Land

Acquisition for
development
Habtamu S (PhD)
2023

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 Course content
 Introductory issues
 Conceptualizing expropriation
 Historical genesis
 Procedural steps in expropriation
 Determination of public purpose
 Valuation of assets
 Determination of compensable interests
 Resettlement and rehabilitation
 Group discussion issues in each topic
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Course Objectives:
• Explain the concepts and rationales for compulsory land
acquisition;
• State the procedures required during compulsory land
acquisition;
• Identify the general and specific principles under
compulsory land acquisition;
• Synthesis the advantages and disadvantages of
expropriation;
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• Identify involved actors and their roles during compulsory
land acquisition
• Identify and determine compensable interests in Ethiopia
during compulsory land takings;
• Determine the amount of compensation in line with
legislations when land is taken for public purpose.
• Understand resettlement and rehabilitation and to what
extent the laws give coverage

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Materials needed for the course
 The FDRE Constitution
 Compulsory Land Acquisition, payment of compensation
and resettlement Proclamation No.1161/2019; Reg. No.
472/2020
 The Federal Rural land Administration and use Proclamation
No. 456/2005
 Urban Land Lease-holding Proclamation No. 721/2011
 Proclamation No. 455/2005 (Repealed)
 Regulation No. 135/2007 (Repealed)
 Regional directives etc

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 Introduction
 In most developing countries, including Ethiopia, land
is the main economic, political, social and cultural
asset.
 It is the crucial source of generating livelihood income
for society.
 It remains an asset that farmers must accumulate
wealth and transfer the same to future generation.

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 Moreover, the issue of land has not simply remained to
be an economic affair but also it is very much
intertwined with the people's culture and identity.
 In a nutshell, land related issues in developing
countries are the most sensitive part of overall
development that government needs to consider.

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• Ethiopia is still predominantly a rural country, with
only 20% of its population living in urban areas (Around
24,941,349 urban residents).
But this is set to change dramatically.
• In 2020, the rate of urbanization in Ethiopia is 4.7%.
• That would mean a tripling of the urban population by
2034, with 30% of the country’s people in urban areas
by 2028.

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Cont’d
Why are cities Expanding?
 Explosive growth of cities globally signifies the
demographic transition from rural to urban, and is
associated with shifts from an agriculture-based
economy to mass industry, technology, and service.
 In principle, cities offer a more favourable setting for the
resolution of social and environmental problems than
rural areas.

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 Cities generate jobs and income, and deliver
education, health care and other services.
 Cities also present opportunities for social
mobilization and women's empowerment.

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 Cont’d
Major Reasons for Expropriation
 Population Growth (Natural population increment and
rural to urban migration)
 The needs for infrastructures
 The need for economic growth (income, job creation etc.)
 Expansion of Technologies

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Cont’d
Specific Reasons for Expropriation
 Develop Infrastructure (i.e., roads, railways, bridges,
tunnels, and public utilities)
 Develop Recreation Space (i.e., parks)
 Develop Public Building (i.e., municipal buildings or
schools)
 Build a Hospital or Public Health Center
 Relocate in the Interest of Public Health

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Cont’d
 Proc. No.1161/2019, under its first and second preamble
also states that;
The government needs to use land; for
development works it carries out for public services;
i.e. to address the steadily growing urban population
which requires more land for building houses,
infrastructure; and for redevelopment of the urban
slams to invigorate investment and other services; and for
development activities in rural areas.

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Cont’d
 Proc. No.1161/2019, Art.4 that address the required
principle when land is expropriated in Ethiopia:
• Where land is expropriated for public purpose, the
procedure shall be transparent, participatory, fair
and accountable.

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Cont’d

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The Role of the State
 In growing cities, specially in developing nations the role
of the government is diverse
 State is expected to provide (accelerate) housing,
infrastructure (water, electricity, sewerage, roads,
bridges etc.)
 State is also supposed to construct hospital/clinics,
schools and other social services
 For all these land is required.

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 Land Acquisition Techniques
 Land may be acquired by the State through different
methods based on the land policy of the country.
 It could be voluntary, incentive induced or compulsory
purchase (acquisition)
 Currently in Ethiopia the dominant means to acquire
land is compulsory purchase/acquisition (expropriation).

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Voluntary Bargain and Sale
 This is a system that enables the public authority to
negotiate the purchase of land from owners.
 It is an ideal method of land acquisition.
 In western countries where private property of land is
secured, this is the most utilized method.
 What is necessary is willing seller, willing buyer, and
operable land market.

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Voluntary….
 But the Problem is it is difficult in developing countries
to get operable markets.
 It could be tampered with corruption and favoritism
 Even in developed countries this method doesn’t collect all
the necessary land; one or few owners may refuse to sale
their land or require very high price (above market
price)
 In Thailand, government uses public bidding to purchase
land, but it takes years to reach agreement.

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Cont’d

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Cont’d

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Owners may create holdout problems

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 Public Acquisition of Leasehold Interest

 It is also called resumption

 The idea is that government may take back a land
that it had leased out to private developers.
 This is ideal when the lease period is shorter.
 Government usually pays compensation for trees and
buildings and unused lease values
 It is some how close to expropriation.
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 Acquisition through barter or exchange
 Government may provide land in exchange for the land it
wants.
E.g. The government may give land at the periphery by
taking land from the center.
 Excess land may be owned by a state body that can be used
for barter.
 But it is also necessary to know a head of time the value of the
tradable lands.
 Do you think this modality exists in Ethiopia?
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Public private venture
 The idea is land holders/owners can contribute land for the
public work, such as roads and streets.
 In some countries, the landowners may agree with the State
that they may contribute land and the state constructed
houses and services (roads, schools..).
 Public services (schools, roads) shall remain as public
property, some houses will be given for the landowners, and
other houses will be sold by the state to reimburse its costs.

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 Confiscation of Land
 Confiscation of land refers to the taking of land by the state as a
punishment
 The punishment could be for a crime committed or violation of land use regulations.
Eg.
▪ If one uses the land in such a way which is against public health and
safety.
 If one abandons the land and it becomes a harbor for criminals etc.
 In Ethiopia, if one abandons his farmland for five (ANRS rural land
administration and use Proc.) or more years, the state can claim it
back.
 Violating building codes, agreement, failure to pay tax could be
reasons for confiscation of land.

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Nationalization of Land
 Nationalization is made on a broader basis and supported by
legislation.
 Eg. Ethiopia and Tanzania have nationalized all urban and
rural lands.
 But the purpose seems ideological rather than satisfying the
demand of specific public purpose activities
 In Korea, a legislation was passed to nationalize land
owned by foreigners. The same happened in Zimbabwe
and South Africa.
 In some nations, they nationalized land belonged to the
crown (India, Pakistan), or a dictatorial leader.
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Discussion issue:
 In your sits, discuss about the different land acquisition techniques?
Which are effectively being applied in Ethiopia? Do you think there
may be other modalities for land acquisition?

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 Compulsory Land Acquisition
Nature and Definition: Terminology
 Compulsory Land Acquisition assumes different names
in different legal systems:
 Compulsory purchase: England, commonwealth
 Eminent Domain: United States
 Expropriation: Europe, Ethiopia
 For practical discussion, we shall use all words
interchangeably.

