Designing Land Value Capture Tools in the Context of Complex Tenurial and Deficient Land Use Regulatory Regimes in Accra, Ghana

March 2019

The findings and conclusions of this Working Paper reflect the views of the author(s) and have not been

subject to a detailed review by the staff of the Lincoln Institute of Land Policy. Contact the Lincoln Institute

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Designing Land Value Capture Tools in the

Context of Complex Tenurial and Deficient Land

Use Regulatory Regimes in Accra, Ghana

Working Paper WP19SB1

Samuel Banleman Biitir

University for Development Studies

Abstract

Rapid urbanization has increased the demand for urban infrastructure services. Municipalities

have attempted to finance infrastructure services with value capture instruments. The paper

highlights how value capture instruments are designed and implemented in Ghana. The study

used the case study strategy of inquiry and multiple case study design to locate the research

within the contexts of fiscal decentralization policies, urban planning and land tenure

frameworks. The paper concludes that the tax or fee-based land value capture instruments have

more chances of success if teething implementation challenges are addressed. The current

passive approach to urban development and the inability of metropolitan, municipal and District

Assemblies to enforce land use regulation does not promote the implementation of the

development-based land value capture instruments. Besides, the concept of land value capture is

not clearly understood in general among key stakeholders. The paper proposes a mutual gains

approach to resolving the teething implementation challenges for tax or fee-based tools.

Highlights of Findings

• Development charges and in-kind contribution have more potential for implementation in

GAMA

• There is a lack of awareness and initiative to implement tax or fee-based value capture

tools.

• Passive governance approach to urban land development promotes project-related value

capture through land and property sales by land developers.

• Complex land tenure system is affecting land use planning and enforcement of land use

regulations

• Parastatal and private land developers’ activities provide critical urban management and

development lessons for MMDAs for the implementation of land value capture

instruments in general.

Keywords: Land value capture, land-based financing, urban infrastructure, urban planning, land

tenure, land development approach, legal and institutional frameworks.

About the Author

Samuel Banleman Biitir is a lecturer in the Department of Real Estate and Land Management,

University for Development Studies. He is a professional member of the Ghana Institution of

Surveyors, Estate Surveying and Valuation Division. His research focuses on land governance,

housing and urban infrastructure finance.

PO Box UPW 57

UDS, Wa Campus

sbbiitir@gmail.com

Acknowledgements

I would like to thank the Lincoln Institute of Land Policy – David C. Lincoln Fellowship in Land

Value Taxation Program for supporting this research. I thank Oliver Tannor, Ali Hashim, and

James Parimah for assisting me with the interviews. I also thank Joseph Ayitio and Dr. Samson

Aziabah for their detailed reviews and insightful comments on the final draft. I thank the

Municipal Engineers, Physical Planners and Budget Officers of the Ga East, La Dade Kotopon

and Kpone Katamanso Municipal Assemblies for the invaluable time they spent with my

colleagues and me sharing their views. I also thank the various experts from Tema Development

Company, Ghana Airport Company and Oak Villa Estate for their time. Finally, I thank the

various participants from the public and private sectors that participated in the research

dissemination workshop.

Table of Contents

Introduction .............................................................................................................................. 1

Overview of Land Value Capture Instruments and Typologies .......................................... 2

Types of Land Value Capture Instruments ............................................................................ 3

Critical Success Factors for Implementation ......................................................................... 4

Pre-Requisite Conditions for the Implementation of Development-Based LVC ................... 6

Urban Development Context of Ghana .................................................................................. 7

Decentralization in Ghana .................................................................................................... 10

Urban Planning System ........................................................................................................ 10

Land Tenure and Administration System ............................................................................. 14

Methodology ........................................................................................................................... 15

Profile of the Greater Accra Metropolitan Area (GAMA) ................................................... 17

The Legal and Institutional Arrangements for Land-Based Revenue Generation ......... 21

Land-Based Revenues Generated at the National Level ...................................................... 21

Gift Tax............................................................................................................................. 21

Estate Duty and Inheritance Tax ...................................................................................... 21

Stamp Duty ....................................................................................................................... 21

Capital Gains Tax ............................................................................................................. 22

Rent Tax ........................................................................................................................... 22

Fiscal Decentralization and Land-Based Revenues ............................................................. 23

Stool Land Revenues ........................................................................................................ 23

Development Charge ........................................................................................................ 24

Development or Building Permit Fees ............................................................................. 25

Betterment Levies ............................................................................................................. 26

Property Rates................................................................................................................... 27

In-Kind Contribution ........................................................................................................ 28

The Contribution of Land-Based Revenues to Total IGF .................................................... 28

Implementation Challenges of Land Value Capture Instruments ........................................ 29

Technical and Administrative Challenges for Assessment and Collection ...................... 29

Knowledge Gap and Lack of Awareness ......................................................................... 30

Lack of Initiative and Social Entrepreneurial Mind-Set ................................................... 32

Inadequate Staff and Expertise ......................................................................................... 32

Inadequate Collaboration Among Inter-Governmental Agencies .................................... 33

Inability to Enforce Land Use Regulations ...................................................................... 35

Tema Development Company (TDC), Community 24 Case Study ................................... 37

Overview .............................................................................................................................. 37

Land Value Capture Via Project-Related Land Sales .......................................................... 39

Land Ownership and Local Land Use Planning ............................................................... 39

Funding Arrangement ....................................................................................................... 40

Collaboration and Partnership with Public Sector Institutions ......................................... 42

Evidence of Land Value Uplift ......................................................................................... 43

Strategy for Recovering Infrastructure Cost ..................................................................... 43

Administrative Arrangement and Support Services ......................................................... 43

Human Resources and Technical Expertise ..................................................................... 44

Target Beneficiaries .......................................................................................................... 44

Ghana Airport Company’s Airport City I Project Case Study ......................................... 44

Overview .............................................................................................................................. 44

Land Value Capture Via Project-Related Land Sales .......................................................... 46

Land Ownership and Local Land Use Planning ............................................................... 46

Financing Arrangement .................................................................................................... 48

Strategy for Recovering Infrastructure Cost ..................................................................... 48

Collaboration and Partnership with Public Sector Institutions ......................................... 49

Evidence of Land Value Uplift ......................................................................................... 49

Administrative Arrangement and Support Services ......................................................... 49

Human Resources and Technical Expertise ..................................................................... 50

Target Beneficiaries .......................................................................................................... 50

Oak Villa Estate Case Study ................................................................................................. 51

Overview .............................................................................................................................. 51

Land Value Capture Via Project-Related Land Sales .......................................................... 52

Land Ownership and Local Land Use Planning ............................................................... 52

Funding Arrangement ....................................................................................................... 54

Strategy for Recovering Infrastructure Cost ..................................................................... 54

Collaboration and Partnership with Public Sector Institutions ......................................... 54

Evidence of Land Value Uplift ......................................................................................... 54

Administrative Arrangement and Support Services ......................................................... 55

Human Resource and Technical Expertise ....................................................................... 55

Target Beneficiaries .......................................................................................................... 55

Observations on the Case Studies ......................................................................................... 56

Lessons from the Case Studies: Key Themes and Issues.................................................... 58

Land Value Capture Through Project Related Land Sales .................................................. 58

Local Land Use Planning and Enforcement of Planning Instruments ................................. 59

Urban Management and Development Outcomes ............................................................... 60

Funding Strategies for Urban Infrastructure ........................................................................ 61

Security of Land Tenure ....................................................................................................... 63

Collaboration and Partnerships with Key Stakeholders ....................................................... 63

Revenue Streams for Municipalities .................................................................................... 64

High-Quality Human Resource and Technical Expertise .................................................... 65

Strategies for Designing and Implementing Value Capture Instruments ........................ 65

Strategies for the Implementation of Tax or Fee-Based Instruments ................................... 65

Build the Requisite Technical Information and Requirements for Each Capture Tool .... 66

Identify, Assess, and Understand Stakeholders Issues and Interests ................................ 67

Design a Process of Collaboration with Key Stakeholders .............................................. 68

Design the Process of Deliberation for Building Trust Among Key Stakeholders .......... 69

Design the Process of Building Long Lasting Partnerships ............................................. 70

Strategies for the Design and Implementation of Project Related Land Sales ..................... 71

Strategies to Ensure Effective Municipal Level Land Use Planning and Enforcement ... 71

Develop Strategic Partnerships with Land Developers to Implement Project Related Land

Sales .................................................................................................................................. 72

Conclusion .............................................................................................................................. 74

References ............................................................................................................................... 77

List of Figures

Figure 1: Urban Population Growth (Pop. Millions) ................................................................. 8

Figure 2: Sustained Economic and Urbanization Growth Rates Since 1984 ............................. 8

Figure 3: Ghana, Sub-Saharan Africa and World GDP Growth Rates ...................................... 9

Figure 4: Governance Structure and Institutional Framework Under Act 480 ........................ 12

Figure 5: Three-Tier Spatial Planning Framework And Planning Instruments ....................... 13

Figure 6: The Greater Accra Metropolitan Area (GAMA) ...................................................... 19

Figure 7: Tema Acquisition Area ............................................................................................ 38

Figure 8: Community 24 Land Use Scheme ............................................................................ 40

Figure 9: Sections of the Road Network .................................................................................. 42

Figure 10: Sections of Buildings Under Construction ............................................................. 42

Figure 11: Airport City I Land Use Plan ................................................................................. 46

Figure 12: Commercial Development of Airport City I .......................................................... 48

Figure 13: Typical Housing Development at Oak villa Estate ................................................ 53

Figure 14: Revenue Streams from Land Developers ............................................................... 64

List of Tables

Table 1: Proliferation of Local Governments .......................................................................... 10

Table 2: Case Study Organizations and Local Government Administrative Areas................. 16

Table 3: Land Base Revenue to Total IGF .............................................................................. 29

Table 4: Construction and Property Registration Performance ............................................... 37

Table 5: Estimated Coverage Areas and Approximated Cost of Infrastructure ...................... 41

Designing Land Value Capture Tools in the Context of Complex Tenurial and Deficient

Land Use Regulatory Regimes in Accra, Ghana

Introduction

Ghana has experienced rapid population growth, urbanization and economic development over

the past three decades. These developments have influenced the development of Ghanaian cities

and affected land uses, land values and urban forms. The combined effect of these factors has led

to unplanned and uncoordinated spatial expansion leading to increased demand for urban

infrastructure. Yet, the necessary financial resources and competencies for local infrastructure

expansion simply do not exist to meet this challenge (Paulais 2012; World Bank 2015b). The

financing gap for urban infrastructure and services in most cities is widening. The World Bank

(2015) reports that Ghana’s urban infrastructure and services are expensive and the current level

of existing revenues are woefully inadequate. Already, there has been chronic underinvestment

in general infrastructure including transportation, water and power grids in countries around the

world over the years resulting in huge deficits especially in urban areas (Mckinsey Global

Institute 2013). Urban infrastructure is usually funded from traditional sources like central or

local government grants, donations, loans or taxes. This revenue base is already overstretched

(McIntosh 2014).

