Can land spur transformation?

By Christina Malmberg Calvo

Promote more efficient land use to support a shift towards higher value economic activities

By 2040, Uganda expects to have realised its vision of a transformed economy. Commercialisation of agriculture and urbanisation are key processes to raised productivity and transformation.  Both processes require an efficient and effective land administration, especially so as the pressure on the land increases.  In Uganda, there is currently an increasing level of land disputes and conflicts.  There is also an increasing number of landless poor.  Uncertain land tenure and inefficient land markets impact on poor people’s welfare as well as on the better off and also on private and public investment.

Projections suggest that by 2040, Uganda’s population will have doubled from 35 million to more than 70 million, and its population density will have increased to about 388 people per square kilometer of arable land.  Is that a problem?  Not necessarily, many prospering countries show that land can be managed to catalyse rapid and sustainable growth even in the context of high population densities.

Uganda enjoys a diverse system of land tenure, which has evolved significantly since colonial times. It remains difficult, however, to transform land use to spur higher levels of productivity. One cause is the difficulty involved in transferring ownership of land from one entity to another, particularly under communally owned land in the north and north-eastern regions, and under the mailo land which has overlapping rights in the central region.  Another cause is the weak capacity of the institutions that manage land transactions. Indeed, only about 20 percent of the total land in Uganda is marketable and there is a high rate of dispute and conflict occurrence.  By 2006, while approximately 60 percent of households owned land, only 39 percent of individually-owned rural land had been purchased.  Because of the lack of clearly defined land rights, 37 percent of individually owned land cannot be sold; 34 percent cannot be rented; and 44 percent of land cannot be used as security for a loan. Moreover, some market transactions are considered unfair or exploitative, and often highly speculative, especially transactions in urban areas and in areas with significant public infrastructure developments.

On September 14, 2015, the World Bank released the sixth edition of the Uganda Economic Update. These updates take stock of the economy and feature a special topic. The sixth update, titled “Searching for the Grail – Can Uganda’s Land Support its Prosperity Drive?” examines how Uganda can ensure that its land serves as a more productive asset facilitating a positive structural transformation and contributing to economic diversification. Many sensible policies are already in place in Uganda, and the report emphasises key actions to accelerate implementation.  It also highlighting policy gaps that need to be closed.

Government can promote more efficient land use to support the healthy transformation of the agricultural sector and a shift towards higher value economic activities located in urban areas by taking the following four actions:

Accelerating the process of registration of land, including that owned communally, by religious and cultural institutions, and by government. Low cost technologies can raise the proportion of land registered well beyond the current level.

Redesigning the land fund that is supposed to support the resolution of overlapping land rights. This Fund needs to be operated more efficiently and equitably.

Strengthening institutions for land administration management, such as for dispute resolution; for valuation of land; and for urban authorities finances to allow them acquire land and pay for infrastructure development.

Reviewing and prioritising the many policy commitments to identify and close critical gaps such as in restrictions on rental markets, disincentives such as taxation for speculative holding of land, urban land use, and expropriation and compensation to promote equity and fairness in land transactions.

Making Uganda’s land a more productive asset is not a small challenge.  The government has begun the process to systematically register land and improve land information management. By accelerating these activities and the overall reform program, the country would raise the share of land that has secure rights, and ease the process by which land can be transferred from one entity to another and from one type of activity to another.  These actions would improve productivity and contribute to long-term economic growth.  It is in this way that land can spur Uganda’s economic transformation.

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Christina Malmberg Calvo is the Country Manager of The World Bank for Uganda