23 November 2020 Written by  ANIEL W/GEBRIEL & MELKAMU BELACHEW






Understanding the Ethiopian land tenure system is important to student of land law for it gives students general historical and factual ideas about the land holding system in the country. The Ethiopian land tenure system is also the concern of history, sociology, agriculture, and economics and as a result different writers from all these disciplines have written a lot of materials. In here we shall briefly discuss the types of land holding system in three broad historical periods and the content of the laws used for such systems: before the 1974 revolution, during the Derg Era, and the present system. The pre-evolution period is treated in one section because the land tenure system was basically the same for long period. Only the coming of the revolution fundamentally changed the millennia based land holding system.



After finishing the study of this chapter, you will able to:

  • Understand the concepts of Rist and Gult two tenure concepts of the pre 1974 era

  • Know the land tenure system before the revolution

  • Comprehend the implication of the revolutionary time land tenure laws

  • Appreciate the stand of the FDRE constitution regarding the land holding system


Before the 1974 Revolution

Northern Ethiopia


Ethiopia was governed by kings and emperors for over two thousand years. The land holding system was generally a customary one in that there are no written laws which govern the holding system. A historical review of the land holding system of the feudalistic Ethiopia reveals that all land was owned by the king. Other private people, family or the church derived their claim to the land from imperial land grants, otherwise known a gults. Hence, land was predominantly owned or possessed by a few landlords, the Church, and sometimes individuals, especially in the north.


Based on historical and political factors, the land tenure system in the northern and southern parts of the country were different. In the north, from time immemorial land had been owned based on a lineage system. This land once entered in to the hand of individuals by way of grant, or inheritance etc continues to remain within the family. This was called rist. It signified the usufructuary rights enjoyed under the kinship system. All land so held was considered to be held by hereditary right, because the holder was ipso facto a descendant of the ancestral first holder. In the north, thanks to this kind of land-holding system, a peasant could claim a plot of land as long as he could trace his descent. Hence, individual’s rights over rist-land holding were decided essentially on the bases of his or her membership to the lineage. These rights, as described by Markakis, “were inherent and hereditary, which could neither be abridged nor abrogated under different pretexts, such as absence of an individual from the locality.” The same social customs prohibited an individual from alienating or selling the land. The holder of the rist land, called ristgna, had unchallengeable control, use and inheritance rights over his or her possession. When a person died, his/her land was divided equally among all his/her children regardless of sex or birth order. Some argue that the use-right was secured in the sense that political authorities, including the Emperor, or landlords were refrained from interventions. As a result, “there was less tenure insecurity or fear of being evicted from the rist land.”


As discussed above gult lands were lands derived by imperial grants and unlike rist lands, which were not subject to sale and exchange, gult lands were sold and donated freely. Donald Crummey, in his book, Land and Society in the Christian kingdom of Ethiopia, has recorded the sale, inheritance, and donation of gult land especially during the Gonderian period of the 16th and 17th century of Ethiopia.


The land grant condition reached its apex during the twentieth century. During Menelik’s period, the emperor had been giving a vast amount of gult land to the ruling elite as a reward for loyal service to the régime, and to religious institutions as endowments. The individual or institution that held such land had the right to collect taxes from those who farmed it, and also exercised judicial and administrative authority over those who lived on it. Thus, a single estate of gult land, comprising perhaps one or two square miles, often included within its boundaries strip-fields, held as rist by scores (50-150) of farmers.


Southern Ethiopia

The pattern of land allocation in the southern territories incorporated into the empire by Emperor Menelik II, differed in important ways from the pattern in the north. The gult system was introduced in the southern part of the country in the 19th century, following Menelik’s expansion to the region. From the 1870’s under Menelik to the 1970’s under Haileselassie, the crown alienated land which was occupied by local tribes in common. It was distributed to members of the imperial family, the clergy, members of the nobility, Menelik’s generals, soldiers, and local agents of the state. Unlike the condition in the north, here most of the land was occupied not by peasants, but by the people of the upper ruling class. These people, by means of land grants, became absolute land owners. This kind of land ownership system was called gult. Peasants on such land became tenants (gabar) of the grantee and paid rent in addition to the usual taxes and fees. As explained by J:M Cohen: “those who received government land grant need not farm it themselves but could rent it under quite profitable arrangements to tenant farmers or lease it out to large-scale mechanized producers.” After the Second World War and the expulsion of the Italian forces from Ethiopia, Emperor Haileselassie also continued this process. According to one study conducted by Gebru Mersha and et.al, of the nearly 5 million hectares allotted after 1941, only a few thousands reached the landless and the unemployed. 