Nonetheless, land value capture tools have been used by local governments in most developed

and some developing countries as a revenue source to fund urban infrastructure (Ingram and

Hong 2012; Paulais 2012; Smolka 2013; Suzuki et al. 2015). Scholars and practitioners (Paulais

2012; Peterson 2009; Smolka 2013; Suzuki et al. 2015) have advanced arguments that land value

capture tools could be used to fund urban infrastructure through opportunities created by

urbanization. Smolka (2013) argues that urbanization paves the way for active urban land

markets and increased public investments in urban areas. Increased public investment in urban

infrastructure and services lead to high densities of urban areas, which creates significant land

value increases. Paulais (2012) echoed that urban extension generates increases in land value.

Thus, land with easy accessibility by road, utilities, or even public transportation service has a

greater increase in value.

Besides, Peterson (2009) asserts that land is a significant source of revenue for infrastructure

finance as the magnitude of revenue raised from land sales and other land-based financing

instrument is substantial. He posits that land-based financing thrives well where there is rapid

urban growth since land prices tend to rise rapidly in response to this growth. He echoes that this

creates an opportunity to generate sufficient revenue to finance the increasing infrastructure

needs that go with rapid urban growth.

Thus, land value capture instruments are increasingly perceived as a complementary source of

financing urban infrastructure financing gaps of rapidly urban cities in developing countries.

This perception is rooted in the argument that urban infrastructure provision impacts positively

on land values to a greater extent. Therefore, it is only fair to capture the monetized land values

to complement the financing of urban infrastructure. Given that most cities in sub-Saharan Africa

are characterized by complex land tenure regimes, deficient land use regulatory systems and

urban informality (Napier et al. 2013), the challenge of implementing LVC as a form of

financing urban investments is significant.

In this paper, I provide a contextual analysis of how land value capture instruments are

conceived and implemented by local governments in Accra, Ghana. I used multiple case studies

of three urban sites of intermediate scale located in three municipal assemblies within Greater

Accra Metropolitan Area (GAMA) to explore the use of land value capture instruments in the

context of complex land tenure, and deficient land uses regulatory regimes. I focused on three

land development projects cases involving changing land uses in three local government areas

within GAMA. I used two propositions to guide the study. These are: (1) sound land use

regulatory framework enhances the process of land value capture; and (2) partnerships with land

development agencies create opportunities for land value capture.

The following section is divided into seven sections: (1) Overview of land value capture

instruments and typologies; (2) Urban development context of Ghana; (3) Methodology; (4)

Legal and institutional framework for land-based financing; (5) Overview of case studies and

findings, followed by a section on lessons learnt from land development cases on the

implementation of LVC; and finally, (6) Strategies for design and effective implementation of

land value capture tools in Accra.

Overview of Land Value Capture Instruments and Typologies

Land value capture is defined by Smolka (2013) as the recovery by the public of the land value

uplift (unearned income) generated by actions other than the landowner’s own investment. A

more elaborated definition is provided by Suzuki et al. (2015). They define land value capture as:

A public financing method by which governments (a) trigger an increase in land values

via regulatory decisions (e.g., change in land use or FAR) and/or infrastructure

investments (e.g., transit); (b) institute a process to share this land value increment by

capturing part or all of the change; and (c) use LVC proceeds to finance infrastructure

investments (e.g., investments in transit and TOD), any other improvements required to

offset impacts related to the changes (e.g., densification), and/or implement public

policies to promote equity (e.g., provision of affordable housing to alleviate shortages

and offset potential gentrification). (Suzuki et al. 2015, xxii)

However, land value capture (LVC) has been contrasted with land-based financing in that the

latter is a broader term that is used to describe how land revenues are used to finance

infrastructure projects. According to the African Centre of Cities (2015), land-based financing is

more encompassing than LVC in four different ways: (1) arrangements that result in

infrastructure being provided or financed by a developer; (2) special assessments that reflect the

cost of improvement that serves a property, regardless of whether these results in real increments

in the property's value, such as development charges ; (3) land and property taxes or rates; and

(4) transfer taxes imposed when land is bought and sold.

In this paper, I adopt both land value capture and land-based financing definitions because of the

crosscutting issues that have to do with not only recovery of the unearned income from

landowners but also the objective of using the captured values for funding urban infrastructure

by local governments. Besides, because of the implicit intention of some deliberate action by the

capturing authority to promote equity and inclusion as the case may be in LVC instruments, I

examined LVC in the context of Ghana to ascertain the relevance of this implicit intention. Also,

these definitions become relevant because of the increasing awareness of the potential of land

value capture finance created by the combination of factors that needed to be contextualized

within geographical peculiarities of cities and regions. For example, Smolka (2013) notes that

the concept of land value capture is gaining popularity in developing countries. According to

Smolka (2013), the growing popularity of the concept is conditioned by economic stabilization

and fiscal decentralization; improvement in urban planning and management; improvement in

political democratization, increasing social and civic awareness with regard to demands for

equity in public policy responses to growing societal needs; mutable assertiveness to

privatization and public-private partnerships in urban services delivery; the influence of

multilateral agencies like the UN-Habitat Global Land Tool Network (GLTN); and growing

freedom of local government to mobilize internally generated funds for local development. The

trends of urban development and the factors highlighted by Smolka (2013) put Ghana in this

perspective, and it is important to bring the discussion of land value capture finance in the

context of recent developments in the country.

Types of Land Value Capture Instruments

Various instruments have been used to capture unearned land and property value increment.

According to Suzuki et al. (2015), these instruments can be classified broadly into two categories

- Tax or Fee-based and Development-Based. Tax or Fee-Based Instruments include; property

and land tax, betterment charges/levies, and tax increment financing (TIF). The Development-

Based Instruments, on the other hand, include land sales or leasing, joint development,

development rights or air rights sale, land readjustment, impact fees or development exaction and

urban redevelopment schemes, amongst others. Smolka (2013) on the other hand, classifies these

instruments as either direct or indirect. Smolka’s classification clearly differs from Suzuki et al.

(2015) in terms of their constituents. The direct instruments according to Smolka are: betterment

contribution, land readjustment, public land leasing, land value tax, land value increment tax,

impact and development charges among others. The indirect instruments include: property tax,

special districts (BIDs), expropriation, exactions, land banking, tax increment financing (TIF)

among others.

The extent of use of these instruments depends largely on the progressive evolution of cities in

terms of the nature of land markets, type of infrastructure (basic or advanced), logistics and

technical capacities, and the level of financial sophistication (Africa Centre for Cities 2015;

Feinstein 2012; Mathur and Smith 2012; Roberts 2011; Rybeck 2004).

Among these myriad of tools for land value capture, Paulais (2012) is of the view that only three

of these are likely to have potential application in African cities. These include: a) direct land

transfers; b) direct contribution from owners or developers; and c) land added – value taxation.

According to Paulais (2012), direct land transfers are possible when the public owns the land

where it sells or leases the land to finance public infrastructure in and around major

infrastructure projects like airports and seaports. Direct contribution in-kind is where developers

or landowners give part of their lands for public use in return for the capital investment. The land

added value taxation comes in the form of betterment contribution where property owners that

gain or will gain from public works are made to contribute to the financing of the public works.

This betterment levy is largely successful in Columbia where the calculation is based on three

parameters: a) the cost to build the project; b) the value added to the property attributed to the

project; and c) the affordability of the project ( Coleman and Grimes 2010; Paulais 2012; Smolka

and Amborski 2001; Smolka 2013)

According to the African Centre of Cities (2015), development charges are seen as having likely

potential application and success in African cities. Thus, the tools that have been utilized in the

advanced countries cannot be of universal application in the context of developing countries with

context-specific peculiarities. What is apparent in the views of pundits on the type of land value

capture tools workable in Sub-Saharan Africa is that the development-based tool has a high

degree of success because of the current political economy of land development in these

countries.

Critical Success Factors for Implementation

In reviewing case studies of cities that have implemented the Development-based LVC, Suzuki

et al. (2015), come to a conclusion that certain critical factors deserve careful attention for

successful implementation. One such factor is inclusive value creation. Suzuki et al. (2015) share

the view that land value creation is multifaceted and involves multiple stakeholders. Therefore,

capturing the value created by multiple stakeholders’ decisions requires extensive consultation,

inclusion, and participation. Unlike the Tax-based instruments where the government can take a

unilateral decision on imposing taxes, Development-based LVC requires consultation and

negotiations with multiple stakeholders. Thus, incentives and motivation of multiple stakeholders

in the urban land development process facilitate the design and implementation of the

Development-based LVC. These stakeholders should agree on the land value uplift upfront based

on market trends and decide on how the land value uplift is captured and shared among the

various principal stakeholders. The sharing of value increment entails negotiations among

stakeholders based on their relative contribution to the process of the land value uplift (Suzuki et

al. 2015)

Besides, the development-based LVC is a value creation tool and not a simple sale of public land

and leasing of land use rights (Suzuki et al. 2015). It requires strategic public land use planning

and orientation, especially in cities where the state owns the land, and a strategic choice on

whether to separate raw land production from land development and servicing (Paulais 2012).

The choice of separating raw land production from development and servicing is an

implementation model where the local government can decide to create land values by

transforming rural land to urban land use either through a land operator or land developer. The

raw land production process involves land readjustment strategies that seek to organize peri-

urban or rural land and plan it adequately for urban uses. Therefore, the extent to which local

government has a proprietary interest in public land determines the viability of the option to

implement the development-based LVC. However, Suzuki et al. (2015) add that public

ownership of land, though important, is not a necessary precondition. Where the state does not

own land, local government can expropriate private land through various innovative ways such

as land readjustment and land banking. However, what is important is that there must be a

strategic public land use aimed at ring-fencing the proceeds of public land sales and leasing for

funding some urban infrastructure.

Furthermore, sound operation systems that engage land development agents and act as a liaison

between local governments and private landowners facilitates the implementation success of

development-based LVC. Paulais (2012) analyzed the experiences of other continents and

concluded that there are two operation options in the implementation of the development-based

LVC. These operation options require a land operator, who acts as an intermediary between local

government and land developers and investors. It can sometimes take the place of local

government to negotiate with private landowners for land development and servicing (Paulais

2012). Thus, the choice of an operation option will depend on the role the land developer is

required to play. It also depends on whether local governments separate raw land production

from land development and servicing so that the two functions are played by different entities in

the land value creation process.

According to Paulais (2012), the aim of the land operator is twofold. First, make urban land

available by transforming raw, rural land or restructuring existing parcels and manage the entire

process. Second, create reserves of land for the local government. In addition, there are certain

advantages that inure to local government when they cooperate with the land developer in the

implementation of development-based LVC. First, the local government is able to outsource the

cost of project implementation to the developer. Second, it will have the benefit of working with

professionals of specialized land operations to ensure the effective implementation of the project

(Paulais 2012). Therefore, the role of the land developer is paramount in the implementation of

the development-based LVC.

In addition, the land operator functions as both an operator and a land developer. According to

Paulais (2012), as an operator, it holds and manages acquired assets before it retrocedes them to

the local government or land developers. Its source of revenue is through commission and fees

from transferred land to local government or developers. When the operator functions as a land

developer, it services and develops land for sales. Its source of revenue is through sales of

serviced and developed lands. Paulais (2012), highlights the need to separate these functions.

