NAIROBI, Kenya, Nov 18- A local think tank has challenged the government to develop a simplified legal framework that can help the public understand their rights as property users.
This is one of the recommendations that a report by the Institute of Economic Affairs (IEA) has come up with to try and break down the barriers that exist in the country’s property market.
IEA Program Officer David Owiro opined that a more effective property rights system would make those rights more easily accessible to particularly individuals and small business in the country.
“We will have a more efficient property market and you’d also have better managed prices. People have been complaining that land and property prices have been so high but through proper legislation regime, we are able to enforce our economic development,” he said.
Kenya has a very weak property rights system that is full of ‘conflicts’ and can largely be traced to the country’s history of communal ownership, colonisation and the one-party
The system has therefore been abused, is subject to speculation and has led to high levels of corruption both in the public and private sectors.
This has in turn seen huge tracks of land being illegally acquired while unsuspecting members of the public have been duped into buying government land not to mention mistrust among the citizens.
The matter is complicated by the fact that the country lacks proper electronic records of properties which means that searches have to be done manually, causing corruption to thrive.
However, while presenting the report titled ‘Kenya Property Markets Scorecard’, Owiro reinforced the need to fast track the digitisation of the lands registry saying it would enhance corporate governance and accountability in key government institutions that deal with property rights.
“This has always been something that the government has been trying to do, but they are always to do it. Action needs to be taken fast because this is where the mess is originating from,” he added.
The report, which largely looked at how the regime is impacting small businesses and subsequently their ability to access credit, found that the firms are also impeded by their limited knowledgeable on property transactions and can therefore not undertake any meaningful negotiations.
It thus means that not only do these businesses find it hard to access loans from financial institutions but those who are lucky to do so are unable to negotiate for better interest rates.
For instance, to many people, a land title deed which shows proof of ownership rights is the most important document that they have. However, many do not recognise that rental and lease agreements are equally crucial.
However, in order to encourage more Small and Medium Enterprises (SMEs) to use formal leases, there needs to be legal arrangements that are prepared in simple and innovative way.
To address this constrain, the report also recommended the initiation of reforms that would see banks accept tailored made financing tools for the small businesses.
In addition, IEA proposes that the government, private sector and the civil society needs to play a crucial role in educating the SMEs on property rights and their rights as users of property.
If these and other suggestions, coupled with the implementation of the new constitution and the National Lands Policy are executed, IEA said Kenya would be well on her way to addressing the long-standing conflicts and inequalities that have dogged the country for decades.
Further, it would make it easier for informal businesses to have access to all the facilities that they need to grow and graduate into large firms that can contribute to job and wealth creation.