In the south, land measurement and property registration for tax purposes was introduced. This promoted private ownership and land sale. In northern Ethiopia, traditional land tenure had had a communal character, with peasants enjoying only usufructuary rights over the land rist land. In the southern part, especially, in the twentieth century, the steady process of privatization set in, with its implication of sale and mortgage. Some land lords even forced their peasants to buy the land. The historian Bahiru Zewde observes:


The privatization process had a number of consequences. At the conceptual level, it was attended with changes in the connotation of some important terms. Rist, in origin of the usufructuary rights enjoyed under the kinship system, now denoted absolute private property. Likewise, the term gabar lost its exploitive associations and assumed the more respectable connotation of taxpayer. Absolute private ownership rights to land above all entailed unrestricted freedom to dispose of it, most significantly through sale.


This process was not without negative impact to the indigenous society, however. The renowned sociologist and expert on Ethiopian tenure system, Markakis, has concluded that the effects of the land grants and alienation were “eviction of a large number of peasants, the spread of tenancy, and emergence of absentee landlordism.” Generally speaking, private tenure was recognized as the most dominant system during the final days of the Imperial regime, affecting some 60 percent of peasants and 65 percent of the country’s population. Under this system, land was sold and exchanged; however, given that all the land was originally state property and that private holders had no absolute rights, this was different from the general concept of a freehold system. Serious land concentration, exploitative tenancy and insecurity have characterized the private tenure system.


Additional Reading on the institutions of gult and rist

The concepts of the institutions of gult and rist are too complex as they are differently applied in different part of the country. Even scholars give different pictures as described in the following. Additional reading is hereby provided from Habtamu Mengistie(2004) Lord, Zega and Peasant: A study of property and agrarian relations in Rural Eastern Gojam. Forum for Social Studies, Addis Ababa University, pp.7-10.


The nature of rest and gult rights are fully encompassed by the definition that Hoben gives to the terms in his widely read book (Land Tenure among the Amhara of Ethiopia: The dynamics of the cognatic descent, Chicago/London, 1973). Hoben writes that gult rights entail “fief-holding rights” whereas rest rights confer “land-use rights.” He adds that “[i]n its most general sense, rist refers to the right a person has to a share of the land first held by any of his or her ancestors in any line of descent.” According to Hoben, rest refers to the theoretically inalienable and inheritable land right of peasants. The peasant had the right to claim rest land through both the paternal and maternal lines. The individual rest holder could have only a usufractary title because the ultimate title to the land lays in the “descent corporation” or the lineage. This evokes the view that under such system of land tenure no right of alienation by individuals could exist. This implies that the rest system of land holding has a communal character because of the undifferentiated complex of rights. What all this means is that many individuals could have concurrent and miscellaneous rights over piece of land.


For Hoben , gult confers material advantages to and forms the basis of political power for the elite. It also plays a useful role in the administration of land and the people occupying it. The bundle of rights which the state transfers to the balägult could include adjudication, governship, and the right to collect tribute. Taddese Tamirat also shares essentially the same view with Hoben as regards the role of gult in the administration of the country and adds that it was equally significant in military mobilization. The bälägult simply enjoyed the right to tribute in the form of part of the annual produce from the land. However, they could not claim tributes as owners. Hoben writes that both rest and gult rights extended over the same land they complemented each other as such: “it is of fundamental importance to remember that rist and gult are not different types of land but distinct and complementary types of land rights.” Thus the exact scope of right of bälägult and resängä is some what blurred or overlapping. These assertions by Hoben regarding the nature of rights of rest and gult have almost attained the status of the basic principles and have become “established” points of departure for analysis of class relationships and the land tenure system. Some difference of detail notwithstanding, this view shared by a number of scholars, including Donald Crummey.


