Paper short abstract:

This paper examines how Ethiopia's urban expansion and the construction boom that accompanies it have been enabled by the disjuncture between urban and rural land tenure regimes. The paper shows that the disjuncture between rural and urban tenure is a major source of speculation.

Paper long abstract:

Ethiopia's Oromo protests have thrust urban expansion and associated economic transformation and rural dispossession to the centre of political debates. This paper examines how urban expansion and the construction boom that accompanies it have been enabled by the disjuncture between urban and rural land tenure regimes. The government has frequently justified state land ownership in terms of state centralisation of rents and the need to limit speculation and rent seeking. However, this paper shows that the disjuncture between rural and urban tenure is actually a major source of speculation. While land under rural tenure has no formal value since it cannot be bought and sold, in booming urban centres where the urban leasehold system approximates a private land market, land values have skyrocketed. In the context of rapid urban expansion, the re-classification of land from rural to urban, involves the creation of massive rents. Through two illustrative case studies this paper shows that state attempts to capture these rents through state ownership and minimal compensation for displaced landholders leads to an 'economy of anticipation'—effectively a rush to sell land in urban peripheries as quickly as possible to avoid impoverishment that results from dispossession through formal procedures. The result is de facto land privatisation fuelling a construction boom in urban peripheries. The paper is based on fieldwork conducted in September—November 2018 comprising more than 40 interviews and focus group discussions with federal, regional and local government officials and affected communities in Adama, Oromiya and Bure, Amhara.