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 Definition
 Corpus Juris Secondum defines eminent domain as:
..it is the right of the nation or state, or of those to
whom the power has been lawfully delegated, to
take private property for public use, and to
appropriate the ownership and possession of such
property without the owner’s consent on paying the
owner a due compensation to be ascertained
according to law.

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  Important elements in this definition

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Inherent Power of the State
 Expropriation is an inherent power of the state like taxation
and ensuring peace and security.
 Public development, laying infrastructure, national defense etc.
are the inherent tasks of the state
 In order to carryout such tasks, the state may need privately
owned land
 But individual owners may not be always willing to sell their
land, and the state has an inherent power to take such
property by paying compensation

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 Public purpose
 Expropriation is a compromise between
public interest on the one hand and
private interest on the other.
 Since private property right is
guaranteed by law, government cannot
easily takeaway this right without good
reason.
 One of the reasons is public interest
(also called public use, public
purpose…).

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 Absence of consent
 Expropriation is like confiscation or
nationalization in that the land is
taken without the consent of the
owner.
 The difference is that in case of
expropriation there is payment of
compensation

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 Chinese Road Construction
Chinese Stadium construction
Bahir Dar

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Compensation
 Even if private interest is compromised in the interest of
society, compensation has to be paid for the loss.
 Therefore, one of the basic requirements of expropriation
are payment of fair compensation.
 Compensation must be equal to the loss or damage
sustained by the owner.

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Def.
 FAO’s definition of the term could be taken as another example:

“Compulsory acquisition is the power of

government to acquire private rights in land
without the willing consent of its owner or
occupant in order to benefit society.”

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 In Ethiopia, the first systematic definition for the concept
was given in the 1960’s under the civil code of Ethiopia.
 Art. 1460. - Definition.
• Expropriation proceedings are proceedings whereby the
competent authorities compel an owner to surrender
the ownership of an immovable required by such
authorities for public purposes.

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FAO Guidelines during expropriation

 The FAO has published guidelines for countries to follow during

expropriation of land.
 It has indicated principles of compulsory purchase and the
problems that may be created because of improper expropriation
process.

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Cont’d
Principles which need to be addressed in domestic
legislations:
➢ Protection of due process and fair procedure:
▪ Rules that place reasonable constraints on the power
of the government to compulsorily acquire land,
▪ Strengthen the confidence of people in the justice
system,
▪ Empower people to protect their land rights, and
▪ Increase the perception of tenure security.

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Cont’d
 Rules should provide for …….appropriate and advance
consultation,……… participatory planning …..
……..accessible mechanisms for appeals,…… and should
limit the discretion of officials.

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Cont’d
 Good governance:
 Agencies that compulsorily acquire land
should be accountable for the good faith
implementation of the legislation.
 Laws that are not observed by local officials
undermine the legitimacy of compulsory acquisition.
 Good governance reduces the abuse of power and
opportunities for corruption.

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 Cont’d
 Equivalent compensation:
The displaced people should be paid compensation
which is no more or no less than the loss resulting
from the compulsory acquisition of their land.
Laws should ensure that affected people receive
equivalent compensation, whether in money or
alternative land.
Regulations should set out clear and consistent
valuation bases for achieving this.

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 Specifically, the following principles shall be adhered
during expropriation:
 The land and land rights to be acquired shall be kept to a
minimum. (Servitude rights may be enough than taking
total holdings)
 Planning processes shall involve all affected parties,
including owners and occupants, government and non-
governmental organizations.

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 Procedures shall be transparent and flexible, and
undertaken in good faith.
 Notice shall be clear in written and oral form,
translated into appropriate languages, with procedures
clearly explained and advice about where to get help.
 Assistance shall be provided so holders can participate
effectively in negotiations on valuation and
compensation.

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 The process should be supervised and monitored to ensure
that the acquiring agency is accountable for its actions.
 The government should take possession of the land after
owners and occupants have been paid at least partial
compensation, followed by clearly defined compensation
guarantees.

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Problems when compulsory acquisition is not done
properly
 Reduced tenure security:
Policies and legislations that strengthen land rights of
individuals and communities may be eroded
through compulsory acquisition.
People may believe they lack tenure security
if the government can acquire rights on private
property without following defined procedures,
and/or
 without offering adequate compensation.

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Cont’d
 Reduced investments in the economy:
Insecure tenure, with the threat of the arbitrary
loss of land and associated income discourages
domestic and foreign investment.

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 Cont’d
 Weakened land markets: Threats to tenure security may;
discourage land transactions,
reduce the acceptability of land as collateral,
discourage people from investing or maintaining their
property and depress land values.

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 Opportunities created for corruption and the abuse of
power:
The lack of protection and transparency can
result in injustices which anger citizens and
undermine the legitimacy of government.

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Cont’d
 Delays projects:
 Appeals against unfair procedures may hold up the
acquisition of land, and thus block projects and increase
costs.
 Inadequate compensation paid to owners and occupants:
 Financial awards may be inadequate to allow
people to enjoy sustainable livelihoods after their
land is acquired. People may feel that they are not
compensated.

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 Reading task:
 Read the ‘historical genesis’ of expropriation both in
Ethiopian and world perspectives

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 Over all Justifications for Expropriation

Holdout (strategic bargaining)

 Public development requires a large size of land
 The state may not rely totally on land purchase as
individual owners may either refuse to sale or demand higher
prices.
 For this reason, individuals may create holdout problem
especially when the size of land is larger.
 E.g. railway, roads, factory

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 Thus, economists generally suggest that to break the strategic
bargaining (holdout) problems and thereby to ensure
public welfare through the construction and implementations
of public works, the state is justified to intervene by using its
expropriation power.
 In Ethiopia, since land sale and purchase is completely
prohibited, expropriation of land from users or lessees is the
common modality to collect and transfer land necessary for
public or private projects determined as beneficiary to society.

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Efficiency
 Efficiency means the most productive use of resources to satisfy competing
material wants.
 Expropriation is also a means to allocate the efficient use of land.
 Land is scarce but it may be held idle or less productive.
 By transferring land from those who use it less efficiently to those who use it
more efficiently, the value added to society could be increased.
E.g. land used for residential along the main street gets 2,000 birr
monthly income
Build on it 20 stories and the monthly income can increase to
1,000,000

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 Constitutional Source of Expropriation
Power
Article 40(8) FDRE Constitution:
 Without prejudice to the right to private property, the
government may expropriate private property for public
purposes subject to payment in advance of compensation
commensurate to the value of the property.
 አንቀጽ 8/ የግል ንብረት ባለቤትነት መብት እንደተጠበቀ ሆኖ መንግስት ለሕዝብ
ጥቅም አስፈላጊ ሆኖ ሲያገኘው ተመጣጣኝ ካሳ በቅድሚያ በመክፈል የግል ንብረትን
መውሰድ ይችላል፡፡

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Cont’d
 Art.7(3) of Proc. No 456/2005 states that “ Holder of rural land who
is evicted for purpose of public use shall be given compensation
proportional to the development he has made on the land and the
property acquired, or shall be given substitute land thereon.
 Where the rural landholder is evicted by the federal
government, the rate of compensation would be determined
based on the federal land administration law.
 Where the rural landholder is evicted by regional governments,
the rate of compensation would be determined based on the rural
land administration laws of regions.