Crummey argues that in regions where the rist system predominated, gult was the tribute right exercised by the non-farming elite, and that the bälaägult, in his capacity as pure tax and tribute collector, had absolutely nothing to do with the production process and with the land. He asserts, like Hoben, that the ristägnä had mastery over the means of production and enjoyed absolute autonomy of production.…Without abandoning the view that gult was essentially a tribute right Crummey  further argues that tribute rights had acquired a character of property, being transferred by sale or otherwise without necessarily involving the state. In other words, the individuals at the receiving end of the buying an the selling process could accumulate tribute rights over large amounts of property. Tribute rights were thus exchanged, negotiated, fought over, etc. The selling and buying of tribute rights over land (i.e gult) provides additional evidence to the argument that gult was given and taken away only by the kings was incorrect, and that the gult holders exercised the right of transfer without necessarily obtaining permission or sanction of the kings.


Defining and delimiting the meanings and scope of gult and rist rights,  Merid (Merid Wolde Aregay. “Land Tenure and Agriculture Productivity, 1500-1855”, Proceedings of the Third Annual Seminar of the Development of History. Addis Ababa, 1986) writes that gult “has never been a form of land tenure”; it was, he says, only “a system of defraying remuneration for services out of taxes and tributes which could have been collected in kind. Gult rights only conferred partial usufruct rights.” He goes on to state that even rist rights did not allow “absolute ownership rights on the individual. It has done so on the lineage or descent group only.” According to Merid, though the individual members of the descent group enjoyed perpetuity of tenure they could not have an absolute interest in an allotted portion of the descent property in land. The justification for the inalienability of rist land, according to Merid, was the desire to preserve it for the needs of the present and unborn individuals in the line of descent; in his words rist could not be alienated “because it belonged to the living and the yet unborn.” One could, of course, give out his or her land on terms of tenancy. Merid adds a few other points to his description of the rist system: one is that membership in rist owning group could be obtained or acquired only through birth. The second is that there was no big private or individual ownership of land because of the workings of rist system of land. Because of the rist system big holdings of landed property soon melted away. The third point is that the most important and overriding interest of the village community and the lineage was to achieve solidarity. He writes in this connection that “throughout history community solidarity and the rist system have been reinforced and preserving each other. Individualism would have no place in the society.” The rist system also created conditions for excessive litigation and invariably acrimonious relationships among members of the descent groups.


At this point it will be apposite to mention the work of a scholar who represents a dissenting opinion on some of the issues from the established scholarship. Shiferaw Bekele, in a work that surveys the literature on land tenure (Shiferaw Bekele. “The Evolution of Land Tenure in the Imperial Era”, Shiferaw Bekele (ed.) An Economic History of Modern Ethiopia 1941-74. Dakar: Codesria, 1995 ), has convincingly showed the inadequacy of existing interpretations of the principle of land holding. For Shiferaw, gult implies more than merely administrative control over land. He argues that scholars have all too often confused gult holdings as simply administrators by claiming the gult entails a right over tribute. In actual fact, when it was granting that gult the state was transferring land to the full ownership of the grantee. It thus involves a propritory right in land. He points out that although there are difference in certain peculiar details from place to place, there was a large measure of commonality in the basic principles and concepts pertaining to land ownership in Ethiopia. This was so particularly from the Gondärine period through early twentieth century Ethiopia. Shiferaw concludes that “…in the Gonderine era, what was granted was the land rather than tribute only.” Unlike many scholars, he argues that the land so given by way of gult did not remain in the property of the original cultivators or ristägnä. There was no concurrent right of a miscellaneous character over land since it was individually or privately owned and the right of the bälägult and risrägnä were very clearly differentiated.


By way of summary, it can be said that although there were different practices in the country the basic point is that gult was a grant of land to individuals and the church for some service rendered to the king. The gult land usually encompasses of large area of land and balagult prefers to put tenants on the land, through time become restägnä. The gultägnä on the other hand has the right to be an administrator, tax collector and adjudicator over the people in his gult land. Rist system is on the other hand a system which may be acquired either by royal grant to individual person and the land continues to be cultivated by is descents, or  by being ristägnä or tenant in some bälägult’s land and continue to benefit on the land.


Urban Land Tenure


Modern urbanization in Ethiopia started with establishment of the capital of Addis Ababa, a third most important capital city in Ethiopia after Axum and Gonder, during the Minelik era. The earliest settlements in the city developed haphazardly around the king’s palace and the residences of his generals and other dignitaries. The emperor granted large tracts of land to the nobility, important personalities of the state, the church, and foreign legations. This land holding system was perpetuated for long time, and as a result, although most land areas in urban areas were private property, most of it was owned by few landlords. As stipulated in the proclamation 47/1975, at that time extensive area of urban land and numerous houses were in the hands of an insignificant number of individual land lords, aristocrats, and high government officials.


