The fragility of compulsory land acquisition for development

BY NBM WRITER It is amazing, according to the latest Kenya Economic Update, a report prepared annually by the World Bank, National Treasury and Kenya Economic Roundtable, how many Kenyans have lived on and used land but never thought of any formal documentation of their rights. People who hold secondary and tertiary rights (women who often control but do not own parcels for food production; that lot who own trees, but not land) are usually the disadvantaged group. “These users of the land are considered legitimate rights’ holders due for compensation. In some countries, their legitimate customary rights are recognized under the formal law, yet in others, they are not. Procedures to be followed during eviction have been included in the Land Laws (Amendment) Act (2016), and state that certain measures must be looked into during evictions. But on the other hand, the Constitution, which mandates the passing of legislation to guide the procedures on forced evictions, allows (the same) forced evictions to take place under certain conditions. It is becoming a reality now that such laws are hampering Kenya’s growth especially in the implementation of public investment projects. Talk of the cost implications. At times the land, which is available has on it a massive development that will make people cringe when demolished. Now the new law hands power to the government as far as private land acquisition (in the public interest) is concerned. As always the case, nothing is based on the ‘willing buyer, willing seller’ sort of reasoning, as the landowner cannot object to the ‘compulsory acquisition.’ Kenya’s Standard Gauge Railway, super highways are a few projects that have seen light of the day despite the hurdle that the recently passed Land Laws (Amendment) Act 2016 (still) presents… the tough task of identifying and compensating legitimate rights’ holders is an issue that has been clouding infrastructure development. National Lands Commission (NLC) boss Muhammad Swazuri says some of the acquiring bodies, though, are still acting like “the old.” “When people are not compensated in time; when matters go to the judiciary… there are issues… some orders cannot be justified. Where there is a matter of necessity, the landowner ought to be just notified. Then compensation to take place as the project goes on,” says Swazuri. Valuation of leaseholds To those wondering whether they should lease or buy a property, the answer is more of a yes and no. Why? Land experts and market analysts say that you might gain or lose when it happens that government is interested in acquiring that land where your property rests depending on which side of the law you are staring at. At the moment legislation requires that compensation amounts be determined in relation to market value. Compensation costs under the Land Acquisition Act 1983 says that, at the least, compensation of the land, developments on the land and a 15% disturbance allowance is good enough. But looking at valuation of leaseholds, a lot of work needs to be done. Dr Swazuri cites Delta Plaza on Menengai road as good example. “The owner of the land would have a lease of 99 years from us (national land commission)… that owner is called A. The owner leases it to B, who develops the 16 storeys, and each one of those floors is leased to person A to Z. Under the lease, whom do you compensate? Lease holder, or tenant? It is a complex issue,” says the chair of NLC The most flexing question is the additional things; ‘severalists’ – which means land is becoming inefficient due to various people requiring compensation; add ordinary relocation costs especially for business, and then loss of business. This is what you should add to the 15% market value. Which means by the time you come up with the valuation figure based on the market value it is a pretty big figure. Thus people will accuse you of “having ‘eaten’ – the cliché used mostly here in Kenya. But that does not mean that all hope is lost. The ideology that has been associated with leasing is that it just has to be 99 years. But then again, private and public sector should work together, and corporates ought to understand the challenges of acquisition, especially compulsory acquisition.

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