This separation is important concerning the issues of who finances the operator and how the

operator is paid in the implementation of the development-based LVC. The separation of the

functions of the land operator is justified by the nature of activity and expertise they possess.

Thus, the nature of the function of the land operator depends on country-specific conditions and

varies by configuration and by the scope of the intervention (Paulais 2012). Country-specific

conditions may include the legal and institutional frameworks of land ownership and land use

management. Based on these, land operators and developers may develop as offshoots of the

central government or local government. They may be a public or parastatal organization or even

private organizations depending on the local laws of the country. In addition, depending on the

scope of the intervention, the land operator and land developer functions may be combined in

one entity such as land development corporations (Paulais 2012).

Pre-Requisite Conditions for the Implementation of Development-Based LVC

Scholars have demonstrated that land-based financing in general has great potential in

developing countries where there are active land and property markets and good urban

governance (Palmer and Berrisford 2015; Paulais 2012; Peterson 2009; Roberts 2011). Suzuki et

al (2015) work on financing transit-oriented development with land values highlights the

potential application of the development-based LVC in developing countries. Drawing on

experiences and lessons from case studies of some developed countries, Suzuki et al. (2015)

echoed that the development-based LVC is suitable for developing countries. They argue that

adapting and implementing the development-based LVC requires certain enabling factors. These

include sound demographic and macroeconomic fundamentals, visionary master plans and sound

and flexible planning, intergovernmental collaboration, entrepreneurship, and clear, transparent

regulatory and institutional factors. These factors are encapsulated into “active land and property

markets and good urban governance.”

Sound demographic and macroeconomic fundamentals entail rapid urbanization and strong

economic growth that creates high demand for land and property. It creates a spatial

configuration that requires significant investment in urban infrastructure. In addition, it leads to

the emergence of middle-class households with effective demand for urban housing. This propels

large-scale land development activities with the necessary housing infrastructure (Suzuki et al.

2015). The activities emanating from this demographic and strong macroeconomic growth lead

to increases in land values in urban areas. In Sub-Saharan Africa, these conditions are becoming

more favorable in recent years and hence the advocacy for development-based LVC (Berrisford,

Cirolia, and Palmer 2018; Paulais 2012).

Visionary master plans and sound, flexible land use planning also facilitate the implementation

of the development-based LVC. According to Suzuki et al. (2015), long-term strategic vision of

the country incorporated in a master plan guides both economic and spatial development, and

channels resources into more focused development oriented interventions. Suzuki et al. (2015)

posit that global good practice cities implementing decades of master plans have identified major

transit investments as backbones to urban development. Therefore, Sub-Saharan Africa cities

with visionary master plans that identify major infrastructure corridors’ investments can draw on

the synergies between the impacts of these investments and land values. This will facilitate the

implementation of land use planning instruments that incorporate raising additional funds from

development-based LVC.

Furthermore, effective intergovernmental collaboration enhances the chances for successful

implementation of development-based LVC. Land value creation results from multiple actors,

actions and strategies most often facilitated by more than one governmental agency. Therefore,

the strategies to capture land values requires effective collaborative relationships and actions

(Suzuki et al. 2015). Cities, where there is a history of effective intergovernmental collaboration

in projects design and implementation enhances the opportunities for them to deliver innovative

projects, especially in large-scale land development projects. Thus, the design and

implementation of development-based LVC needs expertise and effective intergovernmental

collaboration that is able to manage the conflicting of interests of project actors.

Intergovernmental collaboration ensures that there are effective stakeholder engagements,

consultation and consensus-building around urban infrastructure investment and implementation.

Again, the ability of city governments to imbue creative and innovative entrepreneurial mindset

in the midst of limited local government revenues is critical to the success of the development-

based LVC (Paulais 2012; Roberts 2011; Suzuki et al. 2015). According to Suzuki et al. (2015),

the development-based LVC originated from an entrepreneurial undertaking by city governments

in the United Kingdom and the United States of America in the mid-19

century. Thus, local

government authorities in developing countries need to become entrepreneurial in the

implementation of development-based LVC. They should develop long-term strategies and

models for generating additional revenues from land value increments.

Urban Development Context of Ghana

Ghana has experienced rapid urban population growth over the last three decades. The total

population of the country more than doubled between 1984 and 2013 (World Bank 2015).

According to the World Bank (2015), the urban population more than tripled, rising from 4

million to 14 million people over the same period (Figure 1). The urban population growth has

been phenomenal in the total number of growing urban areas since 2000. The total number of

urban areas with a population between 50,000 and 100,000 increased from nine towns in 2000 to

36 in 2010. This urban growth has been concentrated in smaller cities rather than in the larger

ones (World Bank 2015). Thus, the rate of urbanization rose from 31% to 51% between 1984

and 2013 making the country more urban compared with West Africa and the global averages

(World Bank, 2015). According to the CAHF (2018), Ghana’s urban population is projected to

grow by 3.4% a year due to both natural growth and internal migration. Fortunately, this rapid

population growth and urbanization have coincided with stable economic growth in Ghana. Over

a period of three decades, the country has witnessed steady growth in the Gross Domestic

Product (GDP). For instance, the average GDP growth rate between 1984 and 2005 was 5.7%

annually; between 2005 to 2013 GDP averaged 7.8%, and between 2013 to 2017 it averaged

5.0% (Ghana Statistical Service 2018; World Bank 2015). Thus, according to the World Bank

(2015), the GDP growth rate has never fallen below 3.3% since 1984 (Figure 2).

Figure 1: Urban Population Growth (Pop.

Millions)

Figure 2: Sustained Economic and

Urbanization Growth Rates Since 1984

Source: World Bank (2015) Source: World Bank (2015)

Besides, Ghana was ranked as the fastest growing economy in Sub-Saharan Africa and one of the

fastest in the world in 2011 when it recorded a GDP growth rate of 14.4%. However, since then

the economy plummeted due to world economic shocks and falling commodity prices. In 2014,

GDP was 4% and rose marginally to 4.1% in 2015, but even then, it was higher than the Sub-

Saharan Africa average GDP growth rate of 3.8% (Figure 3).

This impressive performance of the economy in the midst of volatility in the global economy has

precipitated the current spatial patterns of development in the country. For example, the Ghana

Investment Promotion Centre estimates that about 85,000 transactions are recorded per year in

luxury residential real estate with an estimated value of US$1.7 billion ( CAHF 2018b; Mega

Africa Capital 2013). The residential real estate market segment is the largest, and it is estimated

to be the fastest growing sector within Ghana’s real estate market (Mega Africa Capital, 2013).

This market segment is made up of high-end, middle-income, and low-income brackets. There is

an increasing local demand for residential estate as urban population increases. These dynamics

in the real estate sector have influenced the current pace of urban expansion in many cities in

Ghana (CAHF, 2018).

The services sector is the largest contributor to GDP. It accounted for 54.6% of GDP in 2015,

56.8% in 2016 and 55.9% in 2017. Industry and Agriculture contributed 25.6% and 18.9%

respectively to GDP in 2017 (GHL 2016; GoG 2018). Real estate, which comprises land,

residential, commercial, industrial, and hospitality, contributed approximately 5% of GDP in

2013 and is the 4

largest contributor to the services sector (Mega Africa Capital 2013).

However, the real estate subsector growth performance also plummeted in 2015 from 7.7% to

3.8% in 2016 and rose marginally to 4.2% in 2017 (GoG 2018).

Figure 3: Ghana, Sub-Saharan Africa and World GDP Growth Rates

Source: International Monetary Fund, World Economic Outlook 2016.

In addition, the relatively stable economic growth and urbanization rates over the years have also

created urban economic opportunities that have influenced rural-urban migration, thereby

making these urban areas attractive to migrants. These opportunities led to an influx of migrants

to Ghana’s urban areas. This influx did not necessary create unemployment in these areas (World

Bank 2015). It is worth noting that urban unemployment rather fell by 1.5% between 2000 and

2010. The World Bank indicates that the major cities in Ghana witnessed a decline in urban

unemployment rates despite increased migration. Besides, urban migration has also changed the

structure of Ghana’s economy from its dependence on subsistence agriculture for employment to

industrial and services sectors. Thus, employment in industry and services sector increased from

38% to 59% between 1992 and 2010 (World Bank 2015).

Furthermore, improved economic growth and urbanization have decreased urban poverty levels

and increased access to basic infrastructure services. According to the World Bank (2015), the

total poverty incidence dropped below 25% in 2013 and below 11% for urban areas. Access to

basic urban services including electricity, water, and waste management services improved from

30% in 2000 to 70% in 2010 for electricity connectivity for small towns. Peri-urban Accra has

witnessed increased access to electricity from 60-75% in 2000 to 86-92% in 2010. These

improvements resulted from rapid economic growth and urbanization, which led to job creation,

especially non-farm enterprises in urban areas.

However, rapid urbanization in Ghana has also resulted in many challenges. The GoG/MLGRD

(2012) list a myriad of challenges confronting urbanization and management of urban centers in

Ghana. These challenges are encapsulated into three main themes consisting of productivity,

inclusion and institutions (World Bank 2015). The first theme, productivity, includes

overconcentration of growth and development in a few cities, weak urban economy, land use

disorders and unplanned urban expansion, weak rural-urban linkages, inadequate urban

investment and financing, and weak urban transportation planning and traffic management. The

second, urban inclusion relates to increasing urban insecurity, urban poverty, slums and squatter

settlements, increasing environment deterioration, and inadequate urban infrastructure and

services. The third theme is institutions related. This consists of weak urban governance and

institutional coordination, weak information, education and communication strategy, limited data

and information on urban centers, delimitation of urban areas of jurisdiction, and lack of

integrated planning across jurisdictional boundaries.

Decentralization in Ghana

As a response to the emerging socio-economic development of the country, the Government of

Ghana has been pursuing decentralization policies in line with democratic governance principles

since 1988. The aim of these policies is to enhance political participation and improve social and

infrastructure services at the local levels. Decentralization has been pursued from three levels:

(1) political; (2) administrative; and (3) fiscal. However, over the years, government attempts to

meet the needs of the growing population and rapid urbanization, have led to the proliferation

and fragmentation of Metropolitan, Municipal and District Assemblies (MMDAs) (Owusu

2015). For example, the last decade has witnessed considerable increases in the number of

MMDAs. The number of MMDAs more than doubled from 110 in 1988 to 254 in 2018 (Table

1).

Table 1: Proliferation of Local Governments

Year

Number of Local Governments

Total

Increase

Metropolitan

Municipal

District

1988

107

110

2004

124

138

+28

2008

124

170

+32

2012

161

216

+46

2018

167

254

+38

Source: updated from Owusu (2015).