The land mark legislation that recognizes private ownership of urban land was decreed in 1907 with 32 articles. The decree allowed Ethiopians and foreigners to purchase and own private land. However, government was allowed to take back the land holding for public interest purpose against payment of compensation.


During the reign of Haileselassie, private ownership of urban land was reemphasized by the subsequent Constitutions of the 1931 and 1955 as well as the 1960 civil code. All recognize the private ownership right of land in urban areas. Up to the coming of the 1974 Ethiopian Revolution land lords in different urban areas invest much in the development of housing for rental. 


The Civil Code


The civil code was introduced in 1960, and enshrined the prevailing pattern of an almost unlimited exploitation of land by the owners (Art.1205). It attempts to regulate under articles 1489 and the following “agricultural communities”-presumably rist, desa, and nomadic tenures-and agrarian tenancies, but made few changes in the traditional arrangements, and was largely ignored. In other words, although the code in principle recognizes private ownership of farm lands, the government had not taken practical measures to attain this goal, such as reforming the land holding system so that poor tenant farmers should get their own private land. It is said that there had been strong resistance for land reform from the landed parliament members. The provisions dealing with tenancies relied upon a freedom of contract which, given gross inequalities in property inequalities in property distribution and bargaining position, could only be exercised by landlords. If the parties were aware of these provisions and if they wanted them to govern their relationship, feudal or patron-client tenure relations could have continued under the guise of neutral facilitative law. Under article 2991 of the code, for example, the large maximum for rents paid in kind was three-fourths of the crop, while the traditional rental was half. Besides to the civil code there were attempts by the government to legislate laws regarding the rural lands.


Paul Brietzke, in his article, Land Reform in Revolutionary Ethiopia, concludes: “traditional tenures remained largely unaffected by the laws enacted, with great fanfare, from 1944 to 1974. Government investment in land reform, in terms of monetary and legal resources, were minimal, and legal maneuvers, far from promoting rural change, seemed to solidify further peasant suspicions of government intentions. As a result, rural people continued to rely on traditional land laws.”


During the Derg Regime


In 1975, the military council, Derg, comprised of representatives of the different armed forces in the country, became successful in ousting the Imperial regime from power. As mentioned above the Emperor was criticized for the failure to implement a land reform. The Derg hence come with the slogan “land to the tiller”. Following its assumption of power, the Derg had undertaken fundamental changes to the Ethiopian socio-economic and political arrangements. Among the many radical measures, the land reform proclamation of February 1975 was said to be the predominant one. Cited as Proclamation No. 31 of 1975, it was a proclamation providing for the “public ownership of rural lands” and generated a great deal of support for the regime, especially from the peasantry population. This is because the land had in essence been given to the tiller. All tenants or hired labourers had acquired possessory rights over the land they tilled. At one stroke, the law abolished all forms of landlordism and tenant-ship, and thereby liberated tenants from any kind of serfdom or payments of rent or debt to the previous land owner (article 6(3)).


This proclamation transferred all land privately owned by landlords, peasants, organizations, the church, and so on to public ownership and prohibited all forms of private ownership henceforth. Large scale farms operated by private individuals or organizations had been either distributed to peasants or transferred to the ownership of the state (art.7). The law also denied any form of compensation for the land and any forests and tree-crops thereon, while providing that fair compensation should be paid for movable properties and permanent works on the land.(Art.3) It should be noted that peasants had only usufruct rights over the land. The law specifically prohibited transfer of land by way of sale, exchange, succession, mortgage, antichresis, lease or otherwise, except that inheritance was possible for one’s spouse, minor children and sometimes children who had attained majority.(Article 5)


Since the fundamental tenet of the proclamation was the equalization of land holdings among the rural peasants and “transformed rural Ethiopia into a society of self-labouring peasants,” it was stated that each farming family should be allotted with 10 hectares of land and any kind of hired labour should be prohibited, except under few circumstances. For example, Article 4 (5) of the proclamation states that this rule did not apply to a woman with no other adequate means of livelihood or where the holder dies, is sick, or old, to the wife or the husband or to his or her children who have not attained majority.