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Cont’d
 Art. 25(1)(a) of proc. No 721/2004 states that……… the
leasehold of urban land shall be terminated if a decision
is made to use the land for other purposes due to public
interest.

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Art.3 of Proc. No. 455/2005 which deals with the power to
expropriate landholdings states that:
 A woreda or an urban administration shall, upon payment in
advance of compensation in accordance with this Proclamation, have
the power to expropriate rural or urban landholdings for public
purpose where it believes that it should be used for a better
development project to be carried out by public entities, private
investors, cooperative societies or other organs, or where such
expropriation has been decided by the appropriate higher regional
or federal government organ for the same purpose.

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Cont’d
Proc. No.1161/2019
Art.5. Decision on Expropriation for Public Purpose
1/ The appropriate Federal Authority, or a Regional, Addis Ababa,
Dire Dawa cabinet shall decide on the basis of an approved land use
plan; or master plan; or structural plan whether the expropriated
land directly or indirectly brings better development and is
beneficial to the public.

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 Therefore, according to the above legal frameworks, it is only
governmental institutions which are indicated under the law have the
power to expropriate private property.
 In other words, other organs are expressly forbidden to exercise this
power.
▪ These institutions are presumed to have the required expertise
while expropriating private property.
▪ Specifying a certain organ may have the intent to protect individuals
right from abuse and to establish accountability.

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Expropriation Procedures
Issues for discussion
What are the procedures to adhere during expropriation?`
What steps should the concerned organ follow?

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  In different countries, expropriation may pass
different steps through different authorities.
 In most countries it passes through administrative and
judicial procedures.
 In others it is a pure administrative procedure.

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 The Power to Determine Various Issues of
Expropriation
Points for discussion
 Who has the power to make decision on the existence of
public interest in Ethiopia?
Administrative or Judicial Organ or both?
 Who has the power to make decision on the amount of
compensation in Ethiopia?
Administrative or Judicial Organ or both?

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 Involvement of administrative Vs Judicial organ
during expropriation

Hybrid Administrative Administrative

decides public
Administrative
works determines both public
purpose and
Court decides compensation

1. Public purpose
2. compensation Only appeal to courts on
grievances on the amount
of compensation and/or
Administrative issues of public interest.
appropriates land
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 An organ who can made the final decision
 5. Decision on Expropriation for Public  Art. 11. Complaints and Appeals in
Purpose: Relation to Compensation ( Proc.
 1/The appropriate Federal Authority, or a 455/2005)
Regional, Addis Ababa, Dire Dawa cabinet I/ Rural areas and in an urban center
shall decide on the basis of an approved where an administrative organ to
land use plan; or master plan; or hear grievances related to urban
structural plan whether the landholding is not yet established, a
expropriated land directly or indirectly complaint relating to the amount of
brings better development and is compensation shall be submitted to
beneficial to the public. the regular court having
jurisdiction.

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 Cont’d
Right to
Proc. No. 1161/2019, Art.6
Complain/Appeal
Powers to Clear Landholdings
High Court: regional Level
Federal First Instance Court:
 The City or Woreda administration Addis Ababa and Dire Dawa
has the power to order evacuation City
and takeover land decided to be
expropriated for public purpose
under Article 5 of this proclamation. Appeal Hearing Council

Complain Hearing
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 Procedural steps (General):
 Planning:
Determining the different land options available for
meeting the public need in a participatory fashion.
The exact location and size of the land to be acquired
is identified.
Relevant data are collected and the impact of the
project is assessed with the participation of the
affected people.

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 Publicity:
Notice is published to inform owners and occupants in the
designated area that the government intends to acquire
their land.
The notice describes the purpose and process, including
important deadlines and the procedural rights of people.
Publicmeetings provide people with an opportunity to learn
more about the project, and to express their opinions and
needs for compensation.

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Procedural…
 Valuation and submission of claims:
The property shall be valued by the authorized body.
Equivalent compensation for the property to be
acquired shall be determined at the stated date of
valuation.
Owners and occupants submit their claims, if any.
Negotiations may follow if not appealed to courts

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 Payment of compensation: The government pays people for
their property or resettles them on alternate land.

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Procedural…
 Possession:
The government takes ownership and physical
possession of the property/land for the
intended purpose.

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 Appeals:
 Ownersand occupants are given the chance to contest
the compulsory acquisition,
including the decision to acquire the land, the
process by which the land was acquired, and the
amount of compensation offered.

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 Cont’d
 The Expropriation Proclamations usually fail to provides a
clear and step-by step required procedures that should be
followed by the administrative authorities in the event of land
expropriation.
 Therefore, there is a need to construct the required procedures
from the reading different provisions of the Expropriation
Proclamations and the regulation.

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 Possible procedural steps in Ethiopia
 Initiation….Planning /making inquiries
 Initiation for compulsory land acquisition
 Deciding public purpose nature
 Public Discussion
 Inventory and valuation
 Determination of properties
 Counting assets
 Measuring land sizes
 Determining amount of compensation
 Notice
 Payment of compensation
 Land appropriation
 Complain
 Appeal

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ዕቅድ የንብረት ግምት የካሣ ክፍያ
• መሬትን ለሕዝብ ጥቅም ለማዋል • ኮሚቴ ማዋቀር (ተቋም • የካሳ ክፍያ ማከናወን (ወይም
ጥያቄ ተቋቁሟል) በዝግ አካውንት ማስቀመጥ)
• ፈንድ (ገንዘብ) መመደብ • ተነሽ ንብረትና ባለንብረትን • ንብረት ማስለቀቅና መረከብ
• የተነሽወች ማንነት፣ የመሬቱ መለየት • አቤቱታ እና ይግባኝ ካለ
መጠን፣ አዋሳኝ • ባለንብረቶችን መጥራት መጠየቅና ማስተናገድ
• የህዝብ ጥቅም ውሳኔ • ንብረት ቆጠራ ማካሄድ • መልሶ መቋቋም
• ለሕዝብ መረጃ ማቅረብና የሕዝብ • የንብረት ግምት ስራ
ውይይት (two stage • የግምት ውጤት ማሳወቅ
public discussion)
 Who can initiate expropriation?
 Implementing agencies: a government agency or enterprise that
undertakes the work.
 Government agency e.g. Ministry of water resources, Urban
Development and Construction, Roads Authority, Railway
Authority etc
 Governmententerprise: Telecom company, Sugar Agency,
Cement enterprise,…
 Private investors: Hotel, horticulture, industry, commerce…
 Cooperatives: Agriculture, manufacturing, housing…
 NGOs

ILA-BDU 5/9/2023 77
 What is expected from them?
1. Land Request: an application to concerned government
authority, Woreda or city administration.
The application must show detail plan (size, location and
purpose of use of land; EIA, financial statement, social and
economic benefit).
2. Pay compensation (after the issues of public interest is
determined, inventory is made and amount of compensation
estimated).
3. Conduct the development/construction as per terms of their
agreement

ILA-BDU 5/9/2023 78
 A. Making Inquiries
 Once the application for land and the accompanying detail plan are
made to the relevant authority, the authority must at least make
the following inquiries:-
1) Ensuring Eligibility
 The authority must ensure that the applicant who requests the
expropriation is a legally permitted person or organ and fulfilled all
the required preconditions (enabling legislation or written permit).
 This is to say that it must be certain that the applicant is one of the
eligible organs mentioned under the proclamation with the required
permit.

