BizCLIR

Diagnostics such as this one typically involve a considerable amount of investigative research – interviews, literature searches, and fieldwork – designed to unearth the many invisible or opaque problems that affect a given sector in a given location. With regard to land tenure and its effect on the enabling environment for agricultural production and processing in Ghana, this is demonstrably not the case. In terms of literature alone, the weight of publications addressing land tenure in Ghana is crushing: it is not unusual for land tenure studies to feature bibliographies that consume 10% of their total mass. In dealing with such issues, the challenge is less one of investigating whether the problem exists, and more that of distilling the issue down to its essential components, assessing any adverse impact on the ability of the agribusiness sector to operate efficiently, and identifying actual and potential reforms that may mitigate this impact.

 

In Ghana, the fundamental problem with land tenure is that it straddles two vastly different pillars of law and practice. On the one hand, there is the statutory regime of the government of Ghana, codified in the Constitution of 1992 and supported by an extensive body of law and regulations dealing with the ownership and use of land. On the other hand, there is a complex customary regime governing the assignment of tribal lands (generally referred to as “stool lands” in the south and “skin lands” in the north) based on centuries of oral tradition and practice, varying by location, chiefdoms, and systems of lineal succession.[1]

 

Since tribal lands are estimated to account for as much as 80% of the land surface of Ghana, this customary regime, and the imperfect fit between its regulations and those of the national government, exerts a powerful effect on the allocation and use of land nationwide. There has never been close coordination between these autonomous land administration systems, and title – especially for lands allocated under the customary system – has never been recorded for the vast majority of the lands in Ghana. As a result, multiple claims on the same piece of property are the rule rather than the exception, and the courts have become, to a considerable degree, overwhelmed by land title disputes. According to one government source, “Land administration is bedeviled by the multiple sale of land by different parties claiming ownership of the same parcel of land, the poor use of compulsory acquisition powers of government agencies to acquire various tracts of land for which they are unable to pay compensation, weak management, both public and customary and, quite recently, the menace of land guards. As of July 2004, there were about 66,000 land disputes before the courts, resulting from the inability of traditional or customary authorities to identify the extent of land boundaries.”[2]

 

Concern about the compatibility between Ghana’s customary land tenure system and agricultural development is, in fact, nothing new, as explained by another source:

 

At its first meeting in 1889, a Commission of Economic Agriculture in the Gold Coast noted that the nature of property in land and the pattern of land use were among the factors hindering the extension of commodity agriculture in the Gold Coast. They singled out for particular criticism the existing juridical forms of land relations, particularly the apparent inability of individuals to acquire indefeasible property in land, and shifting cultivation, which they condemned as “backward and practiced only by the most backward tribes.”[3]

 

Questions persist 120 years later as to the effect of this plural system on investment, particularly foreign investment, in Ghana’s agricultural sector. In the opinion of some, land acquisition, ownership, and management of land relations constitute some of the biggest challenges to progress on Ghana’s development agenda. Land disputes are rampant throughout the country, and land disputes are estimated to represent 50% of all court cases filed nationally.[4]

 

In the midst of these questions, it would be easy to lose sight of the fact that investment – both foreign and domestic -- in Ghanaian agriculture and agribusiness continues to take place. For example, Cargill is building a state-of-the-art cocoa processing facility to produce cocoa liquor, butter, and powder; the facility will be located in the port of Tema and will process 60,000 tons initially, with the potential to expand to 120,000 tons. Archer Daniels Midland has a similar plant under construction in Kumasi. In recent years Ghana Nut, Integrated Tamale Fruit Company, and Golden Exotics have all initiated agribusinesses and constructed facilities in the horticultural sector. The Millennium Development Agency, with funding from the U.S. Millennium Challenge Corporation, will deploy a significant portion of its $547 million budget for its Agriculture Project, including loans and grants to commercial farmers and FBOs for the improvement of post-harvest handling and value chain services.[5] All these investments have a significant land component; in most cases, this has involved stool or skin lands.

During interviews with owners and managers of these companies, a consistent message emerged: the process of securing land for agribusiness purposes is slow and complicated, and challenges are commonplace, but such problems are generally manageable. Even in the case of ventures that could not be brought to fruition, land tenure constraints were not deemed to have played a determining role. In accounts of the foreign fruit company seeking to trade in Ghananian bananas, discussed in this report’s chapter on Starting a Business, the issue of land tenure was not mentioned as a critical factor in its ultimate decision to invest elsewhere in Africa.

Based on the evidence at hand, then, it appears that the land tenure issue constitutes a disincentive to orderly development, and is vulnerable to challenges in both the judicial and customary settings. At the same time, experience indicates that the risks associated with land insecurity, while problematic, are generally considered to be manageable by companies that confront them.

 

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