We disrespect property rights at our own peril

Last week, I wrote about the potential for land and the housing industry to serve as a wealth creator for millions of Kenyans. Events this past week at a school on Langata Road in Nairobi served to make the point even clearer: a country without clear property right laws and enforcement institutions is a country destined for chaos and poverty. Throughout the week, and with good reason, our attention has been focused on the plight of the children who lost their playground to a “private developer.” But today I want to focus on the other side of the coin: the so-called private developer.

Let us imagine for a second the losses in time, money, and productivity that the developer must have incurred throughout the whole ordeal. Obviously, the loss of the fence and other materials at the site may not be substantial relative to the developer’s total holdings. But a loss is a loss. At the very least we know that the land mattered enough for the investor to risk the wrath of the public and the pupils of the school. The investor only appears to have decided to back down when things got out of hand and the riot police, in an act of barbarity, tear-gassed innocent children.

The point of this exercise is not to sympathise with land grabbers. It is to highlight the plight of private investors all over the country. As long as we have a system of property rights like ours – in which official ownership documents are vague, and politicians can give and take away ownership rights at will – we are doomed to poverty and underdevelopment. The Wenyenchi who have since independence specialised in operating in this unpredictable environment may be thriving, but the common investor is suffering. The average investor typically has to save for years or obtain expensive loans to buy land and put up a structure. They also do not have unlimited access to taxpayer Shillings to finance their engagement in an inherently unpredictable property rights regime.

A loss of the kind witnessed this week, or in the last several years in which entire houses were demolished, is therefore a most crushing experience indeed. It means losing everything. This is why as we dig to the bottom of finding out who the real face is behind the Langata land grab we should also press CS Charity Ngilu, and Parliament, to take bold action and clean up the mess that is land ownership in Kenya.

Of course the process of full formalisation of land ownership is a particularly thorny political issue. There are those who have fake titles or embarrassingly large acreages that do not want to answer questions about how they came to own so much. Such interests will continue to block any attempt at having a properly managed land registry that is easily and promptly verifiable.

Now the way to deal with this political challenge is not to pretend that it does not exist. Instead, our leaders should be bold enough to acknowledge that cleaning up Ardhi House does not simply require digitisation of documents and sophisticated hardware and software for database management. Because the root cause of the problem is political, we should deal with the political problems head on. Since nearly all leading public figures have been implicated in one shape or another in illegal land acquisition, it should not be impossible for them to arrive at a compromise on how to rationalise property rights as they relate to land without causing much disruption to the economy and political stability.

 

Does this sound outrageous? Perhaps. But it is better than perennially kicking the can down the road. The population of Kenya continues to grow at a very fast rate. The economy is not generating enough jobs to relieve our people from direct dependence on rain-fed agriculture. So pressure on land will only go up. This means that at some point something will have to give. We have the option of coming up with a comprehensive land reform/urbanisation policy that will be favorable to both improved agricultural productivity and job creation in urban areas; or we could sit on our hands and wait for an explosive resolution of the land question.

The current land tenure system in Kenya is unsustainable. Communal land ownership disempowers the weak in our communities, especially women and the uneducated. And for those with private deeds one is never sure about their authenticity. The same applies to public lands. The resulting situation makes for a costly and unpredictable property rights environment. It is this messy environment that creates incentives for unscrupulous individuals to grab both public and private land with impunity.