ILA-BDU 5/9/2023 79
Cont’d
 The initiating body can not apply expropriation of certain designated
areas.
 There are some forbidden or restricted areas for Expropriation:(Art.
8&9 of ANRS Directive No.5/2003).
 The land requested should not be related to protected or forbidden
areas, such as natural, cultural and historical reserved areas, national
parks, and natural forests etc.

ILA-BDU 5/9/2023 80
 Cont’d
2) Approving Public Purpose
 The higher body or the delegated woreda or urban
administration decides about expropriation and should decide
the public purpose aspect of the project.
 E.g. an expropriation request for personal use, such as
building ones house on the land, may not be accepted.
Why?

ILA-BDU 5/9/2023 81
 Cont’d
3) Weighing Pros and Cons
 An expropriation act has both positive and negative side; while
someone is benefiting, another may be adversely affected.
 Although it is possible in principle and legally permissible to
expropriate, the public benefit thought to be gained may be
insignificant compared to the inconveniences caused as a result of the
action.
 In some countries, it is stated in their law that expropriation shall not
be used if the inconvenience for private individuals outweighs the
public advantage

ILA-BDU 5/9/2023 82
 B. Public Discussion
 Whenever the administration decides on expropriation, the
woreda or municipality calls a public meeting to explain
the purpose.
 Public discussion should not be understood as a “notice”
for the latter will be another stage.

ILA-BDU 5/9/2023 83
Cont’d
 Proc. No.1161/2019, Art. 25. Responsibility of Woreda and Urban
Administrations
 Woreda and Urban Administrations shall:
1/organize consultative meetings with people that are going
to be displaced on the type; benefits; and generally the
process of the project;
1/ተነሺዎችን ስለልማቱ አይነት፣ ጠቀሜታና አጠቃላይ ሂደቱ ላይ ግልጽ
ውይይት በማድረግ እንዲሳተፉ ያደርጋል::
 Read Art. 3 &4 of Regulation No. 472/2020

ILA-BDU 5/9/2023 84
 Cont’d
 The purpose of public discussion should be to try to
persuade the public to accept the project and cede its land
peacefully.
 It also enable the government to hear concerns of the
public and to give answers and to avoid tensions.
 In principle expropriation by its nature does not demand the
consent of the owner, and demanding consent of owners will
be a contradiction in terms.

ILA-BDU 5/9/2023 85
Cont’d
 Under exceptional circumstances, though, the woreda
may need approval of the community before it begins a
project.
 Such peculiar situation happens when the development
work is supposed to be made by the community for its
own use, like rural health centers, roads, or schools.

ILA-BDU 5/9/2023 86
Cont’d
 In this respect, the Amhara rural land administration and use law
declares that;
“where the land expropriation activity is directly related with
the development of the surrounding society, the case shall be
submitted to the kebele people for discussion and obtain a
majority vote thereof, before it is decided by the woreda
branch office of the Authority to expropriate land for public
service.”Art.26(2), Proc. No.252/2017 and Art.
10(5)compensation directive No.05/2003

ILA-BDU 5/9/2023 87
 C. Inventory and valuation
 A critical stage in an expropriation process in Ethiopia is one that
involves the inventory and counting of assets.
 This has to do with the identification and designation of the land to
be expropriated and the counting of assets thereon.
 Identificationof land means locating the land on a map and
certifying the owner thereof; whereas designation of the land
means measuring and determining the land area necessary for
the project.

ILA-BDU 5/9/2023 88
 Cont’d
 Thus, besides identifying and designating the land, the
assets on the land such as, buildings, plants, fences,
and other fixtures must also be counted for assessment
purpose.

ILA-BDU 5/9/2023 89
 Cont’d
 Previously, Art.10 of proc. No.455/2005 requires the woreda or
municipality to setup a “valuation committee” to carry out the
valuation activity, and in principle, it is this committee that is
supposed to go to the area and measure and count the assets.
 In urban areas, usually experts (civil engineers, accountants,
economists…) are used to count property and value.
 In rural areas, local elders, experts from agriculture bureau, land
administration office etc. are involved.

ILA-BDU 5/9/2023 90
Cont’d
 The committee is supposed to count/survey/measure and
give value to all property and report to woreda or city
administration.
 They are required to keep confidentiality of their work and
disclosing the estimated values is the responsibility of the
administration.

ILA-BDU 5/9/2023 91
 Who should estimate values of properties ?

Proc. No.1161/2019: Three alternatives are Provided (Art 17):

 Certified Private Institution or individual consultant valuators on
the basis of a nationally approved valuation method.
 An autonomous government organization established for that
purpose if no private certified property valuation organization or
individual consultant.
 Where the organizations stated above do not exist, valuation
committee established by the relevant Urban or Woreda
Administrations comprising proper professionals.

ILA-BDU 5/9/2023 92
Cont’d
❑ Yet, until now, estimating values of property is carried out
by the committee members (at least, there are no
autonomous institutions or private companies to value
property.
❑ Requirements during the establishment of the committee is
stated under Art.14 of regulation No.472/2020 (required
knowledge, skill, gender and age will be considered).

ILA-BDU 5/9/2023 93
 Cont’d
❑ During the inventory, advance notice should be given to the
property owners:
 During
the inventory of land and assets, the presence of
owners/holders of the property to be expropriated is
mandatory. (Art.10(6), Art.12/1/ ANRS Directive No.05/2003)
 What if he doesn’t want to participate? Art.12/5/ ANRS
Directive No.05/2003)
 Following the counting and measurements, owners and the valuation
committee members are required to sign to prove its accuracy.
(Art.12/3/ ANRS Directive No.05/2003)

ILA-BDU 5/9/2023 94
Cont’d
 The committee members should gather various information/data, during the
inventory process including;(Art11(1-19), Directive No. 05/2003)
 Full information and address about the person to be expropriated
 Check the legitimacy of owners (of houses) and holders (of lands) by checking
ownership or holding certificates and in the absence of which other evidences.
 Holding size
 Land use plan of the holding(irrigable land, rain fed holding, annual or perennial crops,
forestry, residential)
 Annual(biannual) income from the harvest for the last three years
 Size of the grazing area
 Trees planted on the land to be expropriated
 Water and soil conservation works, terracing , ditches etc.
 Costs incurred to make improvements on the land
 Residential houses, grain storage, cowshed (Number, size, building materials etc.)
ILA-BDU 5/9/2023 95
 Valuation of Properties
 Primarily the data about legitimacy of the landholding/property
ownership right, inventory of all compensable properties should be
collected and refined.
 Valuation of the compensable items will be made by committee
members(since the other two options are not yet available)
 The committee will be designated by the woreda or municipality and
members must have some relevant expertise or knowledge.
 The number of the committee members should not be more than
five, and they will perform their task discreetly and report their
findings to the woreda.

ILA-BDU 5/9/2023 96
Cont’d
 The committee will use relevant and updated information
that will help to estimate the value of the properties.
 When the information is available in the hands of other
offices, they have the authority to demand.
 Forexample, productivity of land or market value of crops and
trees may be acquired from the woreda agriculture office or
trade and industry office.

