of
Finfine, much of it is related to hosting the rural urban and urban to urban migrants and became
the most preferred location for manufacturing industries too.
Some of the towns in the Special zone were established long years back during the Italian
occupation as garrison towns. Akaki Basaka of the Finfine administration, Holota and Sandafa
are some examples of such towns which are currently growing fast providing
manufacturing/industrial, service and residential facilities for the migrants and local
communities. There are newly establishing towns like LagaTafo, and one of the existing small
villages, Galan which emerge to be among the most demanded areas for residential real estate
and manufacturing investments by the private sector. These areas on the other hand, are
agriculturally the most fertile and productive part of the region on which the population of
Finfine has depended since its establishment. The region supplies everything it produces for the
population and industries in the city.
A brief survey of the socio-economic profile and development trends of the three
settlements is presented below.
6.2.2.1. Galan Town
The name “Galaan” came from an Oromo name which belongs to one of the largest clans
in an Oromo descent called the Daaccii of Tuulamaa branch. Galan was the eldest Son of this
clan and the name for the locality is given from this fact. The descendants of the clan lives in the
Southern, southwest, and south eastern part of the city of Finfine and have historical relationships
with the early foundation of Finfine city (Galan town administration 2007). Galan as a settlement
actually emerged during and after the short stay of the Italians in Ethiopia who connected the
railway line from Galan to the city of Finfine (Addis Ababa). The post-Italian occupation
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industrial development in the Southern Finfine (Addis Ababa) has given rise to the locality called
Akaki Basaka and the closest village, Galan. Due to administrative restructuring made by the
Regional State of Oromia in 2007/08, Galan became one of the 8 newly re-classified towns of the
SZOSF. The town is located at 8050’45” north latitude and 38
049’45” east longitude, 25
kilometres southeast of Finfine along the Finfine-Adama Highway.
Its location along the Finfine - Bishoftu - Adama Development Corridor made it an
important area for industrial investment both by the domestic and international investors.
According to the OWWDSE (2011) a land use of high mixed development with more emphasis
on manufacturing and storage is planned for the town.
Demography:
The population of the town was very small in size before the 2007/8 and it was just a very
small town where only few residents and recreational places were found on the either sides of the
road. The number of industries established long years back was very small in number. Later six
(6) out of 29 peasant associations found surrounding the town were repositioned as part of
planning boundary of Galan town and became one of the targets for investment in different
sectors. Even with this new development in place the size of population of the town is still
smaller (see table 6.1) than the other towns in the SZOSF. As the majority of the land use is
proposed for industries than residential areas only limited number of households stay in the town.
Land use:
Location wise Galan is found close to the Akaki Basaka industrial area and has got
industrial development experiences even before the new structure plan is in place. Investments
before the establishment of Galan town are mainly located along Addis Ababa-Adama highway.
These investments have large blocks ranging from 1.7 hectares (Adal industrial Plc.) to 7.6
hectares (KOSPI). These large blocks of investments create problem of accessibility to land uses
at the back.
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The urban pattern of Galan shows the character of transit oriented urban development
including the residential areas which are located along the road and some of it being a bit away.
Before the restructuring of the area came in 2007, open spaces, agriculture and forest dominated
the area (covering 65.5 %) and followed by industrial and warehouses (15.5 %). The structure
plan prepared for the town shows that the dominant land uses in the future will be devoted to
manufacturing industries and warehouses.
The major recreational land use along highway is also established before Galan town is
established with new plan. They also have large block size that ranges from 0.5 hectares (Galan
recreational centre) to 5 hectares (Atlas Resort Centre). In between these extremes are the wood
lands with an area of 4 hectares and RAMSA 2 hectares are found. The majority of investments
before the establishment of Galan were import inputs. This includes Trackon Trading, KOSPI,
DH Gada Plc, Dot Pencil, NOVA Star garment Factory and Mesfin Industrial Engineering
(Habtamu, 2011). In the post 2007 repositioning, the area of the town has increased much as the
surrounding rural areas are included in planning boundary. The growth of the town is mainly
along the road to Finfine and the closest town of Dukam. Based on the previous investment trend
and anticipating the future development potential of the area, the OWWDSE (2011) in its
structure plan indicated that the dominant land use type in the town is devoted to manufacturing
industries.
