Investment law draft that allows foreigners to own land for residential home triggers controversy

Investment law draft allows foreigners to own land in Ethiopia for residential purpose. Parliamentarians point out that it is against the constitution

Investment law _ Ethiopia _ foreigners
Ethiopian Parliament

borkena
December 17, 2019

The Ethiopian Parliament discussed on Tuesday investment law amendment. It  triggered controversy as the draft allows foreigners to have what the Ethiopian constitution calls right to “immovable property,” a right which is exclusively, as stipulated in the Ethiopian constitution, reserved for Ethiopian citizens ( You may refer to article 40: 3, among others subsections)

According to a report by Sheger FM, article 18 subsection 2 of the draft allows foreign investors in Ethiopia to build and own a residential house in Ethiopia.

State Minister Chala Lemi told members of parliament, as reported by Fana Broadcasting Corporation (FBC), that the investment law draft  is informed by “job creation, technology transfer, growing the foreign currency as well as making use of Ethiopia’s natural, cultural and other resources.”

Members of parliament, however, opposed it pointing out that the Ethiopian constitution clearly specified right to get land for residential purpose and build a house, create an “immovable “wealth to Ethiopians, and they argued that the draft contravenes the supreme law of the land. 

As it is directed to the relevant standing committee in the House of Commons, parliamentarians emphasized that the committee should look into it carefully before it is approved.

The sixth regular session of the House of Commons has also discussed draft to privatize state-owned enterprises.  Chala Lemi framed the purpose of privatization as “improving productivity and competitiveness, and enhance capital and financial supply” of these enterprises.

One of the first economic reform measures that Abiy Ahmed introduced just a few months after taking over the office of Prime Minister was to “privatize” enterprises that are widely seen as national assets. Ethio-Telecom, Sugar-enterprises and Ethiopian-Airlines are among enterprises to be privatized. As the matter was expected to be sensitive to most Ethiopians, the prime minister’s approach was to establish a council, by handpicking individuals that are believed to have considerable social influence, to oversee the process.

Despite that, reputable Ethiopian economists have been alarming the public about irreversible damages that the privatization policy could bring to Ethiopia.

Abiy Ahmed’s government has recently got over $6 billion dollars in loans from international financial institutions like IMF and The World Bank, not to mention funds from state actors in the Gulf region. And it seems that privatization policy was one of the conditions.  In fact, the draft legislation to amend investment law came barely a week after the IMF and The World Bank announced the loan to support Abiy Ahmed’s “homegrown economic growth” policy.



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