The significance of this proliferation and fragmentation is that it weakens the financial resource

base, especially internally generated funds (IGF), of MMDAs. This has negatively impacted

urban infrastructure service delivery as many of the newly created MMDAs lack an adequate

IGF revenue based for service provision (Cities Alliances 2017). The proliferation has also led to

the over dependence of these MMDAs on central government transfers. The central government

transfers have been fluctuating in recent times, further affecting the infrastructure development

of newly created MMDAs. The Greater Accra Metropolitan Area has witnessed continuous

fragmentation and proliferation of MMDAs out of the already existing ones in a bid to ensure

that basic service delivery reaches the population and local governance at the grassroots level.

Urban Planning System

The urban planning system in Ghana is rooted in colonial legacies, typified by the old British

model of town planning. The initial focus of urban planning was more of development planning

where the concentration was on natural resource exploitation. Plans focused on the development

of infrastructure and social services were clearly targeted at the development of hydroelectricity

projects, delivery of public services, and town improvement through housing development

schemes (Acheampong 2019). Planning was concentrated in the resource-rich southern sector of

Ghana where geographic areas were mapped for major infrastructure projects in order to achieve

specific development objectives (Acheampong 2019; Fuseini 2016). However, because these

plans were focused on physical infrastructure development, which had an expression in spatial

terms, Acheampong (2019) describes it as the beginning of spatial planning or urban planning in

Ghana.

Formal urban planning was introduced in Ghana by the promulgation of the Town and Country

Planning Act (CAP 84), 1945. This Act introduced the urban planning instruments that sought to

guide the orderly and progressive development of land, towns and other areas with the aim of

preserving and improving neighborhood amenities and related matters. The Act established the

symbiotic relationship between physical developments in relation to land. The Act used planning

schemes or layout plans and development permitting to regulate physical developments. In

addition, Cap 84 established the institutional framework for spatial planning by establishing the

Town and Country Planning Department (TCPD) as the spatial planning unit in the country. The

1945 Act and its subsequent amendments further introduced procedures for urban planning. One

of such procedures was that an area had to be declared a ‘Designated Planning Area’ before a

land use plan could be prepared for that area.

The Minister in charge of town planning was given the power to consult with local authorities

and declare the local authority jurisdiction as a planning area by executive instrument. This gave

the Minister responsible for town planning discretionary powers to decide which town, village,

or neighborhood had to benefit from land use planning (Acheampong 2019). This situation had a

profound impact on the physical development of town and cities in Ghana in the sense that areas

that did not receive the minister’s attention and approval continued with physical developments

without a land use plan. This situation persists in in most parts of Ghana today. It marked the

beginning of deficient urban planning in Ghana, where many physical developments precede

urban planning.

The 1945 Act introduced a highly centralized planning system where decisions regarding

planning at any local government authority had to be approved by the minister responsible for

town planning. Though this type of system favored strategic infrastructure development

throughout the country (Fuseini 2016; Fuseini and Kemp 2015), in the case of residential

neighborhood development, it created bureaucracies and denied many the benefits of land use

planning. Moreover, Cap 84 introduced a piecemeal urban planning approach as the practice of

declaring planning areas meant not all areas that qualified for land use planning had access to it

(Acheampong 2019).

Having practiced centralized urban planning for decades, the dispensation of decentralization in

the African continent and in Ghana, in particular, paved the way for decentralized planning. In

1988, the decentralization program was initiated to introduce reforms in local governance

structure and to encourage and increase local-level participation in the development process. The

local government law (PNDC Law 107) which was subsequently replaced by the Local

Government Act (Act 462), 1993 granted administrative powers to local authorities and

mandated them to take charge of local development overall, including planning. In 1994, the

National Development Planning System Act, Act 480 was enacted to provide the legal basis for

planning at all levels of government. According to Acheampong (2019), these two laws set up

the new institutional framework for planning (Figure 4) and defined the nature and scope of

planning in Ghana.

The National Development Planning Commission (NDPC) was established in 1994 to perform

the functions of socio-economic, environmental and physical planning as a single task. However,

the NDPC concentrated on addressing economic planning at the national and regional levels with

little attention given to spatial planning. According to Acheampong (2019) the introduction of

development planning by Act 480 led to the neglect of spatial planning at the national and

regional levels of political administration.

Source: Adapted from Acheampong (2019, 46).

Thus, Act 480 and 462 introduced two types of planning systems in the country. The first is

development planning that emphasized economic planning at the national level and monitored

the activities of Regional Coordinating Councils. Second, is land use planning at the district

levels with a narrow focus on the preparation of planning schemes or layout for neighborhoods

in town and cities and development controls (Acheampong and Ibrahim 2016). This created a

situation where there were no coordinated efforts to synchronize crosscutting issues between

development planning and spatial planning. Therefore, the preparation of land use plans at the

local levels was reduced to assisting landowners to sell their lands as plans virtually had no

bearing on the socio-economic realities of MMDAs (Acheampong 2019). These lapses and other

factors led to the promulgation of the Land Use and Spatial Planning and Local Governance Acts

in 2016.

The deficiencies identified with the spatial planning system in the country led to several reform

processes. The Land Administration Project (LAP), which started in 2003, incorporated a

component on Land Use Planning and Management Project (LUPMP). This led to the

promulgation of the Land Use and Spatial Planning Act, Act 925 in 2016. The act addresses most

of the deficiencies in the earlier planning instruments. This new planning law has declared the

entire country as a potential planning area in contrast with Cap 84. The law further embraced the

Figure 4: Governance Structure and Institutional Framework Under

Act 480

National

Regional

District

National Development Planning

Commission and sector ministries

Regional Coordinating Councils

(RCCs)

District Planning Authority

District Planning Units (DPUs)

Political Administrative

Levels

NDP (system)

Act 480 (1994)

use of land use and spatial planning to inculcate in its scope a new tradition of integrated and

multi-scale planning (Acheampong 2019). The law has also introduced an institutional

framework to recognize spatial planning at the various levels of political administration while

maintaining the three-tier institutional set-up under Act 480.

The new planning law has also broadened the scope of the three-tier institutional framework to

include national, regional and district spatial development frameworks (figure 5). The effect of

this law is that, a three-tier hierarchical system of spatial planning instruments has been

introduced.

Source: Acheampong (2019, 52)

This three-tier spatial planning framework synchronizes district level plans with national

development objectives. Thus, the new spatial planning law has provided the legal requirements

for the preparation of spatial planning frameworks at all levels of political administration and

prescribed the required standards for each framework as well as the synergies between the

different levels of planning. What is important to note is that structure, and local plans are the

main planning instruments recognized and emphasized in the new law. Each MMDA is expected

to develop a District Spatial Development Framework in line with the national and regional

Spatial Development Frameworks. MMDAs are required by law to review this framework every

five years.

Joint or Multi-districts Spatial

Development Framework

National Spatial

Development Framework

(NSDF)

Regional Spatial

Development Framework

(RSDF)

District Spatial

Development Framework

(DSDF)

Joint or Multi-regional Spatial

Development Framework

Structure Plans

Local Plans

Figure 5: Three-Tier Spatial Planning Framework and Planning

Instruments

From the District Spatial Development Framework, the MMDA will then develop structure and

local plans. The main tool employed in the structure plan is zoning. The Ministry of

Environment, Science and Technology (MEST) and the Town and Country Planning Department

(TCPD) have created the Zoning and Planning Standards Guidelines to ensure that both Structure

and Local Plans conform to these standards. These standards prescribe acceptable and

permissible use and form in which development may occur in a planned area. The zoning and

planning standards by the TCPD has identified 25 land use development zones and has also

introduced a color coding system for various land use zones (MEST/TCPD 2011).

Land Tenure and Administration System

Land tenure and land administration in Ghana is peculiar and complex. The land tenure system

reflects the unique traditional political institutions and socio-cultural differences of tribes, clans

and families that acquired various interests in land through wars, conquest and assimilation and

first settlements (Ministry of Lands and Forestry 2003). Within the traditional context, land

ownership is inter-generational and transcends the living to include the dead and those yet

unborn. It has spiritual and religious connotations and therefore, dealings in land must reflect

these peculiarities. These peculiarities also informed the various land tenure systems in the

country. Thus, there are different types of land tenure systems and land holdings, acquisition, use

and disposal, which vary from one geographical area to another (Ministry of Lands and Forestry,

2003). These translate into different interests in land that are either derived from Ghanaian

customs or assimilated from English common law and equity.

The prevailing land tenure system in Ghana can be divided into two broad categories based on

land ownership, control and management. These are public land and customary land. Within the

public land tenure system, there are two variants. The first is state land, where the ownership,

control and management are vested in the President and held in trust for the people of Ghana.

The mechanism through which land becomes public under this variant is the State exercises its

constitutional or statutory power of eminent domain to acquire lands compulsorily from

customary landowners for the general public interest. The constitutional and statutory laws

governing the compulsory acquisition of land are article 20 of the 1992 Republican Constitution

of Ghana, State Lands Act, 1962, Act 125, and the Land Statutory Wayleaves Act, 1963, Act

186. The Public and Vested Land Management Division (PVLMD) of the Lands Commission

manages this type of public lands on behalf of the President. It is estimated that this type of

public land constitutes 18% of the total land in the country. The second variant of public land is

vested land. In this type, the landowner retains the customary ownership, but the State takes

control over the management of the land under special statutory intervention. The management

responsibilities of the state on this type of land include legal, financial and physical planning.

The mechanism by which land become vested in the state is by statutory law, the Lands

Administration Act, 1962, Act 123. It is estimated that this type of lands constitutes 2% of the

total land mass. The PVLMD manages this on behalf of the customary landowners. Thus, both

state and vested lands constitute about 20% of the total land mass of Ghana (Kasanga and Kotey

2001; Kasanga et al. 1996; Kasanga 2002).

Customary land constitutes about 80% of the total landholdings in the country. It comprises of

stool, skin, clan, family and individual lands. The stool and skin symbolize traditional political

institutions headships and socio-cultural orientations. It has the trait of communal ownership

with tenets of inter-generational ownership, and the allodial

title or freehold resides in the

community, clan or family. This allodial title is non-transferable (Ministry of Lands and Forestry

2003) and the community, clan or family head holds the land in trust for the entire community,

clan or family. Thus, land ownership, control and management in Ghana are in the hands of

stools, skin, clan or family heads who hold the land in trust and therefore manage it as a fiduciary

duty. This trusteeship role is recognized by the state through a constitutional provision. Article

38(8) of the 1992 Republican Constitution of Ghana states:

The state shall recognize that ownership and possession of land carry a social obligation

to serve the larger community and, in particular, the state shall recognize that the

managers of public, stool, skin and family lands are fiduciaries charged with the

obligation to discharge their functions for the benefit respectively of the people of Ghana

of the stool, skin or family concerned, and are accountable as fiduciaries in this regard.

(Republic of Ghana 1992, 33)

Stool and skin lands have been subjected to constitutional and legal restrictions in attempt to

limit trustees’ control especially over the disposition of land and revenues accruing thereof.

Article 267 of the Constitution stipulates that any grant of stool or skin land to non-member must

receive the concurrence of the Lands Commission. Also, concerning revenues accruing on such

lands, the constitutions mandates the Office of the Administrator of Stool Lands (OASL) to

collect all revenues, royalties, dues, fees for and on behalf of the stool or skin. However, there

are no restrictions on family, and individual lands as these lands are implicitly referred to in the

constitution as private properties. Family and individual lands constitute about 35% of the

customary land holdings (Ministry of Lands and Forestry 2003).