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Figure 6.1: Proposed Land use Map of Galan Town
Source: Extracted from OWWDSE (2011)
6.2.2.2. LagaTafo – Laga Dadhi Settlement
This settlement or town is one of the target investment site selected both by the federal and
regional governments of Ethiopia. The town emerged from the earlier rural villages of Laga
Dadhi and a small settlement of LagaTafo, a town located closer to the capital only at 21
kilometres in the North eastern part from Finfine (Addis Ababa).
Before the 2007/8 administrative reclassification and creation of this settlement the area
was under the Barak- Alaltu district with Peasant Association status. Later the two settlements
became merged as there are only few kilometres of distance separating the two and settlement is
laterally expanding between the two centres following the regional outlet from Finfine to Dabra
Berhan.
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Demography:
Demographically, the neighbourhood of Lagatafo-LagaDadhi town has undergone huge
transformation. Its location very closer to the city and on the main rural-urban migrant route
made it a destination of commuting population and rural-urban migrants from the remote regions
of the northern part of the country. Lagatafo-LagaDadhi has two major administrative sub-
divisions, Kebele 01 which is the oldest settlement and investment area and Kebele 02 which
includes the settlements found at LagaDadhi.
The size of population of the twin towns was very small and it had the rural settlement
pattern before the new structure came into being (table 5.1). The population of LagaTafo has
long experience of displacement and dispossession of land for urban development and housing -
The ROPAC INTERNATIONAL real estate developments has displaced and dispossessed rural
agricultural households before the recent land expropriation came. At some few of distance to
southwest of Lagatafo settlement, there was a locality called ‘Yaka Tafo’, which is incorporated
under the city boundary of Finfine for the Ayat Real estate development during the 1999/2000.
Land use:
According to the land use assessment made by the Oromia Water Works Design and
Supervision Enterprise, an Enterprise the land use type before 2007/8 shows that Lagatafo has
the land use inclined to manufacturing industries compared to other land uses types. But later
residential land use development became fast growing and dominant one with the largest real
estate projects being located there. Lagatafo was one of the major agricultural areas in the
Special zone of Oromia. However, the proximity factor to the city of Finfine made it to be one of
the most important investment centres. Urban impact of Finfine city is also clearly visible and in
a very short period of time the neighbourhood became among the highly populated towns in the
special zone.
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LagaTafo continues to be one of the demanded areas to host the highest number and size of
real estate companies in the country like the CCD which occupied more than 20 hectares of land.
The land use Lagatafo-Laga Dadhi, unlike the case of Galan, is dominated by residential
development and mixed use than Industrial development. But there are some food processing
industries (example, NAS Foods) which were established before the recent land expropriation.
Figure 6.2: Proposed Land use Map of Lagatafo-LagaDadhi town
Source: Extracted from OWWDSE (2011)
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Figure 6.3: Proportion of the proposed land use for Lagatafo-LagaDadhi town
Source: Constructed from OWWDSE (2011) data
6.2.2.3. Burayyu Town
Burayyu is one of the fastest growing towns in the SZOSF and the Oromia region at large.
It is located within few kilometres (10 kilometres) from the centre of city, Finfine. Burayyu town
has expanded to the western and southern part while the older settlement of Burayyu is found
smoothly continuing from the boundary of Finfine city. Thus, it is bounded in the east and
southeast by the Finfine city, in the western direction by Managasha, in the northern by the rural
villages of Walmara district and the thick forests of Entoto ridge, and in the southern part by
Sabata-Hawas district of the Oromia Regional State. Its proximity to the city of Finfine help
many of the population to commute for work to the city centre and thus Burayu town’s
population settlement is largely crowded like that of the main city.
Currently Burayyu town has six kebeles which includes Burayyu Kattaa, Lakkuu Kulee,