ILA-BDU 5/9/2023 97
 D. Notification
❑ Notice is one of the procedural requirements explicitly dictated in
the proclamation.
❑ Notice has to be made in “writing, indicating the time when the
land has to be vacated, the type and amount of compensation to be
paid.”

ILA-BDU 5/9/2023 98
 Thus, in theory, notice must contain every information about:-
 The amount of land to be taken (all or part),
 The time frame within which the holder is expected to move,
and
 Most importantly, the amount of compensation the
implementing agency should pay.
 Sufficient information about the replacement land(if any)

ILA-BDU 5/9/2023 99
 Cont’d
 Notice should be primarily made in writing and whenever the
situation demand it should also be communicated orally.
 The issues of notice with their own context have indicated in
different provisions:
 Proc. No.1161/2019, Art. 8(1-9), Art. 20,
 Regulation
No.472/2020 Art. 4(1), Art.32(types and amount of
compensation)

ILA-BDU 5/9/2023 100

 Cont’d
 Art.8(4) Land holder who is served with notice to handover his
landholding shall take the compensation and replacement plot or
house within 30(thirty) days of notice.
 But what if he/she refuse to accept the compensation within the
given time frame?
 According to Art.8(5) Proc. No1161/2019…… the compensation
payment shall be deposited in the closed bank account of the city or
Woreda Administration.
 አንቀጽ 8(6) ለባለይዞታው የሚሰጠው የመልቀቂያ የጊዜ ገደብ ካሣና ምትክ ቦታ ከተቀበለ ወይም
ካሣው በዝግ ሂሳብ ከተቀመጠበት ቀን ጀምሮ ከአንድ መቶ ሀያ ቀናት መብለጥ የለበትም፡፡

ILA-BDU 5/9/2023 101

Cont’d
 Art.8(8) Where the land expropriated is under illegal
occupation, the occupant shall evacuate without claim
for compensation within 30 (thirty) days of notice.

ILA-BDU 5/9/2023 102

Cont’d
 However, in some cases the practice does not align with the
requirement of the law.
 Because in practice, written notice is not given to each
and every household and the result of the compensation
is posted on notice board (in cities), and farmers were
informed in offices in rural areas.

ILA-BDU 5/9/2023 103

 Cont’d
Impacts of providing notice:
 Once property is measured and counted for valuation purpose,
the owner should not make additional improvements such as,
planting trees and constructing buildings that increase the value of
the property.
• (exceptions Art.8(3, a-c), if compensation is not paid within
three months of the notice about compensation (can not
plant perennial crops and buildings…possible to plant annual
crops and minor improvement) and six months(any activity
approved by the plan).

ILA-BDU 5/9/2023 104

 Cont’d
Previous Approaches:
 Regulation No. 135/2007 under Article 19 elaborates on the subject by
stating,
“There shall be no payment of compensation with respect of any
construction or improvement of a building, any crops sown,
perennial crops planted or any permanent improvement on land,
where such activity is done after the possessor of the land is
served with the expropriation order”.

ILA-BDU 5/9/2023 105

 E. Payment of compensation, appeal and
appropriation of land

 In Ethiopia, the initial amount of compensation is

estimated by the Woreda/city administration.
Exception Art.10 regarding utility line
 Once the valuation committee finalizes its assessment, it
reports the results to the woreda/city administration and
the latter communicates this to the affected people and
to the implementing agency.

ILA-BDU 5/9/2023 106

Cont’d
 Ground for appeal: which one can be invoked in our case?
 Public purpose decision and the corresponding preconditions
(Art.5(4))
 Failure to comply with the required procedures (failure to
provide notice, failure to pay advance compensation )
 Types and amount of compensation (money and/or land,
amount of money, size, fertility and location of replacement
land)

ILA-BDU 5/9/2023 107

Cont’d
 If the owner or holder has a grievance on the amount of the
compensation/preconditions for determining public
purpose, he may petition to the administrative “ complaint
hearing body” established within the woreda or municipality
administration.
 The complaint hearing body, after investigating the matter
may either affirm the amount or order re-evaluation of
assets.

ILA-BDU 5/9/2023 108

cont’d
 If the person is dissatisfied with the decision of complaint
hearing body, he may appeal to the Appeal Hearing Council
then to High Court in regional states and in case of Addis Ababa
and Dire Dawa city, Federal First Instance Court within 30
(thirty) days of the receipt of the decision in writing.

ILA-BDU 5/9/2023 109

Cont’d
 When lodging an appeal by the aggrieved party:
 It should be accessible
 It should not be time consuming
 Itshould not be expensive or the cost should be covered by
the government or free legal aid should be arranged(Art.20(3)
Proc. No1161/2019)
 It should be less formal

ILA-BDU 5/9/2023 110

Cont’d
 Most of the complaints and appeals made are associated
either with…………… the improper measurement of land
or non-consideration of property for compensation.
 The usual reason for refusal/non-consideration properties by the
committee is primarily attributed to :
 The owner has no legitimate document that shows his right, or
 The building made is on land outside his holding, or
 Building were added illegally or without permit.

ILA-BDU 5/9/2023 111

Cont’d
 Failure to pay advance compensation(total or partial) is
also one of the main factor for complaint/appeal
 There are instances whereby expropriated individuals
receive compensation a year after they were removed
from their land, and even in that case it was not paid at
one lump sum but in different installments.

ILA-BDU 5/9/2023 112

Cont’d
 If he does not make a successful appeal within that period, then
the holder will be assumed as if he has agreed on the amount and
“…shall hand over the land to the woreda or urban administration
within a maximum of 120 days from the date of payment of
compensation.
 If the holder of the land still refuses to hand over the land, then
the urban and woreda administration may request police
assistance (Proc. No 1161/2019, Article 8(9)).

ILA-BDU 5/9/2023 113

 Cont’d
 If the implementing agency is a public body (administrative or
enterprise), then, usually, it is the woreda that pays the
compensation after the money is transferred to its account.
 On the other hand, if the implementing agency is a private one,
then, mostly, it is this body that pays the compensation directly,
but in some areas (such as Oromia), the woreda pays once the
money is put in its account by the private investor.

ILA-BDU 5/9/2023 114

F. Resettlement Program
 A workable definition about the meaning of resettlement
and rehabilitation program is necessary.
 “Resettlement” means to settle or cause to settle
displaced people in a new or different place, while
 "መልሶ ማቋቋም/“Resettlement”" ማለት ለልማት ተብሎ በተወሰደው መሬት
ምክንያት የሚያገኙት ጥቅም የሚቋረጥባቸው ተነሺዎች ዘላቂ የገቢ ምንጭ
እንዲኖራቸው የሚሰጥ ድጋፍ ነው (አንቀጽ 2(7))

ILA-BDU 5/9/2023 115

 Cont’d
 “Rehabilitation” is restoring the community to its former state,
way of life, capacity, or income level.
 Resettlement program, in our context, is understood as a support
provided to people who are physically displaced from their land
as a result of expropriation decision.
 አንቀጽ 2(10) "የማቋቋሚያ ማዕቀፍ/“Resettlement package”" ማለት ለህዝብ ጥቅም
ሲባል ከመሬት ይዞታቸው እንዲነሱ ሲደረግ ዘላቂ የሆነ የገቢ ምንጭ ሊኖራቸው የሚያስችል
የሥራ መርሐ ግብር ነው፡፡

ILA-BDU 5/9/2023 116

Cont’d
 Although countries may adopt different packages of
assistance in their laws, the World Bank lists the following
as essential ones:
 Transportation,food, shelter, and social services that are
provided to affected people during their relocation.
 Assistance may also include cash allowances for the
inconvenience associated with resettlement and payment of
expenses of a transition to a new locality, such as moving
expenses and lost work days.

