Monday, May 20, 2024
BusinessGambella region ceases availing farmland for DBE-financed projects

Gambella region ceases availing farmland for DBE-financed projects

Authorities of the Gambella regional state cease providing land for projects financed by the Development Bank of Ethiopia (DBE), as the policy bank has failed to return undeveloped land for more than eight years.

The decision corresponded with the measures taken by officials in the Gambella Region to execute a new masterplan geared at assuring optimal use of land suitable for commercial farming and other activities.

Recently, the Region’s Investment Board and cabinet passed a resolution that demanded the bank surrender lands that are not being used to the regional government, as well as pay lease and taxes for land that is being used.

The bank has not yet handed over ownership of the lands to the local government. “The DBE is unable to pay lease and tax on the lands that it provided for investors,” Low Obup (PhD), the investment commissioner of Gambella regional state, told The Reporter.

DBE has been given access to over half a million acres of land by the regional state over the course of the last six to eight years. The policy bank, in turn, made the lands available for commercial farming investors and financed 70 percent of the project cost.

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The vast majority of investors disappeared after DBE loans were taken out in their names. DBE was unable to collect the loans that it had granted since the projects for which the loans were taken out were unsuccessful, and the investors who had taken the loans had fled the country after squandering the money.

According to a report that was compiled in 2016 on the mismanagement of investment lands in Gambella under the administration of former Prime Minister Hailemariam Dessalegn, the DBE disbursed a 4.3 billion birr loan for close to 200 investors. The commercial farmers acquired about half a million hectares of property, but only a small fraction of that farm land was used to construct camps and begin operations.

The land was originally owned by the regional government, but the bank has since acquired it from them and is transferring it to investors, who are also eligible for loans from the DBE.

2014 marked the beginning of the trend. After the overwhelming failure of the projects, DBE pulled the plug on the scheme and discontinued providing funding for rain-fed agricultural projects in 2018.

Another assessment conducted by the regional government recently revealed that the policy bank provided loans for a total of only 200,000 hectares of land. This is significantly less than what the Bank claims to have provided.

The assessment, according to the Commissioner, discovered that there were 263 commercial farming investors who did not take the loan from DBE, while there were 90 investors who took the loan but then vanished.

“The regional government has decided that the DBE must give back the land for which it did not give a loan,” Low said.

The region needs to reclaim the land currently under DBE control for two reasons, Low says.

“First and foremost, it is tied to the region’s recently enacted land use master plan. This document defined and designated which land should be used for commercial development, national parks, forestry, water bodies, grazing, wetland, urban development, infrastructure, and other reasons.”

The master plan lowered Gambella’s commercial farming land area from 3.2 million hectares to approximately 800,000 hectares.

“Another issue with the previous approval procedure was the lack of a land use policy. The commercial farmers were given access to forest areas, parks, and other designated areas,” the Commissioner said.

The DBE properties were granted in the absence of a land use policy, according to him. As a result, the property formerly designated for the DBE must be realigned with this land use mapping, Low explained.

The second factor is a shortage of new investment land in the area.

“Investment requests are increasing in Gambella. Nevertheless, we do not have any land to offer to new investors. The bank owns the majority of the region’s land suitable for commercial farming,” Low remarked.

Low says that in the last nine months, the region has granted 228 new investment licenses to firms in the agriculture, service, industry, and mining sectors.

The regional administration also contends that the DBE failed to pay the region’s land lease, tax, and land use costs. The land lease is 100 birr per hectare per year in urban and infrastructural sectors. However, in rural regions, the lease is 90 birr per hectare per year.

Yohannes Ayalew (PhD), the president of DBE for the past two years, has his own strategy. He previously stated that the bank intends to sell the lands to new investors and recoup the money it lost from the prior investors. Although he had stated this previously, Yohannes did not respond to The Reporter’s request for comment on the Gambella regional government’s latest decision.

“DBE claims it can only pay the dues if it transfers the land to other investors. This is not right,” Low added. The bank took a large amount of land from Gambella, but the bank only issued a loan for a portion of it, according to Low. “As a result, the loan-free land must be returned to the regional government.”

According to regional officials, the president of DBE has visited the Gambella region and discussed the matter. But officials claim the issues are still unresolved.

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