In conclusion, land administration and management are governed by customary practices and

enacted legislation in Ghana. Thus, the state, indigenous land governance institutions,

communities, families and individuals all have vested interest in land (Acheampong 2019; Biitir

and Nara 2016). The customary land sector is made of complex layers of ownership rights vested

in different stakeholders. In most instances, these complex layers are found in one geographical

location making it difficult to identify the rightful owners to deal in land transactions.

Methodology

The research sought to examine how land value capture instruments could be designed to raise

additional financial resources for MMDAs to augment the financing of public infrastructure

within GAMA. It examined the legal and institutional infrastructure for land value capture. It

further assessed the impact of urban infrastructure provision on land values in three purposely

selected urban sites in three municipalities. Lastly, the study analyzed how land value capture

Allodial title is the highest proprietary interest known to Ghanaian customary law, beyond which there is no

superior title. It is sometimes referred to as the paramount or absolute title. It can be likened to the freehold interest

in English common law system. Other lesser titles to or interest in or right over land are derived from the allodial

interest (Ministry of Lands and Forestry, 2003)

tools can be tailored to the context specificities of GAMA to raise additional financial resources

for MMDAs.

The study adopted the qualitative epistemological paradigm that recognizes the importance of

locating the research within a particular context. This context could include national, socio-

economic and historical. In Ghana, political, fiscal and administrative decentralization, urban

planning and land markets have occurred within the historical, national and socio-economic

contexts. The case study strategy of inquiry was used, and the multiple case study design was

employed. The case studies were selected based on a blend of projects that are implemented with

both intended and unintended objectives of capturing land value increment, in different sites

comprising different tenurial regimes (customary & statutory) and under different local

government administrative areas within the GAMA.

The study adopted a three-stage process in selecting and analyzing land value capture practices.

The first stage involved the selecting of local government authorities within GAMA. This stage

involved the contextual analysis of the current legal and institutional frameworks of local

governance and land use management, land development and infrastructure provision. This

formed the baseline analysis of the current situation. Data from secondary sources on trends of

spatial development, availability of peri-urban land, inner-city redevelopment opportunities in

GAMA, and the presence of real estate developers or land developers undertaking various

housing development activities were analyzed. The information led to the selection of suitable

local government authority. Besides, based on the baseline analysis, the land developers

functioned as land developers or real estate developers (Paulais 2012) and therefore, for the

purpose of this paper land developers or real estate developers are used instead.

The second stage involved the selection of land developers. Both public and private developers

were purposely selected based on: (1) history and scale of operation; (2) the context of land

developer establishment; and (3) location of land developer operations. Thus, one estate

developer was selected in each municipality (Table 2).

Table 2: Case Study Organizations and Local Government Administrative Areas

Land Development Agency

Nature of

Organization

Name of Urban

Site

Local

Government

Area

Tema Development Company

Parastatal

Community 25

Kpone-Katamanso

Municipal

Assembly

Ghana Airport Company

Parastatal

Airport City

Redevelopment

La Dade-Kotopon

Municipal

Assembly

Oak Villa Estate Company

Private

Developer

Abokobi

Ga East Municipal

Assembly

Moreover, land developers implementing the selected land development projects were profiled.

This entailed describing the project schemes, land values before and after the completion of the

projects, type and cost of urban infrastructure provided, and financing arrangements. It further

described in detail the implementation of land use scheme, its impact on land values and how the

estate developers capture potential or actual increases in land values, the availability and

ownership structure of the land, partnership models between land developers with original

landowners and the municipal government that has the official mandate for land use planning

were described.

The third stage involved the interpretative analysis of the first and second stages. This stage

entailed two levels of analysis. The first was the expert interpretation of the output of the

contextual and profile analyses of land developers. The practice of value capturing was analyzed

from two levels. The first level of analysis examined how local government in a selected

development scheme generally captures the land value increment. It examined the types of land-

based revenues currently available to local governments, the assessment and collection of these

revenues, and the capacities of the local government to assess and collect these revenues. It

analyzed the tools that local governments use to capture potential or actual land value increments

resulting from urban infrastructure provision. The second level of analysis within the expert

interpretative analysis was on how the land developers access land and finance land development

projects, what their strategies are for capturing land value uplift, and the lessons that can be

learnt from these land developers.

In addition, there was stakeholder interpretation of the findings. This involved a presentation of

the findings to the key stakeholders in a stakeholder dissemination workshop held at the Institute

of Local Government Studies, Accra on 8

November 2018. In all, 20 participants from the three

selected Municipalities and the three estate developers, representatives from Lands Commission,

Ministry of Local Government and Rural Development (MLGRD) and land development

projects beneficiaries attended the stakeholder dissemination workshop.

The stakeholders’ dissemination workshop was used to triangulate the findings. The workshop

had two sections. The first section included a presentation of the findings of the expert

interpretation. The second section included guided focus group discussion.

Profile of the Greater Accra Metropolitan Area (GAMA)

The Greater Accra Metropolitan Area refers to a broad administrative region, which originally

consisted of three MMDAs—Ga, Accra and Tema Districts (Grant 2009). However, due to the

proliferation of MMDAs, this area was fragmented from these three MMDAs in 2003 to 12 in

2012 (Cities Alliance 2017) and further to 22 in 2018 (Figure 6). GAMA in recent years has

undergone significant urban and economic transformation processes. This economic

transformation resulted from the globalization processes as well as deliberate efforts by City

authorities to reposition the city as a global city, or at least as a “world-class city-region” (Grant

2009; Otiso & Owusu 2008; World Bank 2015). The city authorities designed and implemented

the GAMA Strategic Plan. The design and implementation of the strategic plan was ambitious,

yet tangible outcomes are beginning to come to fruition. This is evidenced by improvements in

infrastructure, and significant investments in commercial, industrial, and residential real estate in

mainly the city center (Town and Country Planning Department 2017).

Over the years, the city has expanded in physical size. For instance, GAMA population grew

from 1,307,783 in 1991 to 2,513, 025 in 2000 and 4,429,649 in 2014 respectively (Angel et al.

2016). According to Angel et al. (2016), the corresponding growth in urban built-up area was

9,052 hectares in 1991, 29,165 hectares in 2000 and 52,847 hectares in 2014. Thus, during the

period between 1991 and 2000, the built-up area grew by more than three times and almost

double between 2000 and 2014. Therefore, the percentage annual change of total built-up area in

hectares was 4.6% between 2000 and 2014 (Angel et al. 2016). Meanwhile, the Town and

Country Planning Department estimates that the urban area increased approximately by 590km

from 447km

in 1991 to 1,036km

in 2017 representing a 132% increase (Town and Country

Planning Department 2017). The bulk of this increase comes from residential areas and

residential support services.

However, the management of the GAMA has not been coordinated and urban sprawl continues

unabated without limits being set to the physical size of the area. This has resulted in poor urban

connectivity and poorly planned transport infrastructure. According to the Town and Country

Planning Department (2017), an assessment of the implementation of the 1991 GAMA strategic

land use proposal indicates among other things the green belt system and open space areas in

many instances have been overtaken by urban development. The few green belts and open spaces

that are left are threaten by the continuing sprawl of the city. Besides, the Town and Country

Planning Department (2017) also notes that road development proposals contained in the

strategic plan were not implemented.

Figure 6: The Greater Accra Metropolitan Area (GAMA)

Source: Ghanadistricts.com

The inability of the city authority to implement land use proposals and effectively carry out road

development proposals within the GAMA region have resulted in poor local linkages. The result

of this is that, traffic volumes exceed the capacity and design standards of roads. Moreover,

regional connectors within the area lose their functionality in the urban core as local traffic spills

onto the regional connectors. The net effect is that there is bad land use and transport integration

in GAMA. Therefore, the positive relationship mostly associated with transportation

infrastructure and land values uplift cannot be realized in the midst of poor functionality of

current GAMA.

Land use and transport integration theories suggest that, to increase the functionality of the city

in general, individual elements of the city must support each other (Suzuki et al. 2013). Further,

the theories suggest that, on the one hand, land use development must respond to transportation

systems. The transportation system includes road infrastructure, access and visibility. On the

other hand, the transportation system must respond to changing land uses by increasing the

capacity of the system to meet land use requirements. These two must operate in equilibrium to

ensure good functionality of the city. However, current land use developments in GAMA have

outpaced the provision of effective transport systems and infrastructure. In addition, the

monocentric urban structure of GAMA has also contributed to the worsening traffic situation.

This has created a dysfunctional metropolitan area where there is an imbalance between land use

and transportation because the road infrastructure has not kept pace with land use changes

resulting in heavy vehicular and human traffic. The combined effects are that it is difficult, if not

impossible to assess the effects of transport infrastructure or the transport system on land values,

as travel time is affected by heavy traffic, which also affects the entire economy.

The government of Ghana attempted to address urban transport system and infrastructure

challenges. In 2007, the government initiated the Bus Rapid Transit (BRT) project under the

Ghana Urban Transport Project (GUTP). This project was jointly funded by the World Bank, the

Agence Francaise de Development (AFD), the government of Ghana and the Global

Environment Facility Trust Fund at the cost of $95 million (Appiah 2015). The Ministry of Local

Government and Rural Development, Ministry of Roads and Highways and the Department of

Urban Roads (DUR) are implementing the project. The project originally had five components to

address the objectives—first, the development and operation of a pilot BRT system. Second,

regulation of passenger transport in the participating MMDAs. Third, traffic engineering,

management and safety including the development of an Area-Wide Traffic Signal Control

Systems in Accra and Kumasi. Fourth, institutional development through support to all the

stakeholders in the project, and fifth, integration of urban development and transport planning

(Ghanaian Times 2018). The sixth component was later added on monitory and evaluation and

emergency works (Teko 2017).

However, the BRT infrastructure could not be completed due to the escalation of cost, which

surpassed the initial budget. Thus, the dedicated bus lanes have not been constructed, and

therefore, the BRT buses have had to use the existing infrastructure that is highly prone to heavy

vehicular traffic. Therefore, the government of Ghana restructured the project and opted for a

Quality Bus Service (QBS). This is because the infrastructure developed under the project did

not meet the full complement of proper BRT infrastructure. Hence, it could not be said to be a

BRT system. The QBS operation is currently grounded due to financial challenges. It is

important to state that the inability to design and implement a standard BRT system has affected

mobility within the GAMA. Nonetheless, no assessment was made to ascertain the impact of this

investment on land values along the corridors of the QBS infrastructure in the city. Therefore, it

is difficult to establish whether land values were impacted positively or negatively. The city

authority’s focus was on getting the system to work to improve urban transportation. The other

benefits including the potential of the project to affect land values positively so that, the

authorities can capture the values through LVC instruments to complement the financing of

urban transport infrastructure was not on their agenda. This has denied the city the opportunity to

assess and capture any positive land value uplift that is often associated with the BRT system and

the improved accessibility, and mobility of urban residents. Other countries like South Korea,

Columbia, Brazil and Australia have used the BRT system as a medium for designing land value

capture tools. These tools have been designed to capture the accessibility benefits of BRT

systems in these countries.