ILA-BDU 5/9/2023 117

Cont’d
❑ In the case of Ethiopia what kinds of legal provisions do we
have regarding resettlement and rehabilitation program?

ILA-BDU 5/9/2023 118

 Cont’d
 The nature and existence of resettlement program in
Ethiopia can be inferred from what is envisaged in the
FDRE Constitution, Article 44, as follows:
All persons who have been displaced or whose livelihoods have
been adversely affected as a result of State programmes have
the right to commensurate monetary or alternative means of
compensation, including relocation with adequate State
assistance.

ILA-BDU 5/9/2023 119

Cont’d
 The question is whether this provision applies during
expropriation as well?
 What makes us uncertain about this provision is that all
expropriations are not necessarily related to state
programs; expropriation may also be made for private
programs/investments.

ILA-BDU 5/9/2023 120

Cont’d
 “Expropriation of Land holdings for Public Purposes, Payments
of Compensation and Resettlement Proc. No. 1161/2019”,
Preamble(4th):
……it is necessary to identify and define the powers
and responsibilities of authorities which are in charge
of property valuation; payment of compensation and
resettlement;

ILA-BDU 5/9/2023 121

Cont’d
 Purposes of resettlement assistance:
❑ Art.4(2) Compensation and resettlement Assistance
Compensation for the expropriated land shall sustainably
restore and improve the livelihood of displaced people.
❑ አንቀጽ 4(2 )ለሕዝብ ጥቅም መሬት ሲለቀቅ የሚከፈለው ካሣና የሚሰጥ
የማቋቋሚያ ድጋፍ የተነሺዎችን የኑሮ ሁኔታ የሚያሻሻልና የሚያስቀጥል መሆን
አለበት፡፡

ILA-BDU 5/9/2023 122

Cont’d
Required budget for resettlement:
 Art. 16(1). Resettlement:
Regional States, Addis Ababa and Dire Dawa City Administrations shall
establish fund for compensation payment and rehabilitation.
 According to Art.23 (2) they are also required to develop and
implement resettlement packages. An independent entity that
implement and govern this framework shall be established or
appointed from this institution to bear this responsibility.

ILA-BDU 5/9/2023 123

 Cont’d
 Regulation No.472/2020: Art.35(1)(A) A resettlement
package should contain:
 Residentialhousing, livelihood options, social services like roads,
health clinic, schools, religious sites, training, counseling, and
credit access and other similar services.
 Proc. No.1161/2019, Art.5(3) The budget necessary to cover
the costs of compensation and resettlement and the
responsible body that shall cover these costs shall be made
clear at the time when expropriation for public purpose is
decided.

ILA-BDU 5/9/2023 124

 cont’d
 Art. 16(3) Prime responsibility
 Urban or Woreda Administrations shall have the duty to
resettle the People displaced on the basis of the resettlement
package and allocated budget.
 Art.22 (1)(b) Ministry of Construction and Urban Development
shall: Support resettlement of displaced people from urban
areas;
 Art.22(2)(b) Ministry of Agriculture shall: Support resettlement
of displaced people from rural areas.

ILA-BDU 5/9/2023 125

 Cont’d
 Previous approach:
 Under the expropriation proclamation, it is declared that,
“With respect to the implementation of the proclamation, woreda and
urban administration shall have the responsibilities and duties
to…provide them [the displaced people] with rehabilitation support
to the extent possible.” Art.13(1) of proc. 455/2005.
 Meaning the proclamation requires the woreda and urban administration
to “do their best” (within their ability and capacity to do so) in providing
the rehabilitation support.

ILA-BDU 5/9/2023 126

Cont’d
 In reality, under the previous legal regime except for the usual
compensation package, since woredas and municipalities lack
separate budgets for this purpose, rehabilitation assistances
were not given to expropriated people.

ILA-BDU 5/9/2023 127

 Cont’d
 However, still resettlement and rehabilitation tasks may not be
an easy task for the government since they require huge
resources(financial and qualified human resource) and a place
to settle the displaced people.
 Lackof comparable land in urban areas and arable land in rural
areas seems to be a continuing hindering factors for effective
resettlements.

ILA-BDU 5/9/2023 128

Cont’d
 Lack of entrepreneurial skill of the expropriated individuals is
one of the contributing factor in inappropriately spending the
paid compensation money.
 Capacity of the woreda and city administration to provide
the required advise/consultation and counseling should also
be assessed.

ILA-BDU 5/9/2023 129

 Public Purpose
 Public purpose is the first requirement for the exercise
of the power of expropriation.
 A looking into different countries’ legislations reveals that
the concept of public purpose is given different names.
For example, in the USA it is known as “public use”, in Europe
it is generally known as “public interest” and in Ethiopia it is
called “public purpose.”

ILA-BDU 5/9/2023 130

Cont’d
 The public purpose requirement demands that individual
property may be taken only if that serves society at large,
not an individual.
 The significant characteristic of public purpose is that it is an
elastic concept which does not have fixed and absolute
objective;
 public responsibilities regarded as being in the public interest in
one setting may not be so regarded in a different context.

ILA-BDU 5/9/2023 131

Cont’d
 Public purpose shall be determined by establishing an equitable
balance between the social interest on the one hand, and that of
the individuals’ on the other.
 The state is not provided with absolute expropriation power to
take private property, even upon payment of fair compensation.
 If we allow the state to freely transfer properties among and between
individuals, it may open a door for abuse of power in the long run,
since people will try to influence the state to decide in their favor.

ILA-BDU 5/9/2023 132

 Cont’d
 Public purpose serves as a parameter for the state to take
private property for some social good and it usually “…has for
its objective the promotion of the public health, safety, morals,
general welfare, security, prosperity, and satisfaction of ‘all’
the inhabitants or residents within a given political division.

ILA-BDU 5/9/2023 133

 Broad and Narrow Definition of Public Purpose

 Based on narrow view, Lewis, a scholar in eminent domain, has

defined “public use” as follows:
… the employment or application of the thing by the public. Public
use means the same as use by the public,
➢ Public has the right to a definite and fixed use of the property
appropriated, not as a mere matter of favor or by permission of the
owner, but as a matter of right.

ILA-BDU 5/9/2023 134

 Cont’d
 Broader view:
▪ Anything which tends to enlarge the resources, increase the
industrial energies, and promote the productive power of any
considerable number of the inhabitants of a section of the state
manifestly contributes to the general welfare and the prosperity
of the whole community constitutes a public use.

ILA-BDU 5/9/2023 135

 Approaches of determining public purpose
 As it is indentified by some scholars public purpose doctrines are
expressed in two basic ways;
A. General guidelines,
 In such a case the legislation state merely that expropriation is
required for a public purpose, or other similar words.
 This kind of expression leaves a great amount of discretion to the
executive power/government and to the courts.
 Whenever the government wishes to take a land for a certain purpose, it
can justify it on the general principle of public purpose.