In June, of the same year, the government enacted a new law for the nationalization of urban land and extra rentable houses (proclamation No. 41/75). Accordingly, all urban lands and extra houses of the wealthy urban dwellers were confiscated without any compensation. By extra houses are meant all those dwelling units on which an owner had drawn some amount of rental income prior to the date on which the proclamation was issued regardless of size or amount of monthly rent. The proclamation placed under kebele administration all those units that were rented for 100 Birr or less per month and gave the custody of all those units that had monthly rent of more than 100 Birr to the Agency for the Administration of Rental Housing (AARH).

The policy objectives of the proclamation were mainly two:

    1. to provide the broad urban dweller with credit facilities and urban lands for the construction of dwelling and business houses

    2. to appropriately allocate disproportionately held wealth and income as well as the inequitable provision of services among other dwellers.

Concerning urban land, as stated above, the proclamation put all land in the hand of the state. No urban land was to be transferred by sale, antichresis, mortgage, succession, or otherwise (Art. 4(1).) a person requiring land for the purpose of building a dwelling house was to be granted free of charge up to 500m2  in accordance with the directive of the ministry of public works and Housing (Art. 5(1).) 


The proclamation also allowed ownership of only a single dwelling house (Art. 11(1).)  the transfer of private houses by succession, sale and barter was permitted (Art. 12(1).) All extra houses became government property and no person, family and organization was allowed to obtain income from urban land or house (Art. 20(1).) 



The general picture was that the previous landlord was replaced by the state, the latter with even much power to intervene. In urban areas the law prohibited further private investments in housing investments which resulted in acute shortage of houses in urban areas. Concerning rural land, even though at first the land reform was successful, series land distributions and erroneous state policies led to the insecurity of holdings, and thereby gave little incentive for the peasant to invest in his holdings. Some argue that the redistribution of land was neither remarkable compared to the land distribution in Latin America, nor was it equitable. Dessalegn Rahmato, on his part, concluded that the end product of the land reform was that it failed where it succeeded. As a result, the history of Ethiopia during the Derg regime has been partly recorded as a history of growing rural poverty, food shortages, famine, and escalated rural insurgency and civil war.


2.3 Existing Property System

2.3.1 Land Policy

The present government came to power after it ousted the previous military government in May, 1991. It was hoped that it would introduce some major changes in the land holding system. When the present constitution came into the picture in 1995, however, it was confirmed that no major changes were to be made to the previous land tenure system. There are no fundamental differences between the legal framework of the Derg and the present government on rural land issues. In practical terms, there are more similarities in land administration between the two regimes than differences.


Even though the new government adopted a free market economic policy, it has decided to maintain all rural and urban land under public ownership. According to the 1995 Federal Democratic Republic of Ethiopia (FDRE) Constitution, all urban and rural land is the property of the state and the Ethiopian people. As one writer (Gebresellasie) says: “by inserting the land policy in the constitution, the current government has effectively eliminated the possibility of flexible application of policy.” The argument forwarded by the ruling party for the continuation of land as public/state property rests solely on the issue of security. In particular, it has been said that private ownership of rural land would lead to massive eviction or migration of the farming population, as poor farmers are forced to sell their plots to unscrupulous urban speculators, particularly during periods of hardship. Some studies show otherwise, however. The economist Berhanu Nega and et.al conclude that farmers would not sell their land wholly or partially if given the right to own their plots. Another study, conducted by the World Bank, reveals that most farmers would rather rent their land during stressful periods compared with any other alternative, such as selling it. In other words, in addition to all the other benefits of rental markets suggested in the literature, the availability of formal land rental markets will serve as a caution to enable farmers to withstand unfavorable circumstances by temporarily renting their land rather than selling it.


The usual argument against the state/public ownership of land is an opposite argument to the argument given by the state, which is lack of security. Government critics on land policy argue that absence of tenure security for land users provides little or no incentive to improve land productivity through investment in long-term land improvement measures. It may aggravate land degradation through soil mining and problems of common resource use. The fear of the critics and supporters of private ownership of land is, among other things, that government may use land as political weapon by giving and taking it away as the case may be. However, supporters of the public ownership of land reject such fears as groundless; on the contrary claim that government provides more security as is now taken by regional governments. A good example is the land registration and certification processes which are being conducted in Tigray, Amhara, Oromiya, and the Southern regions which enable farmers to have a land certificate for their holdings. This gives protection and security to the holder.