The Legal and Institutional Arrangements for Land-Based Revenue Generation

Land-Based Revenues Generated at the National Level

The state recognized that land is an important source of revenue. Therefore, the state has enacted

several laws that seek to raise revenue from land. From the national government level, the

following landed property related taxes are imposed under separate legal instruments and

institutions responsible for collection: (1) Gift tax; (2) Estate Duty and Inheritance Tax; (3) Rent

Tax; and (4) Capital Gains Tax.

Gift Tax

The Gift tax is governed by the Internal Revenue Act, 2000, Act 592 section 105. It is imposed

on the building of a permanent or temporary nature, land, shares, bonds, and other securities,

money, including foreign currency, business and business asset, any means of transportation

(land, air or sea), and goods and chattels. It is taxed at a rate of 5% under section 105 amended

where the value of the gift exceeds GHS50. The Ghana Revenue Authority (GRA) assesses and

collects the gift tax. This tax is payable by the donee on the total value of taxable gifts received

by that person as gifts within a year of assessment.

Estate Duty and Inheritance Tax

The Estate Duty Act, 1965, governs the estate duty tax. It is imposed on property that passes on

death. However, in 2015 this was replaced with the inheritance tax under the Income Tax Act,

2015, Act 896. Under this act, the person who inherits money or property or a levy on the estate

(money and property) of a person who has died pays the tax. Section 44 of the Act indicates the

tax is levied on the market value of the property at the time of realization. The act is silent on the

tax rate and any exemption. It must be stated that this tax is hard to implement because of the

nature of inheritance and how it is bequeathed. Most inherited landed properties do not go

through the formal processes of transfer, therefore, the GRA is unable to track it. These make it

difficult to estimate the magnitude of this type of tax. The GRA is responsible for the assessment

and collection of this tax.

Stamp Duty

Stamp Duty Act, 2005, Act 689 empowers the state to collect revenue through transfer taxes on

land that is sold and bought. Section 14 provides that an instrument or document of title shall not

be registered or entered in the registry of instruments that affects land or in the land title register

unless the instrument or document containing particulars of the title is stamped. The Act also

provides for ad valorem duty on mortgages and conveyances that require periodic payments of

money. Thus, the tax is imposed on the conveyance of land, transfers or assignment of land, the

gift of any landed property, leases and mortgages, debenture, guarantee, lien and covenant. In the

case of conveyance, transfer, assignment, or gift of landed property, the stamp duty rates include

0.25% where the amount for the value of sale does not exceed GHS10,000, 0.5% where the

amount exceeds GHS10,000 but less than GHS50,000, and 1% if the amount exceeds

GHS50,000.

The current institutional arrangement for collecting the stamp duty is a collaboration between the

Land Valuation Division (LVD) of the Lands Commission and the Ghana Revenue Authority

(GRA). The LVD assess stamp duty payable during the registration of land documents, collects

and pays same to the GRA, which is constitutional mandated to collect the stamp duty. Revenues

from stamp duty are paid into the consolidated fund of government for general purpose usage.

Capital Gains Tax

The Internal Revenue Act, 2000, Act 592, governs capital gains tax. It is a tax payable on

disposal of all forms of chargeable assets including freehold and leasehold property. The

chargeable assets are (1) buildings of permanent or temporary nature, and (2) business and

business assets including goodwill, land, shares in company and part of, or any right or interest

in land. The tax rate is 5% on the amount of gain accruing to a person in excess of the

consideration received over the cost base at the time of realization. The Ghana Revenue

Authority collects this tax on behalf of the government.

Rent Tax

Rent is considered as income arising from investment in landed property, and it is taxed under

the Internal Revenue Act, 2000, Act 592, other amendments such as Act 622, and Act 700, and

regulations LI 1675 and LI 1698, 2001. It is taxed at a rate of 8% on the gross rental income in

the year of assessment. The GRA valuation department staff assess the rent tax based on market

evidence and self-declaration. However, this tax is of limited application and mostly enforced on

institutional landlords like hostel owners or corporate bodies that pay rent for their staff. The

Ghana Revenue Authority collects this tax.

It is important to note that, these taxes are aimed at raising revenues from land and that they

accrue to the national government directly. These taxes do not directly result in arrangements

where urban infrastructure is funded directly by these revenues sources. Therefore, by the

technical definition of land-based financing, these taxes can be regarded as instruments for

raising land-based revenues. However, one cannot specifically say that these land taxes are

earmarked for urban infrastructure development and that these taxes are levied based on

increased land values resulting from investment in general infrastructure. Nonetheless, it suffices

to note that national government is responsible for the provision of major infrastructure

development be it road transport infrastructure, energy or water. But financing these major

infrastructures is still dependent on external financial support from bilateral and multilateral

development agencies.

Besides, the government established an Infrastructure Investment Fund in 2014 to mobilize

resources for infrastructure development. Section 5 of the Infrastructure Investment Act, Act 877

lists all the possible source of funds for the fund but no mention is made of land-based finance or

land value capture as a potential source. This presupposes that the land taxes are treated as

general revenues, and not tied to infrastructure provision.

Fiscal Decentralization and Land-Based Revenues

At the sub-national level, the 1992 Constitution provides the legal framework for governmental

fiscal transfer mechanism for financing the activities and functions of local authorities. Thus,

within the general principles of fiscal federalism, the Constitution of Ghana has established the

intergovernmental fiscal frameworks. The fiscal framework defines the assignment of revenues,

expenditures, financial autonomy and fiscal authority for local government administration in

Ghana (Fjeldstad 2015).

The legal framework for fiscal decentralization in Ghana is based on a number of acts and

regulations. These include the Local Government Act (Act 362) amended as Local Governance

Act (Act 936), District Assembly Common Fund Act (Act 455), and the National

Decentralization Policy and Action Plan. This legal framework is to ensure that local authorities

have a sound financial base with adequate revenue to carry out their functions. However,

according to Cities Alliance (2017), the ability of local governments to finance urban

infrastructure depends on (1) adequate Internally Generated Funds (IGF) or Own Source

Revenue (OSR) generation; (2) a well-structured and reliable intergovernmental fiscal transfer

framework; (3) financial autonomy and creditworthiness; and (4) ability to access financial

resources from the open market to raise additional funds for urban infrastructure investment.

Therefore, relative to land-based revenues at the sub-national level, the Constitution, the Local

Governance Act, (Act 936), and the Land Use and Spatial Planning Act (925) have made specific

provisions for land value capture instruments.

Stool Land Revenues

Article 267 of the Constitution recognizes the existence of stool land revenues from customary

land holdings as a major form of land-based revenue. Therefore, article 267 (2) sets up a

constitutional body, the Office of the Administrator of Stool Lands (OASL) to collect and

distribute stool land revenues in accordance with the constitutional formula. This institution is

responsible for the collection of land rents, dues, royalties, revenues or other payments whether

in the nature of income or capital for and on behalf of stool landowners

. Part of their mandate is

to set up accounts for every stool and pay all revenues into such accounts in accordance with the

formula set out in clause (6) of article 267 of the constitution. According to the formula, 10 per

cent of the revenue accruing from stool lands shall be paid to OASL as administrative charges.

Twenty-five per cent of the remaining revenue is paid to the stool through the traditional

authority for the maintenance of the stool in keeping with its status. Another 20 per cent of the

remaining revenue is paid to the traditional authority, and the other 55 per cent is paid to the

District Assembly where the stool land is situated.

Therefore, District Assemblies are also entitled to a share of the revenues accruing to stool lands.

This also constitutes land-based revenue for District Assemblies especially in jurisdictions where

there are stool lands. In the repealed Local Government Act, Act 462, stool revenue was captured

under miscellaneous revenues under schedule six of the Act. But the new Local Governance Act,

In large parts of southern Ghana, customary land is referred to as stool land in reference to the carved wooden stool

which is a traditional symbol of chieftainship and is believed to contain the souls of the ancestors.

Act 936, this is not mentioned as part of the revenues of District Assemblies. Though the Act

936 provides for fees and miscellaneous charges, there is no specific mention of stool land

revenue as part of the revenues of the District Assemblies. But it stands to reason that since this

provision is captured under article 267 of the Constitution, the local authorities still have the

right to receive stool land revenues from the OASL. Nonetheless, it is important to note that stool

land revenues fall under the general category of land-based financing for local government in

Ghana.

It is important to note that while the Constitution specifies the uses for such revenue in respect of

the OASL and the Stool, it is silent on how the revenues paid to the traditional authority and the

District Assembly are to be used. However, implicit in this constitutional formula is that the

portion given to the MMDAs is to be used for infrastructure development that enhances the value

of land within stool land areas. Nevertheless, the usage of the revenue over the years has been

left to the discretion of the MMDAs. This has raised serious issues, especially the portion of the

revenue paid to District Assemblies. Many authors have criticized beneficiary District

Assemblies for not utilizing these revenues for infrastructure development (Asiama 2006;

Kasanga and Kotey 2001; Mahama and Baffour 2009).

Development Charge

The Local Governance Act (Act 936), 2016 gives the local government authority to raise land-

based revenues from development charges as part of its IGF. Sections 92 and 209 of Act 936 are

specific on how development charges can be levied by MMDAs. Section 92 of Act 936 provides

that, District Planning Authority may levy development charges in respect of a permit to carry

out a physical development. This provision ties the levying of development charge with granting

the development permit. Again, sub-section (2) of section 92 states that development charges

shall be used for the provision of infrastructure and services. In addition, the provision draws a

distinction between levying development charges on infrastructure and services provided by the

District Assembly and that of other bodies charged with the responsibility for providing

infrastructure and services. sub-section (3) of section 92 of Act 936 specifically states that the

District Assembly shall rate and collect development charges to the exclusion of any other body

except that in a case where other specific bodies take responsibility for providing infrastructure

and services (Republic of Ghana 2016).

Implicit in section 92 of Act 936 is the recognition that the primary reason for levying

development charges is to recover the cost of providing infrastructure and services. Therefore,

the body or institution providing the infrastructure and services is entitled to levy and collect

development charges. The section further recognizes that there might be other bodies tasked with

the responsibilities of providing infrastructure and services within local authorities. Perhaps, the

entire section 92 is limited to the provision of off-site infrastructure and services that directly

affect physical development for which the permit is required. It also gives credence to the fact,

private real estate developers, parastatal land development agencies and national government

institution could provide infrastructure and services and therefore would be entitled to levy

development charges besides the local authority. This creates a window of opportunity for some

collaboration between the local authority and the body that is providing the infrastructure within

the authority’s jurisdiction.

