The dream is reality because of Ms Qangiso’s grit—and because, unlike most people in the township, she can demonstrate ownership of her property. Aided by Bitprop, a startup, she proved her claim on the land, then used the title to raise money for the building works. Over the next decade she will split the rent with Bitprop, which also designs the flats, until its share is paid back. Thereafter the takings, as well as the increase in the asset value, are hers.
Ms Qangiso’s story encapsulates the latent power of property rights. Twenty years ago Hernando de Soto, a Peruvian economist, published “The Mystery of Capital”, in which he argued that, without formal title, the real estate on which billions of poor people live and work is “dead capital”. He estimated these assets to be worth $9.3trn ($13.5trn in today’s money).
Partly inspired by Mr de Soto, over the past two decades there has been a flurry of attempts to map and parcel land in the developing world. Between 2004 and 2009 the World Bank committed to 34 land-titling and registration projects worth more than $1bn, compared with three between 1990 and 1994.
Yet the potential of property rights remains largely unrealised, especially in Africa. Perhaps 90% of rural land in Africa is not formally documented. Just 4% of African countries have mapped and titled the private land in their capital cities. Well-meaning reformers have often neglected the myriad other factors affecting whether titles are useful or not, such as custom, other laws and the capacity of the state to enforce people’s legal property rights. They have also underestimated the ability of vested interests, such as traditional leaders and urban elites, to obstruct reform.
Covid-19 highlights the harm that insecure property rights cause. Evictions and land grabs are rising, as newly jobless tenants cannot pay rent and bigwigs figure they can get away with skulduggery while everyone’s attention is on the pandemic. The economic fallout of the coronavirus is so severe that some African countries face a lost decade. So they need growth-boosting reforms more than ever.
Source : The Economist via le Land Portal