BizCLIR

The ability to freely own all types of property and to easily transfer and register property is a fundamental facet of business and economic growth in an emerging free-market economy such as Rwanda. In Rwanda, as in most economies, land and improvements to land account for most of the wealth of the country. A strong legal and institutional framework is imperative in order for individuals and businesses to own, use, and sell all types of property; to manufacture and sell products and services; to raise capital; and to obtain credit.

This chapter is grounded in the World Bank’s Doing Business indicators for Registering Property. Those indicators examine the legal, institutional, and social underpinnings of registering real property – land and fixtures on land – in a country. They first center on the right of various constituencies to buy, sell, inherit, and otherwise own real property and to use it with only limited constraints. They then examine the ability of individuals and companies to register property with the government, thus signaling legal ownership, which is a critical component of using the property to access credit. This chapter delves more deeply into the environment for registering property, closely examining the extent to which property rights may indeed be used as a basis on which to build wealth. Rwanda has a population of approximately 8.2 million and land surface area of 26,388 square kilometers. It has a population density of over 340 persons per square kilometer and is one of the most densely populated countries in Africa. About 92 percent of Rwanda’s inhabitants live in rural areas and 90 percent of them depend on agriculture. In 2006, the per-capita income was estimated to be US $250 and the incidence of poverty was slightly above 60 percent. In the United Nations’ most recent Human Development Index, Rwanda ranks 161st out of 177 countries surveyed.

Rwanda has a hilly topography. More than 50 percent of farm holdings have experienced severe forms of soil and fluvial erosion. Because of land scarcity there is overcultivation of agricultural fields. Land productivity for major crops has been declining since the 1990s, due to demographic pressure, environmental degradation, and lack of use of modern agricultural methods. Through inheritance, land fragmentation has been so extensive that it is often referred as “miniaturization.” Land has been linked to conflict for four decades after Rwanda’s independence. In fact, some experts note that land has been a factor behind mounting social tensions before every major conflict in Rwanda. Even today more than 80 percent of all disputes in Rwanda reportedly are related to land. Conflicts arising from land relations have been fueled by the land scarcity, growing unequal distribution of landholdings, insecure land tenure, and a growing population of landless people.

At present, Rwanda has not yet moved to a fully operational and modern land-titling system. Rwanda’s Doing Business ranking slipped in 2008 to 137th from 134th in 2007. The duration for property registration in Rwanda is what is most surprising – it takes 371 days. There are many ways that Rwanda can improve this showing, and by so doing, it can better support the wealth and viability of the majority of its citizens.