The Expansion of Informal Settlements

In recent decades, the size and number of informal settlements have increased on the edge of many urban areas all over Ethiopia. Following this, a large number of informal houses have been demolished in several places across the country. The demolitions have caused considerable uproar and disappointments especially in the capital and the surrounding areas. What makes the case of the capital and its surroundings different is the scale of this phenomenon.

Although the places have become hotspots for confrontations with law enforcement officers, due to limited regularization, massive demolitions haven’t curbed the problem. In fact, the demolitions have resulted in the wasting of enormous resources, and families being pushed out on the streets to endure serious difficulties.

In developing countries such as Ethiopia, informal settlements are the predominant feature. There are notable informal settlements in South Africa, Kenya, Pakistan, and Bangladesh with defining characteristics of poverty, lack of basic services, and overcrowding.

Informal settlements are mainly the results of lack of legal access to land ownership, large infrastructural and social services deficits as well as the flourishing of unregulated dwellings on private and public land. Although these settlements begin haphazardly, over time they cover vast areas of lands. The expansion of these settlements depends on the responses of law enforcers. Serious shortage of affordable housing coupled with poor law enforcement and corruption foster explosion of informal settlements. In a similar pattern, the expansion of informal settlements in Addis Ababa and its surroundings are driven by economic, legal and political factors.

Over the past decade and a half, the capital has enjoyed a remarkable socio-economic performance. Data reveals that, on average, the gross domestic product (GDP) of the capital had grown by more than 15Pct over the past five years; much faster than the national GDP growth rate. Per capita GDP of Addis soared to USD1,359 from USD 788.48 between 2010 and 2015.

The State of Ethiopian Cities 2015 report estimates that Ethiopian cities generated GDP of about ETB 227.3 billion while Addis Ababa’s GDP was about ETB 66.3 billion, accounting for 29.2 Pct of the overall GDP of Ethiopian cities. Apart from considerable growth, the city also achieved a decline in the poverty index and better fares in terms of education and schooling among other public services in comparison to other urban centres.

The economic boom in the capital coupled with deteriorating economic conditions in rural areas, such as scarcity of farming land, shrinking land size to support households, population growth and lack of opportunities have resulted in massive rural-urban migration. Excessively politicised ethnicity made people so insecure in regional areas that it has become common for even the more well-off to move to the capital, where they feel safe.

Rural-urban migration and population growth of the capital increased the demand for housing. The capital, with its huge backlog of housing requirements, has faced with more demands that widened the gap.

The housing supply has remained very low as the land is owned by the government and the state is the major supplier of housing in the capital.

The various housing schemes have not been as effective as thought. They have showed a grotesque failure of the government. Taking the recent controversial condominium raffle into account, only five percent of house seekers who were registered for various housing schemes five years ago have been able to get houses.

The construction of condominiums has been characterized by severe delays, sub-standard work and soaring costs. Private real estate development is riddled with multi-faceted problems including the high price of leased lands. On the other hand, the target customers of real estate developers has been the wealthy who are a tiny section of the population. As attention was not given to allow the real estate sector to be involved in low cost housing projects, it has had no contribution to ease the housing crisis. Since the capacity of housing cooperatives depends on the supply of land by the government, their role has also diminished in recent years because securing land from the government has become difficult.

Bureaucracy, inflexibility, and unresponsiveness in land supply has caused soaring prices and deterred private sector low-cost housing development. Land, as with any commodity, is determined by supply and demand. However, the state, as a sole owner of land, has an enormous influence in determining land price. Sluggish supply and instalment lease payment terms coupled with high inflation, has driven the price of land up to the level that is not even observed in most developed cities around the world.

Instead of stabilizing price by increasing supply, the state has remained unresponsive. So, the majority has been priced out. Land related corruption proliferated as land become precious asset. Illegal trades on farming lands mushroomed as it is remained the only cheaper option for the poor to roofs one their heads. It is not only the genuine house seekers but also speculators who are engaged in this mushrooming trade.

Farmers in the capital and its surroundings are lured to engage in illegal trade on farming land as the compensation for eviction by the state is far smaller than what they would fetch in this trade. Corruption, incapacity and poor law enforcement at local administration levels have enabled this this phenomenon to flourish.

So, we can conclude that the expansion of informal settlements in the capital and its surroundings is a manifestation of the failures of policies pertaining to economy, land and housing.

Informal settlements in the Addis Ababa and its surroundings is an unavoidable phenomenon so long as the capital provides better economic opportunities without adequate housing provisions. The problem is also exacerbated by sole ownership of land by the state with inefficient land management system. The state’s failure to supply adequate housing and availing enough land to private developers and individuals for house building has pushed the price of land and houses to speculative level.

Tackling informal settlements requires review of our economic and land policies. Economic policies that foster equitable growth in urban centres across the country would reduce the migration to capital. Land tenure reform is essential for increasing supply of land for the construction of houses. Serious reform also requires changes to the constitution.

But there should be ways for allowing farmers to transfer their holdings for the construction of houses. This will reduce involuntary eviction of farmers from their land for real estate and condominium development projects because adequately compensate farmers increase the supply of land for private house developers, which in turn, bring the bloated land price down and enable more housing units to be built. When the land transfer process passes through legal channels, the government will be able to regulate the construction of houses and ensure that they are in line with urban plans. The government may also levy taxes on transfers so that the money would be used for availing infrastructure and social services in those areas.

8th Year • Apr.16 – May.15 2019 • No. 73