Another level where MMDAs can levy development charges is where the local authority

undertakes land development activities. Section 208 of Act 936 gives local governments the

power to acquire and own immovable properties. Sub-section (2) of this section provides that

District Assemblies may acquire land, service the land, and re-allocate the land to a public or

private developer for development. In instances where the District Assembly acquires and

services land, section 209 of the Act enjoins the assembly to levy development charges on the

service land. It provides that, a District Assembly shall impose reasonable development charge

on a prospective developer when it allocates land that has been acquired and serviced by the

District Assembly. However, the section mandates the District Assembly to establish a separate

fund where such development charges shall be paid into for the purpose of further acquisition

and servicing of acquired land (Republic of Ghana 2016). In this case, the collection of

development charges is linked to the sales of serviced land. It is used to recover the cost of

servicing the acquired land. This means the establishment of the separate fund is like a special

purpose vehicle that ring-fences the development charges collected to recover and further extend

the acquisition and servicing of land by the District Assembly.

This section 209 of Act 936 recognizes the role of local government in land development and the

requisite instrument for financing such land development activities and related urban

infrastructure. It places restrictions on how developments charge levies on land development

schemes undertaken by the district assembly are utilized. Furthermore, this section encourages

local government to re-channel such levies towards further acquisition and servicing of land for

public and private development.

Sections 208 and 209 also clearly outline three purposes of development charges. These are (1)

to recover the cost of bulk and connector infrastructure associated with a development; (2) to

contribute to financing new or additional infrastructure; and (3) to offset the impact of

development on the respective district’s infrastructure network. These provisions are consistent

with international literature on development charges as a one-off fee instrument (Berrisford,

Cirolia, and Palmer 2018; Connally and Wall 2016; Peterson 2009). The provisions have covered

broad areas levying development charges, and if effectively implemented, they could be a great

source of monetized land value finance for MMDAs. African Centre for Cities (2015) has

indicated that development charges have great potential for success in most sub-Saharan African

cities bearing in mind the realities of these cities. Berrisford, Cirolia and Palmer (2018),

however, echoed that the implementation of development charges requires a consistent and

transparent formula for calculating the impact of development on the infrastructure network of

MMDAs. However, the legislative provisions on development charges in Ghana has not

prescribed the formula on how to calculate the impact of such development. The Ministry of

Local Government and Rural Development has issued guidelines for charging fees and granting

licenses and permits for MMDA. But these guidelines fall short of providing a formula for

calculating development charges.

Development or Building Permit Fees

Act 936 has also provided for charging of development and building permits on all land

development related activities. This is another avenue for district assemblies to raise revenues

from land-related activities. Sections 93 and 106 of Act 936 enjoin local government authorities

to grant development and building permits to prospective developers. Local government

authority charges a fee for granting these permits according to section 141 of Act 936.

Development permits constitute a significant portion of local government own source revenues

in Ghana. However, the development permitting system under Act 936 is aimed at controlling

development. A development permit is a way of enforcing zoning regulations and ensuring

compliance with the standards set out in the National Building Regulations L.I 1630. It falls

short of being a tool of land value capture through the sale of development rights. A typical sale

of development rights as a tool of land value capture grants developers the right to build at

greater densities than would normally be allowed by the zoning and building regulations

(Peterson 2009 and Smolka 2013). Therefore, unlike a typical sale of development rights where

the local authority sells construction permits to developers in certain growing areas of the city,

the current development permitting system does not have area targets. Nonetheless, development

or building permit as recognized by the statutes in Ghana falls under the general land-based

financing instruments.

Betterment Levies

Section 102 sub-sections 1 to 4 of Local Governance Act, Act 936 and section 111 of the Land

Use and Spatial Planning Act, (2016), Act 925 have made provisions for the recovery of

betterment by local authorities. The principle of extracting betterment is traceable to the colonial

period when Ghana was under British rule (Agemang and Morrison 2017). The British enacted

the Town and Country Planning Act, CAP 84, 1945. This Act made provision for the recovery of

betterment. Subsequent legislation on local government has repeated this provision with very

little modifications. Thus, section 102 of Act 936 provides that:

A District Planning Authority shall recover from a person whose land is increased in

value, a determinable percentage of the amount of the increase where that person sells or

otherwise disposes of the land; The determinable percentage shall be payable where the

provision of a plan or the execution of public works or a decision or action of a District

Planning Authority increases the value of land within the district; The District Planning

Authority shall act on the advice of the Valuation Division of the Lands Commission; A

financial gain on urban land transaction shall be liable to betterment charges. (Republic

of Ghana 2016, 57)

The provision for betterment levies in Act 936 covers various aspect of land value increment.

First, value increment resulting from the implementation of a plan. Second, value increment

resulting from the execution of public works in urban infrastructure development. Third, value

increment due to changes in land use regulation and; fourth, value increment resulting from

general economy and population growth (Ingram and Hong, 2012; Paulais, 2012; Smolka, 2013).

These various aspect of betterment can be classified into two types: (1) development-rights based

betterment where the land value rises due to land use regulation decision that applies directly to

the specific land parcel and raises its value; and (2) infrastructure-based betterment where land

value rise is attributed to the positive externality from a local authority decision to executive

public infrastructure works such as roads, parks and other services (Alterman 2012).

Nonetheless, Alterman (2012) warns that it is difficult to implement both types of betterment

because of the practical difficulties associated with attribution effects, difficulty in determining

the geographic range, and estimating the time frame to levy the charge. However, the Land Use

and Spatial Planning Act, Act 925 indicates that the Land Use and Spatial Planning Authority

shall make regulations prescribing the compliance of charges for betterment. Section 111 of the

land use and spatial planning Act 925 enjoins the District Planning Authority to act in

accordance with the regulations by publishing the applicable settlement charges for such an area

in a daily newspaper of national circulation. Although, these regulations have not been made yet,

the importance of publishing the betterment charges is to ensure transparency and public

awareness of the need for MMDAs to recover betterment.

Moreover, the land use and spatial planning Act 925 makes provision for charging betterment on

the financial gain resulting from an urban land transaction. The Act provides that the District

Planning Authority shall consult the Valuation Division of the Lands Commission for advice on

any increase in the value of the land. The Valuation Division of the Lands Commission is also

well-equipped with the expertise to be able to determine financial gain on the urban land

transaction. Therefore, charging betterment on financial gain on urban transaction component

has high potential for success given the active nature of land markets development within

GAMA. However, the success rate will depend on the nature of collaboration between MMDAs

and the land sector agencies.

Property Rates

Another legal provision that empowers District Assemblies to raise revenue through property

rating is enshrined in sections 145-169 of the Local Governance Act. Section 145 makes the

District Assemblies the rating authorities in their respective jurisdictions. According to section

146 of Act 936, District Assemblies may levy sufficient rates to cover that part of expenditure

for which the rate is levied. The Act specifies the rating method to be used and distinguished

between general and special rates that can be levied on both immovable and movable properties.

The general rate applies to the whole district while the special rate is applicable to a specified

area in the district. The general rate may be a property rate on landed property payable by the

owner of the property, or it may be levied on personal possession.

Section 146 of Act 936 further clarifies that rateable premises shall be limited to buildings,

structures, and other structural developments. It states that the rateable values of buildings and

structures shall be the replacement cost. This implies that the rateable value applies to buildings

and structures. It does not include the land. This method of estimating property rating excludes

any land value increases attributed to public works or other infrastructure development. It

considers instead property values or buildings and structures value appreciation that is attributed

to the execution of public works by the District Assembly or the benefits that accrue to landed

properties because of the District Assemblies development activities. In essence, the benefit

principle of taxation is applied in the estimation of the rateable values.

The institution that is responsible for the valuation and determination of the rateable values for

property rating purpose is the Land Valuation Division (LVD) of the Lands Commission. Section

146 clause 8 of Act 936 gives this power to the Lands Commission through its Land Valuation

Division to either determine the rateable values of all rateable properties or appoint a valuer to

determine the rateable values for District Assemblies. In addition, section 22 (d) of the Lands

Commission Act, 2008, Act 767 gives the Land Valuation Division function of preparing and

maintaining valuation list for rating purposes. Rating valuation is further guided by the

Immovable Property Rate Regulation 1975, LI 1049. These legal provisions imply that District

Assemblies cannot choose an independent valuer or engage valuation services consultant to

undertake property-rating valuation without the approval of the Lands Commissions.

Technically, the MMDAs must apply to the LVD for the valuation of properties for rating

purposes. Then, the LVD will evaluate its staff strength and either undertake the valuation

themselves or appoint a private valuation consultant to undertaking the valuation.

In-Kind Contribution

There has been limited application of In-Kind Contributions where developers provide some

infrastructure as a condition for approval of their development schemes by the District

Assembly. For example, La Dade Kotopon Municipal Assembly indicates that they have used In-

kind Contribution as a tool on a very limited scale. The Assembly requested Gold Key

Developers to construct about 0.5 km road from Morningstar Junction to link the Ghana Fire

Service Road, which fronts the developer’s properties. This was a condition for the developer to

be granted development permit. In addition, Kpone-Katamanso District Assembly also indicated

that they had once asked a developer to construct a link road in front of his development before

the permit was granted. Ga East Municipal Assembly also requested the Oak Company to tar the

portion of the road that fronts their gated community before development permit was granted.

Though, there is no legal provision supporting In-Kind Contribution, but MMDAs are beginning

to use this tool to improve infrastructure provision within their jurisdictions. The current

application of In-Kind Contribution involves negotiations and trade-offs between the MMDAs

and private developers. The limited cases of In-Kind Contribution involved MMDAs forgoing

some revenue from development permits in exchange for some type of infrastructure to be

provided by the private developer.

The Contribution of Land-Based Revenues to Total IGF

The land is an important source of revenue to MMDAs. Land-based revenues sources that have

contributed significantly to the internally generated funds (IGF) of the selected MMDAs include;

property rates, building permit fees, rents from municipal land and properties, and ground rents

from stool lands. Ground rents from stool lands are, however, limited to MMDAs that have

traditional landholdings vested in stools. Thus, La De Kotopon and Kpone Katamanso

Municipalities have some areas where the land is held by stool in trust for the people of that

particular area. Therefore, they receive ground rents from the Office of the Administrator of

Stool Lands (OASL) annually as additional revenue. For example, Kpone Katamanso received

GHS100,000 (US$20,000) and GHS150,000 (US$30,000) as stool land ground rents in 2016 and

2017 respectively. Thus, municipalities that have a large area of stool land benefit from this type

of revenue. The good thing about this type of revenue is that the Municipalities do not incur any

transaction cost in collecting the ground rents. By the constitutional arrangement, OASL collects

the ground rents and distribute it in line with the constitutional formula.

Thus, as can be observed from Table 3, land-based revenues have contributed significantly to the

total IGF of the study municipalities. Between 2014 and 2017, the average contribution of land-

based revenues for Ga East Municipality was 32%. It is doing well in land-based revenue

generation relative to the other two municipalities even though it does not benefit from ground

rent on stool lands. For the three municipalities, the land-based revenue does not include sources

such as development charges and betterment levies. Perhaps, if these municipalities had the

ability to implement these additional revenue sources, the average percentage could go up

beyond current levels.