Land Legislations


1. Constitution


Article 40 of the Federal Constitution, which relates to “Right to Property,” provides:


The right to ownership of rural and urban land, as well as of all natural resources, is exclusively vested in the State and in the peoples of Ethiopia. Land is a common property of the Nations, Nationalities and Peoples of Ethiopia and shall not be subject to sale or to other means of exchange. (Sub-Article 3).


Regarding its means of acquisition, sub-article 4 states that Ethiopian peasants have right to obtain land without payment and the protection against eviction from their possession. Likewise, concerning the pastoralists of the lowland areas, sub-article 5 declares that Ethiopian pastoralists have the right to free land for grazing and cultivation as well as the right not to be displaced from their possession. The Constitution has also shown the way to acquire land by private individuals. Sub-article 6 of the same provision stipulates:


Without prejudice to the right of Ethiopian Nations, Nationalities, and Peoples to the ownership of land, government shall ensure the right of private investors to the use of land on the basis of payment arrangements established by law.


Other important provisions concerning the security and rights of land-holders are provided under sub-articles 7 and 8 of the same provision. Sub-article 7 declares that every Ethiopian shall have the full right to the immovable property he builds and to the permanent improvements he brings about on the land by his labour or capital. This right shall include the right to alienate, to bequeath, and, where the right of use expires, to remove his property, transfer his title, or claim compensation for it. The right to land is also secured in that the state has the duty to pay compensation during expropriation. Sub-article 8, which is related to expropriation, states:


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.

The power to enact laws for the utilization and conservation of land and other natural resources in the country is exclusively given to the Federal Government (Art. 51(5) of the Constitution)  Regional governments have the duty to administer land and other natural resources according to federal laws.(Art. 52(2)(d))of the Constitution). The first law of this nature was enacted in July of 1997 and was titled “Rural Land Administration Proclamation, No. 89/1997.” This law has, however, been repealed and replaced by the more recent Proclamation No. 456/2005, otherwise known as ‘‘Rural Land Administration and Land Use Proclamation’’. Likewise, based on such Federal Rural Land Use Proclamations Regional states (Tigray, Amhara, Oromia, and SNNPR) ensue to adopt similar rural land laws.


2. FDRE Proclamation NO. 456/2005


As stated above, this law is entitled as “Federal Democratic Republic of Ethiopia Rural Land Administration and Land Use Proclamation.” It was adopted in July, 2005. It replaces its predecessor, Proclamation No. 89/1997. The scope of application of this law is throughout the country, as envisaged under Article 4 of the proclamation. Regional governments are given the power to enact rural land administration and land use laws, which consists of the detailed provisions necessary to implement this proclamation. (Article 17(1))

Reemphasizing Article 40 of the Federal Constitution, the proclamation states: “peasant farmers/pastoralists engaged in agriculture for a living shall be given rural land free of charge.”(Art.5(1)(a). Any person who is a family member of a peasant farmer, semi pastoralist or pastoralist having the right to use rural land may obtain rural land from his family by donation, inheritance or from the competent authority.(Art.5(2)). Thus, the means of acquisition of rural land is either through family inheritance or donation, or through government provision. Since land is owned by the State and the people, peasants’ title to the land is only of a usufractury nature. In the proclamation this kind of use-right is termed as ‘‘holding-right’’. Article 2(4) defines ‘‘holding right’’ in the following manner:

The right of any peasant farmer or semi-pastoralist and pastoralist to use rural land for purpose of agriculture and natural resources development, lease and bequeath to members of his family or other lawful heirs, and includes the right to acquire property produced on his land thereon by his labour or capital and to sale, exchange and bequeath same.

Hence, the law permits holders to use, lease, and bequeath (transfer to family members by way of inheritance or donation) their holding rights. Similarly, Article 8 of the same proclamation which deals with “transfer of rural land use rights” stipulates in detail the possibilities of leasing holding rights in part to investors, or jointly develop the land with investors. Surprisingly Article 8 (4) says that an investor who has leased rural land may present his use right as collateral. So, if there is someone who is willing to lend money to the investor securing his use right emanating from the lease agreement, then it is possible to hold it as mortgage collateral. The law does not, however, yet allow mortgage of the land by the holder of the right himself or by a fellow farmer who rented the land. The same also applies to sale of such land. One more limitation is that transfer of holding-rights, by way of inheritance or donation, is only applicable to family members. A family member is identified here in a different manner from that of the Federal Family Code. The proclamation defines a “family member” as “any person who permanently lives with the holder of holding rights sharing the livelihood of the later.” (Art. 2(5)). Thus, unlike the Family Codes, in which blood and marital ties are important elements to identify a family member, under the Federal Rural Land Proclamation, living under same roof and sharing the same livelihood with the holder of the right are sufficient conditions. As a result, a hired labourer who has been living for years with the farmer or a maid servant, who likewise lives with the family, may be eligible to inherit the holding rights.

