Note on… Foreign Land Acquisition in Ethiopia

October 11, 2010

With the view of adding a word to the land acquisition chronicles of the Law Notepad, this note provides a brief perspective on the constitutional framework of Ethiopia, considered as one of the major land-dealing countries.

The Constitution of Ethiopia stipulates that land is publicly owned and hence is not a subject of contract of sale (Art.40 (3)).

Individuals can only have a right to use it. There are a number of ways of acquiring land in Ethiopia. The constitution states that every Ethiopian peasant and pastoralist has the right to have land free of charge (Art.40 (4) & (5). Others can acquire land on the basis of lease agreement either from the federal government or state governments.

Farmers and pastoralists have also the right to lease the land they themselves have acquired free of charge to other people for a period of time which differs according to the manner the land is intended be used for and the laws of the regional state in which the land is situated. In this relation, Article 8(1) of Proclamation no.456/2005 provides: “Peasant farmers, semi pastoralists and pastoralist who are given holding certificates can lease to other farmers or investors land from their holding of a size sufficient for the intended development in a manner that shall not displace them, for a period of time to be determined by rural land administration laws of regions based on particular local conditions”. The usual distinction drawn in by regional laws in determining the period of time for which farmers are allowed to lease their land is between traditional and modern farming, longer period of time allowed for the latter. But the maximum period of time to acquire land this way from farmers is twenty-five years.

Many flower farmers have acquired land this way. For an international investor, however, the best alternative to acquire land for crop production considering the fact that this requires a larger piece of land is through lease negotiations with regional states. Recently considering that utilization of land is closely related to access to water resources, and that many of the river basins are interstate and administered by the federal government (see the map and related note), two of the regions where large tracts of unutilized land is located have delegated the federal government to facilitate the transfer of land to foreign investors. The government of Ethiopia has identified 3million hectares of land (1.7 million hectares according to another report) to be leased for foreign investors and since 2007 it is reported that 815 agriculture-related foreign-financed projects are approved by the government.[1]

The main active buyers are Saudi, Indian, and Egyptian.


The primary responsibility in the management of water resources lies with the federal government. The federal government however, discharges its responsibility by enacting the basic legislative framework under which regional governments are empowered to administer water resources in their respective territories in accordance with federal laws (Art.52 (2)(d) of the Constitution). In addition to providing the basic legislative framework for the management of water resources, the federal government also has the power to “determine and administer the utilization of the waters or rivers and lakes linking two or more states or crossing the boundaries of the national territorial jurisdiction” (Art.51 (11)).

 Major water bodies of the country link or cross two or more states (in fact most of them are international rivers) and hence administration of such water bodies is the responsibility of the federal government. The map presents major rivers and water bodies of the country. It is clear from this that no major river is found within the exclusive territory of one state; almost all major rivers with the exception of Awash are international, a fact which further augments powers of the federal government.


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