ILA-BDU 5/9/2023 136

 Cont’d
B. Listing provisions
❑ In such a case the legislation explicitly identify the purposes
for which land may be taken.
Governing laws may state activities/projects/facilities like
schools, health centers, government offices, roads,
military installations, utilities and so on as activities that
benefit the public.
 The list may be illustrative or exhaustive, as the case may be.

ILA-BDU 5/9/2023 137

 Cont’d
 When we look into the current Ethiopian system, an investigation of the
FDRE Expropriation Proclamation shows that the approach used is the first
one.
 The previous repealed Proclamation for appropriation of land for
government works, Proc. No. 401/2004, Art.2(2), on the other hand, listed
the kinds of projects that constituted public purpose.
 Under the repealed proc. power generating plants, highways, airports,
dams, railways, fuel depots, water and sewerage facilities, telephone
and electrical works and other related activities were listed as public
purpose activities

ILA-BDU 5/9/2023 138

 Public Purpose under Ethiopian Context
The FRDE Constitution
 Public purpose as a limitation on the expropriation power of the
sovereign state is well recognized in the current Ethiopian
Constitution.
 Article 40 (8) of the FDRE Constitution permits the expropriation
of private property provided that the taking would be for
“public purpose” activities:
 Withoutprejudice to the right to private property, the government may
expropriate private property for public purposes subject to payment in
advance of compensation commensurate to the value of the property.

ILA-BDU 5/9/2023 139

 Cont’d
 A reading of another limb of Article 40 (1) of the Constitution reveals also
that the term “public interest”
 Every Ethiopian citizen has the right to the ownership of private
property. Unless prescribed otherwise by law on account of public
interest, this right shall include the right to acquire, to use and, in a
manner compatible with the rights of other citizens, to dispose of such
property by sale or bequest or to transfer it otherwise (emphasis
added).

ILA-BDU 5/9/2023 140

Proc. No.455/2005
 Art.2.5 "public purpose" means the use of land defined as such
by the decision of the appropriate body inconformity with
urban structure plan or development plan in order to ensure
the interest of the peoples to acquire direct or indirect
benefits from the use of the land and to consolidate
sustainable socio-economic development;

5/9/2023 141

ILA-BDU
Cont’d
 Article 3(1) of the proclamation has also emphasizes that the
appropriate body may expropriate land “for public purpose
where it believes that it should be used for a better
development project to be carried out by public entities,
private investors, cooperative societies or other organs…”

ILA-BDU 5/9/2023 142

 Proc. No.1161/2019
 Art.2 (1)“Public Purpose” means decision that is made by the cabinet of a
Regional State, Addis Ababa, Dire Dawa or the appropriate Federal Authority
on basis of approved land use plan or; development plan or; structural
plan under the belief that the land use will directly or indirectly bring
better economic and social development to the public;
 አንቀጽ 2(1)"የህዝብ ጥቅም" ማለት በቀጥታም ሆነ በተዘዋዋሪ መንገድ ማሕበራዊና ኢኮኖሚያዊ ልማትን
ለማጎልበት የክልል ካቢኔ፤ የአዲስ አበባ፤ የድሬዳዋ ወይም አግባብ ባለው የፌዴራል አካል በመሬት አጠቃቀም
ዕቅድ ወይም በልማት ዕቅድ ወይም በመሠረተ ልማት መሪ ፕላን መሠረት ለሕዝብ የተሻለ የጋራ ጥቅምና
ዕድገት ያመጣል ተብል የተወሰነው ነው፡፡

ILA-BDU 5/9/2023 143

 Valuation and compensation

 What is valuation?
 What type of valuation method is used in Ethiopia?
 What are the compensable interests?
 Why compensation for expropriation?
 Principles of compensation
 Types of compensation?

ILA-BDU 5/9/2023 144

 Cont’d
 Expropriation is a forced sale and is distinguished from
confiscation in that the owner/holder will be compensated for
the property taken.
 Besides the requirement of public purpose, payment of
compensation is equally important as a limitation on the
government’s power of expropriation and to strike a balance
between interests of the public and individuals property
owners/holders.
 This is a fact generally found in all legal systems of the world.

ILA-BDU 5/9/2023 145

 Valuation
 Valuation is the process of estimating/determining the current worth of an asset,
mostly real property.
 According to Proc. No.1161/2019, Art.2(8)“Valuation ” is defined as a common
compensation valuation method used to calculate the value of property on
expropriated land;
 There are mainly three valuation approaches: the comparative sales, the income
capitalization and the cost replacement approach.
 The choice of valuation method will depend upon the,
 Purpose of valuation,
 Type of property, physical and other features of the property,
 Availability of relevant data, and
 Government regulations

ILA-BDU 5/9/2023 146

 Cont’d
 Which method is primarily adopted in the Ethiopian Context?
 According to Art.12(2) Proc. No.1161/2019:The cost replacement approach is
the one applied in Ethiopia.
 The amount of compensation for the property on the land shall cover
the cost of replacing the property anew.
 In this approach, value is estimated as what it would cost to replace the
structure.
 This implies that unlike appraisers elsewhere, who are at liberty to follow
one or more valuation methods, in Ethiopia, the replacement cost approach
is the only method to be adhered.

ILA-BDU 5/9/2023 147

Cont’d
 Reg. No. 472/2020, Art. 15(3) which has dealt with Property
Valuation stated that:
 Wherethe property to be demolished is a house, the compensation
to be paid shall be enough to build the minimum housing
standard set by the regional governments; Addis Ababa and Dire
Dawa City Administration

ILA-BDU 5/9/2023 148

Cont’d
 Normally, the value of a property is derived by adding the estimated value of
the land to the current cost of constructing a replacement for the
improvement and then subtracting the amount of depreciation.
 (Sitevalue(land value) + replacement cost of new property) –
(depreciation allowance)
 However, in Ethiopia,
 The land has no value.
 The methods to determine depreciation is not addressed under the
proc.
 This approach is based on the assumption that cost equals value.

ILA-BDU 5/9/2023 149

 Cont’d
 The proclamation left the details of the valuation formula to be developed by
the Council of Ministers.
Art.12(6) of Proc. No.1161/2019 has stated that Valuation methods to
determine compensation for various properties and detail
prescriptions applicable thereto shall be provided for by a Regulation.
 Assessors are required to follow the legal provisions in estimating the
replacement costs of each property on the land.

ILA-BDU 5/9/2023 150

Cont’d
 Accordingly, Regulation No. 472/2020 has provided details on the method
of assessing different interests affected by the expropriation.
 E.g. Art.16 Compensation for Building
Art.17 Calculation and compensation of Fences
Art.18 Compensation for Property to be relocated
Art. 19 Compensation for Crops
Art. 24 Calculation and compensation for burial ground
etc.

ILA-BDU 5/9/2023 151

Cont’d
 Existing experience shows that professionals who practice valuation are
largely are lacking the required knowledge and skill of property
valuation, employ unjustified reasons either to reduce/deny/suspend
payment of compensation.
 This has led to inadequacy of compensation, corruption, and
accelerating number of cases reporting of appeals in courts.
 This implies that there should be a mechanism by which fair property
valuation can be carried out in order to balance the public and private
interests.