Another important provision of the proclamation related to property rights is Article 7 that deals with the duration of use right. According to article 7 (1), “the rural land use right of peasant farmers, semi-pastoralists and pastoralists shall have no time limit.” This reminds us of the freehold land system of the United Kingdom where all land is symbolically owned by the Crown and the later grants rights to individuals. The essence of the freehold estate in the UK is that it defines the length of time for which the right to the land will last. The two forms of freehold estates existing today are the “life estate” and the “fee simple”. A life estate gives a right to the land for the life of the holder; whereas, a fee simple is a right capable of lasting indefinitely and which will pass on death of the holder by will or through intestacy.

From duration point of view, the Ethiopian land holding system is similar to the fee simple, in that both rights are given for an indefinite period of time. The fee simple continues notwithstanding the death of the grantee (holder of right), and notwithstanding the absence of a will, as there are rules that enable the property to pass intestate to the nearest relative. If there are no relatives within the prescribed classes, then the property will go to the Crown. Likewise, Proclamation No. 456/2005 gives a perpetual right to the right holder. Upon his/her death, the right will transfer to heirs by law, who are family members. Here one difference between the two is that in the case of fee simple the grantee/holder can transfer/inherit it by will to whomsoever he wishes it to have. But in the Ethiopian case, inheritance or donation is possible only to family members. It seems testate (inheritance by leaving a will) is void if the beneficiary is not a family member.

If the “holders are deceased and have no heirs or are gone for settlement or left the locality on their own wish….the land shall be distributed to peasants…who have no land and who have land shortage” (Art. 9(1). Under both systems, if there is no legitimate heir, the land will devolve back to the state. See also article 852 of the civil code 


3. Lease Proclamation No. 272/2002


The other kind of land holding system, which prevails in urban areas of the country, is the lease system. For the last 18 years, leases have been in place as the cardinal landholding system for the transfer of urban land to users, to the extent possible and in accordance with Master Plans. Pursuant to Article 4 of the Lease proclamation, an urban land can be permitted to be held by lease:


  1. In conformity with plan guidelines where such a plan exists, or, where it does not exist, in conformity with the law which Region or City government makes, as the case maybe, and

  2. On auction or through negotiation; or

  3. According to the decision of Region or City government.


The main point is that unlike rural farmers and pastoralists, urban dwellers are not entitled to get land for free. In reality and when municipalities have regulations, under exceptional circumstances, however, when people organize and create an association for the development of residential housing, and when the city municipality considers it as an incentive for the development and expansion of urban areas, land may be granted for free. Moreover, in small towns where the lease law is not operational land may be given free of charge. 


Based on the urban development and type or sector of development, the law provides different time limits for the contract of a lease. Hence, for example, the law sets for any town a maximum ceiling period of time of:


  1. up to 99 years for: housing (personal and leasable), scientific, technological study and research facilities, government offices, non-profit- making philanthropist organizations, and religious institutions;

  2. up to 15 years for urban agriculture;

  3. as per government agreement, for diplomatic missions and international organizations.


For the city of Addis Ababa, 60 and 50 years have been set for industry and commerce, respectively. In other cities and towns, not designated as of the grade of Addis Ababa, 80 and 70 years are stipulated for the above mentioned activities, respectively (Art. 6(1). This holding right, emanating from the lease agreement, may be terminated because of termination of contractual period or because of the need to appropriate the land for public interest, among other reasons.




The Ethiopian tenure or land holding system as classified in the three historical period is generally shows the policies of the different regimes. The feudalistic Ethiopia was controlled by feudal lords and the land holding system was basically arranged in such away that benefits the feudal lords, not the peasant or urban dwellers. During the imperial eras the notion of private ownership of land was in principle introduced, but was not really enforced for traditional tenure system was more dominant one.  The motto of the Revolution “land to the tiller” was practically applied during the Derg era. And yet the proclamations have taken away the hope of private ownership of land for once and for all. Hence, farmers were given only the use right. The FDRE constitution and following land laws broaden this use right and allowed those rights of inheritance, lease, and donation which were prohibited by the Derg proclamation. The common element of both the Derg and FDRE land policies is however important one which denies individual people from owning and there by having the sole right of exchanging and selling land.


