Sponsored Contents | Jan 17,2022
Jul 30 , 2022
By BERSABEH GEBRE ( FORTUNE STAFF WRITER )
The Addis Abeba City Administration cabinet has reduced interest on the annual lease payment rates for plots leased for residential and investment purposes.
The 45-member cabinet chaired by Mayor Adanech Abiebie decided to apply interest on the annual instalments instead of the lease payment arrangement, which imposed interest on the remaining balance. The decision comes after city experts conducted a study to assess the effect and viability of the new lease payment arrangement, according to Biniam Mikiru, head of cabinet affairs.
The Administration collected 4.3 billion Br from lease payments, including interest, in the concluded fiscal year. The revenue was a 7.5pc jump compared with last year.
Regional states and city municipalities interpret a law passed in 2011 governing urban land lease holding differently. Advance payments should be 10pc of the value of the lease, with the balance paid in annual instalments. Interests must be paid on the remaining balance. The phrase “remaining payment” has created confusion among regional states and city administrators.
The Addis Abeba City Administration officials have been interpreting the phrase as the residual balance after the down payment. Regional administrations such as Oromia, Tigray, and Southern states interpret the phrase as annual payments and apply interest on the yearly instalments.
Abubeker Mohammed, lecturer of land administration at Ambo University, says the previous interpretation of the law has discouraged investments and put pressure on the low-income segment of the population.
“Investors were required to pay 10pc of the lease amount upfront in addition to resuming construction within 18 months,” he said. “This has discouraged many developers from investing in the city.”
A month ago, the city’s cabinet instructed the Addis Abeba Land Development & Management Bureau to adjust.
Desta Mergia, director of land transfer and administration, confirmed his office received the cabinet’s decision. However, the Bureau awaits detailed instructions on how to apply the new payment arrangement.
“We’ll proceed as soon as we receive documents that explain the decision in detail,” said Desta.
Last year, the cabinet took similar measures to a little more than 33,000 housing properties built on unlawfully occupied land. City administrations have the authority to adjust the payment modalities to ensure low-income families have access to leased land at affordable prices. In 2010, the city administration granted entitlement to 60,000 households occupying undocumented plots acquired before 1996. Four years later, the Administration started processing the title deeds of undocumented homesteads. By 2017, half of them had completed the registration after paying a down payment of 10pc of the lease value.
“The administration implemented the new lease payment arrangement on the undocumented properties,” Biniam told Fortune. “It was an issue that required an urgent response.”
Many homesteads that occupied land illegally pay the annual instalments based on the new payment modality, according to Abubeker Mussa, land management and transfer officer in the Akaki-Qality District.
However, property owners argue that the new payment system should be applied to the original lease price instead of the outstanding balance.
“We’ve asked the Bureau for further clarification on the matter,” said Abubaker.
PUBLISHED ON Jul 30,2022 [ VOL 23 , NO 1161]
Sponsored Contents | Jan 17,2022
Fortune News | Jul 27,2019
Fortune News | Nov 21,2018
Fortune News | Oct 30,2022
Fortune News | Nov 19,2022
Fortune News | Jul 06,2019
Commentaries | Feb 04,2023
Fortune News | Apr 26,2019
Radar | Sep 14,2019
Radar | Oct 24,2020
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
The average debt ratio in sub-Saharan Africa has almost doubled in just a decade - fr...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Sep 30 , 2023
The recent gathering by the leadership - and the rank and file - of the Prosperity Pa...
Sep 23 , 2023
Ethiopia's contemporary political leaders and the policy wonks under their command ha...
Sep 16 , 2023
The Ethiopian economic narrative oscillates between pockets of resilience and signifi...
Sep 10 , 2023
Earlier this Ethiopian fiscal year, the heralding of a peace deal became synonymous w...
In a world where resilience and love are often tried and tested, Salem Getachew's (MD) luminous spirit stands as a testament to the enduring...
It is fascinating to witness the power of technology in bridging the gap between individuals. However, I can not help but wonder if the surg...
Or see contact page