The Addis Abeba City Administration officials have sanctioned plot allotments for various developers, comprising sectors from banking to hospitality. The move made three weeks ago, authorised by Girma Beka, head of the City Cabinet Affairs, represents a substantial increase in the city's developmental agenda, with a selection of 168 developers — a threefold rise from the previous year. Among the beneficiaries are notable entities such as Sidama Bank and the culinary establishment Mama's Kitchen.
The decision is part of the City Administration's ambitious plan to see the construction of four commercial bank headquarters, 16 five-star hotels, 46 malls and residential apartments, 15 places of faith, 26 industries, and 47 project extensions. The plan also includes provisions for six plots earmarked to compensate farmers. City officials say the projects align with the Administration's vision of urban development and economic growth.
Despite the apparent progress, the city's land policy has been subject to criticism from various quarters. Academics and urban planning experts frequently question these policies' effectiveness and transparency. The municipality receives an average of 700 requests for allocations annually, revealing the high demand for land in the capital. A recent study by a trio of urban planning experts calls for the exploration of alternative strategies for land allocations, stressing the need for a more equitable and transparent approach.
Critics point to the prioritisation of commercial and recreational developments over the dire need for residential housing in the city.
Worku Nega, a researcher in the land administration and surveying department at Debre Markos University, advocated for comprehensive studies on the feasibility of allocation policies. He argued for a balanced approach that considers the potential for employment opportunities and services that benefit the broader public, pressing the importance of societal benefits in investment returns.
“Return on investment should consider the rest of society,” he said.
Beginning last week, developers have already begun the process of transferring land from the Land Development & Administration Bureau. The allotment terms require developers, except religious institutions, to deposit up to 20pc of the total lease price in advance.
Tesfaye Tilahun, head of the Land Preparation Directorate, disclosed that the selection criteria focused on the purpose and developers' financing source, chosen from a pool of applicants who have submitted requests over the past few years. Tesfaye said the thorough evaluation process preceding approval shows the Administration's commitment to prudent land allocation.
"Detailed evaluation precedes approval," he told Fortune.
This development, however, is not without its drawbacks. Tesfaye noted that some plots might cause the relocations of residents, a situation reminiscent of the near-demolition of the Fendika Cultural Center, a recognised landmark in the Cassanchis area, for a hotel project last year — a move that sparked public outcry.
The allocation process complied with a land lease law issued 12 years ago, while a directive from the City Administration governing lease prices was issued four years prior. City officials anticipate collecting approximately four billion Birr from lease payments this year. These payments vary based on location and are categorised into four primary grades and 18 subcategories.
Among the notable recipients of a 3,245Sqm plot is Dadi Jira, a principal investor in the Denbel View Hotel in Adama (Nazareth), Oromia Regional State. Dadi, who founded the three-star hotel with a capital of 60 million Br, has been approved to construct a five-star international hotel in a prime location near Piazza, close to Eliana Hotel, on Churchill Road. Given the significant time lapse since his initial application five years ago with a capital of 200 million Br, he faces the rising construction costs to see this venture come through.
“It's not even enough to lay a foundation,” he told Fortune.
Mama’s Kitchen, a well-known brand, is set to acquire a 2,500Sqm plot in the Arada District, coinciding with its expansion project near Jubilee Palace. The allocations followed last year's discovery by the city's Land Bureau of 130 hectares of unused plots transferred to 558 developers since 2016, leading to the repossession of plots from 59 would-be developers and its subsequent return to the city's land bank.
The financial sector is also poised for growth, with Amhara, Hijira, Addis International, Sidama Bank, and Awach Microfinance planning to commission the construction of their respective headquarters among the new developments.
Taddese Hatiya, president of Sidama Bank, disclosed to Fortune plans to erect a 32-floor headquarters on a 6,000Sqm plot in the financial district, a.k.a Addis Abeba's Wall Street, on Ras Abebe Aregay St. The Bank transitioned from a microfinance institution to a commercial bank last year.
“We applied immediately after launching the Bank,” said Taddese. “Design plans will be revised after the plot is acquired.”
PUBLISHED ON Dec 09,2023 [ VOL 24 , NO 1232]
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