Additional readings

Although the most basic form of property consists of rights in land, some nations do not recognize this form of property. Ethiopia is one of these nations. In the following an attempt is made to show relevant provisions of the states of Vietnam and Saudi Arabia.


Civil Code of Vietnam

Article 205: The land, mountains and forests, rivers and lakes, water resources under ground, resources from the sea, continental shelf and airspace, and the capital and property invested by the State in enterprises and facilities in the branches and fields of economy, culture, social welfare, science, technology, foreign affairs, and national defence and security, and other property stipulated by law to be of the State, come under ownership of the entire people…


Article 221: Legitimate  income, savings, residential houses, means of daily life, means of production, capital, fruit, and other legitimate properties of an individual are privately owned properties.


Basic Law of Government, Kingdom of Saudi Arabia

Article 14: All God’s bestowed wealth, be it under the ground, on the surface or in national territorial waters, in the land or maritime domain under the state’s control, are the property of the state as defined by law….



Additional Reading on debate of the State vs. Private ownership of land

Economists, politicians and social scientists provide arguments pro and against the current state ownership of land. Defenders of private ownership of land argue that it promotes individual liberty, political stability, and economic prosperity. Following is an exemplary and summarized analysis taken from the writing of the publication of the Ethiopian Economic Association /Ethiopian Economic Policy Research Institute (EEA/EEPRI), Land Tenure and Agricultural Development in Ethiopia, 2002. pp. 28-29.


The current debate on land tenure and policy

Despite the constitutional provision that security vested the ownership of land to the state, rural land policy in Ethiopia has remained to be one of the sources of disagreement and focus of debate among politicians, academics, and other concerned parties. This is not surprising given the agrarian nature of the Ethiopian economy and the role of land in the social and political history of the country.


In an assessment of the land policy debate in present day Ethiopia Yigremew Adal shows that there is an unfortunate focus on ownership issues and a dichotomy of views on state versus private ownership. The government and the ruling party advocate state ownership of land while experts and scholars in the field, western economic advisors, international organizations such as the World Bank, and opposition political parties favour private ownership. However, despite some attempts there has not been a thorough and systematic study of the patterns, diversity and rationale of alternative views on land tenure.


The main plank of the view advocating state ownership is that private land ownership will lead to concentration of land in the hands of few people who have the ability to buy resulting in the eviction of the poor peasants and thus aggravating landless potentially leading to massive rural-urban migration of people left without any alternative means of livelihood. The empirical validity of this claim is one of the issues that the rural household survey has to address.


Critics of the current land holding system and those that advocate some kind of free hold largely base their arguments on a set of hypothesis about the behaviour of economic agents and the familiar property rights argument partially backed by some empirical results from Ethiopia and other lands. Since most of the arguments are variations in the same, they can be summarized using the more coherent formulation in Borrows and the Roth directly:


  1. Individualization of land tenure (leased and freehold ownership) increases tenure security of the landholders, thereby reducing economic costs of litigation over land disputes.

  2. Individualization increases investment by increasing tenure security and reducing transaction costs. Higher tenure security increases expected investment returns, thereby increasing the demand for capital (including credit) for fixed-place investment. The supply price of credit decreases because the cost of lending is reduced by improved credit worthiness of projects, and higher collateral value. Both supply and demand effects increase investment.

  3.  Individualization will cause a land market to emerge. Land will be transferred to those who are able to extract a higher value of product from the land as users that are more productive bid land away from less productive users.


Others based their arguments against the present land tenure system from the property rights perspectives. Some of the arguments include:


  1. Current rights are not completely specified, so that they cannot serve as a perfect system of information about the rights that accompany ownership.

  2. All or some of the current rights are not exclusive, so that all rewards and penalties resulting from an action do not accrue directly on the person/s empowered to take action.

  3. current rights are not freely transferable, so that rights failed to gravitate to their highest value use, and

  4. Some or all of the current rights are not enforceable and completely enforced.

Last modified on Monday, 23 November 2020 19:45