ILA-BDU 5/9/2023 152

Compensation
 The constitutions of most countries contain compensation clauses.
 However, the procedure, determination of the amount and payment of
compensation differ from country to country depending upon their
own prevailing circumstance.
 The justifiable reasons why compensation paid includes:
 first,compensation is paid to protect the citizen from harmful
government interference, and
 second, compensation is paid to distribute the burden of the
government interference.

ILA-BDU 5/9/2023 153

 Cont’d
 Compensation is defined as “full indemnity or remuneration for the loss
or damage sustained by the owner of the property taken or injured for
the public use.”
 In principle during payment of compensation there should be No Loss –
No Gain
 The compensation requirement under the law demands that the
expropriator reimburses the expropriated for the property interest
taken and places the latter in as good a pecuniary position as if the
property had not been taken.

ILA-BDU 5/9/2023 154

Cont’d
 Fair compensation can be reached through payment of market
value(willing buyer and willing seller).
 The compensation principle in Ethiopia is enshrined under Art.
40(8) of the Constitution as Commensurate (equal to the
amount of damage)

ILA-BDU 5/9/2023 155

 Compensable Interests in Ethiopia
 As per the reading of Arts. 40 (1) (2) (3)(7) &(8) of the FDRE Constitution
private property is the subject of compensation.
 Private property is everything a person creates by his labor, enterprise,
capital and skill on the land.
 But it does not include the land/ground itself
 Therefore, in Ethiopia private property means all those properties
rested/situated on the land and improvements made to the land.

ILA-BDU 5/9/2023 156

 Cont’d
 In urban areas, properties situated on the land include buildings
(residential, commercial, and industrial), fence, utility lines,
religious buildings, burial structures, tree plants, and other
structures.
 In rural areas, residential houses, farm houses, storage houses,
livestock sheds and shelters, fence, trees, crops and grass are
considered as properties situated on the land.

ILA-BDU 5/9/2023 157

 Cont’d
 Improvements to the land, based on the above definition,
facilities (water and sewerage, streets etc) and area beautification
may be considered as improvements to the land in the case of
urban areas.
 In rural areas, land terracing, clearance and leveling works,
irrigation canals and water wells and reservoirs are examples of
improvements to the land which cost the holder for their
construction.

ILA-BDU 5/9/2023 158

Compensation and Support packages:-
 Property Compensation: is payment to be made in cash or in kind or in
both for permanent improvements situated on his expropriated
landholding (See Arts 2(2) and 12).
 Displacement Compensation (የልማት ተነሽ ካሣ) (Art 2(3)) and substitution of
land(Art.13),: is payment to be made for the loss of use right on the land
 Displacement Assistance (የልማት ተነሽ ድጋፍ): payment to be made for a
landholder who permanently or temporarily displaced to help him
adjust to the new place (Art 2(4), Art.13(5))
 Economic Loss Compensation /የኢኮኖሚ ጉዳት ካሣ/: is payment to be
made to those who are not displaced but who suffer loss of
employment, trade, or rentals, or similar activities (Art 2(5) and
Art.14 Proc. No1161/2019).
 Social Ties Discontinuance and Moral Damage
Compensation/የማህበራዊ ትስስር መቋረጥና ሥነ-ልቦና ጉዲት ካሣ/ : is payment for
the breakup of their social ties and moral (Art 2(6) Proc.
No.1161/2019 and Art.30 Regulation No.472/2020 varies from
25,000-60,000 Birr).
 Resettlement/መልሶ ማቋቋም/: ማለት ለልማት ተብሎ በተወሰደው መሬት
ምክንያት የሚያገኙት ጥቅም ለሚቋረጥባቸው ተነሺዎች ዘላቂ የገቢ ምንጭ እንዲኖራቸው
የሚሰጥ ድጋፍ ነው (Art.16 Proc. No.1161/2019, Art35 of Reg.
No.472/2020)

ILA-BDU 5/9/2023 161

Cont’d
 As a matter of principle, loss of land is not compensable.
 What the government pays is giving replacement land or paying
displacement compensation.
 In urban areas, replacement land is usually provided (or the chance of
buying Condominium house) and one year’s displacement compensation in
the form of rent (replacement cost+1 year’s rent + cost of relocation)
 In Rural areas, if land is available it will be given as replacement. If there
is none, then displacement compensation will be provided.

ILA-BDU 5/9/2023 162

Urban
 In urban areas displaced people are offered with some
alternatives.
 Replacement Cost +Rent + Replacement land+ relocation
cost
 Replacement Cost +Rent + chance of buying Condominium
house + relocation cost
In the second case, the replacement cost will be used
for purchasing condominium house

ILA-BDU 5/9/2023 163

Urban
 With those who get replacement land the problems are the
incomparability of land location advantage and the non
compensated distance.
 Incity centers people used to walk less to work and public
facilities. Some women operated business from their homes.

ILA-BDU 5/9/2023 164

Rural-Displacement compensation
If no replacement land is given:
 Permanent displacement compensation in rural areas is calculated by taking
the highest income of the past 3 years and multiplying it by15. Art.13(1/C),
Proc. No.1161/2019.
If replacement land is given:
……..land holder shall be paid a one year landholding compensation
income which is equal to the highest income he annually used to generate
in the last three years preceding the expropriation of the
land.(Art.13(1/B), Proc. No.1161/2019)
Art.13(2) Displacement compensation for temporarily displaced Rural landholders

ILA-BDU 5/9/2023 165

Problems
 The 3 years highest income calculation does not reflect the actual harm.
 First it does not consider the likely inflation that may happen in the
future
 Secondly it does not consider the likely future increase of productivity
(yield is increasing because of use of modern farming technology)
 In case of land replacement it does not consider differences in size,
fertility, location and so on

ILA-BDU 5/9/2023 166

Compensation for peri-urban
 Peri-urban is the periphery of the urban centers. Those are land expropriated
by urban centers for urban expansion (housing, industry etc)
 The farmers who lost their land will get the following compensation package;
 Compensation for private property
 Displacement compensation
 Urban land for housing construction(Up-to 500m2 Art.15(1) Proc.
No.1161/2019 )
 Minimum size of land as per the standard of the town for children of the
landholders(above 18 years and who is dependent on and living with the
farmer, Art.15(2))
 One/Two years Rent
ILA-BDU 5/9/2023 167
Appeal-amount of compensation
 The role of courts in the whole expropriation process is regarded as
nil/not to the expected level.
 However, Courts can hear compensation issues by appeal.
 Any complaint concerning inadequacy of compensation can be seen first by
complaint hearing committee, then by the appeal hearing body and
finally by the judicial organ.(Art 18-20 Proc. No.1161/2019)
 What if a person directly go to courts?

ILA-BDU 5/9/2023 168

Cont’d
 Details of compensation packages can also be referred from Art.14- 31
of ANRS Compensation Directive No.05/2003(some of the issues will be
adjusted/ new ideas may be included in accordance with the
requirement of Proc. No.1161/2019 and Regulation No.472/2020).

ILA-BDU 5/9/2023 169

 In general, while determining the amount and types of
compensation all necessary precautions must be taken to come
up with adequate amount of compensation

ILA-BDU 5/9/2023 170

 Thank You
and
Good Luck!!!

ILA-BDU 5/9/2023 171