Table 3: Land Base Revenue to Total IGF

Municipality

MMDAs Land Revenue* as a Percentage of

Total IGF

Average per

cent

2014

2015

2016

2017

La Dade

Kotopon**

30%

20%

33%

31%

28.5

Kpone

Katamanso**

20%

25%

23%

30%

24.5

Ga East

25%

24%

40%

39%

32.0

* Land Revenue include property rates, building permit fees, and rents

**Land Revenue include property rates, building permit fees, rents and ground rents from stool lands

Implementation Challenges of Land Value Capture Instruments

From the discussion in section 5.2, it clear that development charges, betterment levies, property

rates and In-kind contributions are the land value capture instruments that MMDAs currently

implement. These are consistent with extant literature, however, the implementation of these

instruments in the selected MMDAs are faced with local institutional and socio-cultural

challenges. Stool land revenue and development permit fall under the general land-based

financing instruments. Therefore, the discussion on the implementation challenges of land value

capture instruments is limited to the development charges, betterment levies, property rates and

In-kind contributions.

Technical and Administrative Challenges for Assessment and Collection

There are practical and administrative challenges in the assessment and collection of the

monetized values of the value capture instruments. The challenge of assessment is inextricably

linked to the conceptualization of each instrument. For example, the legislative provision on

betterment levy requires MMDAs to charge betterment on land value appreciation attributed to

the provision of a plan or execution of public works or a decision or action of a District Planning

Authority. The difficulty arises on how to determine the value appreciation that is solely

attributed to the preparation or implementation of land use plan, or the execution of public

works. Therefore, the assessment for betterment levy requires a scientific approach that can

demonstrate that value appreciation is directly linked to the actions or decisions of the respective

MMDA. However, over the years, MMDAs have not been able develop an assessment

framework to assess the monetized values from betterment, because of the practical challenges of

the betterment assessment. It must be noted that this challenge is not peculiar to local authorities

in Ghana. Alterman (2012) reports of a study conducted in 2010 in 14 countries within the

OECD region on the international experiences with the implementation of betterment capture.

The reports indicate that only four countries have had experience with direct betterment capture

instruments. Alterman (2012) concludes that the betterment capture instrument is of limited

application because of the practical difficulties associated with attribution effects, difficulty in

determining the geographic range, and estimating the time frame to levy the charge. Other

writers like Walters (2012), and Bird (2000) have reiterated the point that betterment levies are

not widely used because these implementation challenges. However, extant literature often cites

Columbia as an example of the implementation of a technically designed and functioning

betterment capture tool (Smolka and Amborski 2000; Smolka and Furtado 2002). Nonetheless, in

the context of Ghana, certain aspect of the provision on betterment especially the charge of

betterment on financial gain resulting from urban land transactions is feasible to implement. This

will be discussed under the section on strategies for implementation.

Implementation of development charges has been constrained by the inability of MMDAs to

determine a formula that is consistent and transparent for calculating the impact of developments

on infrastructure network. The determination of a formula that is consistent and transparent

requires clear policies on district infrastructure planning. The local authority should be able to

estimate the capital costs of additional infrastructure based on their infrastructure plans. From the

infrastructure plans, the respective MMDA can estimate a levy rate for each prospective

developer seeking a development or building permit. Thus, the calculation of the development

charge levy is quite simple and can easily be done. However, the MMDAs have not been able to

come out with formula to enable them to levy development charges. One of the reasons is that

the municipalities have not been able to provide the requisite infrastructure and services over the

years, and therefore, it is difficult to convince property developers and individual property

owners or even prospective property developers that the levying of development charge will

improve the huge infrastructure deficits in their respective jurisdictions. Even with property

rates, MMDAs are already struggling to convince property owners to pay. Over the years, they

have not been able to provide the needed infrastructure in their respective areas. Residents

continue to confront officers of the municipalities on why they are collecting property rates when

their roads and other basic services continue to be in deplorable states.

Property rates and In-kind contribution have also had technical and administrative challenges

with implementation. The problem with property rates is not necessary assessment but the

financial resources to employ technology to digitize cadastres and pay for the cost of valuation

services. There are clear guidelines in the law on the method of assessment. However, billing and

collection have proven to be difficult. This difficulty arises from an inadequate and poor street

address system. The poorly designed street address system makes is difficult to locate properties

and deliver the bills to the owners. In-Kind contribution application is very limited. There are

currently no clear-cut administrative guidelines on where it is applied. Application and

enforcement are done on a case-by-case basis, usually at the discretion of the district engineers

and physical planners. African Centre for Cities (2015) and Berrisford, Cirolia and Palmer

(2018) have made similar observation about In-kind contribution in Sub-Saharan African cities.

Knowledge Gap and Lack of Awareness

There is a knowledge gap and lack of awareness about the concept of land value capture in

general among the principal revenue mobilization staff interviewed in the selected MMDAs.

These staff include physical planners, budget officers, and municipal engineers. Most of them

have not had prior knowledge of the concepts, principles, and purposes for land value capture

either through their education, training, or professional practice. Some of the staff have only had

an encounter with instruments of land value capture when they were employed at the MMDAs

and do not really understand the rudiments of key concepts and tools. Thus, the principal revenue

mobilization staff have a narrow understanding of land value capture and its instruments. For

example, most understanding of the concept is limited to recovering the cost of providing

infrastructure such as roads and other social services. Physical planners, municipal engineers and

budget analysts of the three MMDAs showed inadequate knowledge of the tools and the

implementation strategies including the purpose of these instruments and methods of assessment,

especially with development charges and betterment levies. Therefore, over the years the

MMDAs have focused their attention on property rates and building permits. Although, the local

governance law ties the levying of development charges to the granting of a development permit,

the MMDAs grant development and building permits on a regular basis but they are unable to

levy development charges.

The apparent inadequate knowledge about the other tools for land value capture has led to a

widely held perception that the only way to recover infrastructure cost is through property rates

and building permit fees. The revenue mobilization staff are of the general opinion that property

rates and building permit fees can also capture property value appreciation due to infrastructure

developments. Municipal engineers and physical planning officers of the MMDAs understand

the relationship between infrastructure provision and its impact on land values quite well. They

indicated that providing infrastructure and services enhances property values and entices

prospective developers to build in the areas that have this infrastructure. They are therefore

convinced that property rates and building permit fees are the ways to recovering the cost of

providing these services. Moreover, the inadequate knowledge of land value capture tools has

also contributed to their lack of awareness and appreciation of various approaches to recover cost

and capture land value increment. Clearly, development charges are intended to recover cost and

offset the impact on public infrastructure while betterment charges are aimed at capturing parts

of the unearned increment in land values. However, it is important to also state the MMDAs over

reliance on property rates and permit fees stems from the fact that these instruments, especially

the permits, are relatively easy to assess and collect, and quite accepted by the public.

Notwithstanding the above, it is important to note that under the current property rating regime in

the country, property rates can neither achieve the objective of capturing the unearned increment

in land and property values nor be used as an instrument for recovering cost of public

infrastructure. For example, the method of valuation of properties for rating purposes is not

based on market factors. It is based on the building area, and the building attributes such as

quality of materials used and the nature of finishing. Therefore, the value of the improvement

does not include the component of public infrastructure and does not reflect changes in property

values due to the impact of infrastructure services. Walters (2012) alluded to this by echoing that

the use of property taxes or rates to capture value is impaired because the assessment and

valuation are not based on market factors. Smolka and Furtado (2002) have also highlighted the

notion that urban property is perceived not to be sufficiently taxed through the property taxation

or rating. This probably explains why Act 936 has made provision for betterment levies and

development charges that are more direct in exacting land and property values uplift due to

infrastructure service provision.

The knowledge gap and lack of awareness of land value capture instruments is a general problem

that affects many municipalities beyond the selected MMDAs. The Ministry of Local

Government and Rural Development (MLGRD) is the supervising ministry for MMDAs. An

interviewee from the Infrastructure and Projects Department of the Ministry highlighted the

dearth of knowledge on land value capture mechanisms. The interviewee indicated that the

Ministry sought to create awareness of the concepts of LVC in August 2015 by organizing an

Urban Forum on the subject. According to the interviewee, the ministry was motivated by

research findings of the African Centre for Cities (2015) report on “land-based financing for

urban infrastructure in Sub-Saharan African Cities.” Several stakeholders including the TDC,

Airport Company, Land Valuation Division were invited and the made presentation on their

respective experiences on land value capture. However, since then, little has been done by the

MLGRD to create more awareness and promote the implementation of existing land value

capture tools. Besides, another interviewee from the Fee-Fixing Department of the MLGRD

indicated that the Ministry has provided adequate guidelines for charging fees and granting of

permits. However, concerning specific guidelines for the implementation of land value capture

instruments, the Ministry only specifies that of property rates and building permits.

Lack of Initiative and Social Entrepreneurial Mind-Set

The implementation of development charges has also been a challenge especially those

associated with the acquisition and servicing of land by MMDAs. Section 208 of Act 936

provides that District Assemblies can acquire land in the district or outside of the district as long,

as it considers it necessary. However, MMDAs have not utilized this provision because the

MMDAs do not own public lands and therefore have to purchase land from customary

landowners. Purchasing and servicing land require substantial amount of money and the

MMDAs are unable to raise the needed funds to undertake such land development projects.

While this is true to some extent, the other reason is that Assemblies have not averted themselves

to the opportunities for raising more revenues through the acquisition and servicing of land. They

do not appear to be willing to venture into new areas of raising additional funds. The fact is that

MMDAs do not have the entrepreneurial mindset in line with the emerging discourse on urban

governance, where entrepreneurialism is now seen as a critical component in developing

innovative solutions to urban problems (Fuseini 2016; Obeng-odoom 2017). Private real estate

developers do the acquisition and servicing of urban land in the study Municipalities without the

Municipalities coordinating their activities. This is a missed opportunity where municipalities

could partner with private developers to acquire and service urban lands so as to be able to levy

development charges. Such partnerships could be seen as MMDAs social entrepreneurial

projects.

Inadequate Staff and Expertise

Assessing land and property value appreciation requires the understanding of critical components

of land value creation. It requires an appreciation of the concepts of capturing land values,

institutional drive and desire for using land values as an alternative or additional revenue

sources. In addition, the quality of the assessment process also depends on organizational or

institutional orientation of the processes and requirement for assessing land value before and

after of any provision of infrastructure service. These require human, technical and financial

resources. Human capacity refers to the number of staff with requisite skills and competencies to

perform dedicated tasks. It requires continuous training and development.

The municipalities under study have the requisite staff and expertise in terms of mobilizing IGF.

The Works Department of the municipalities play a critical role in raising IGF. This department

consists of the Engineers, Quantity Surveyors, and Building Inspectors. Building Inspectors

enforce development controls. The three municipalities had highly qualified staff with requisite

expertise in general revenue generation. The only problem was that the number of building

inspectors in each case was not adequate.

However, it has to be noted that value capture instruments such as betterment levies and property

rates require specialist knowledge. That is why the local government law has given this function

to the LVD of the Lands Commission. Nonetheless, it was revealed that the Valuation Division

did not have adequate staff. The Rating Department of the Valuation Division had an estimated

number of 30 Rating Valuers for the whole country. This number is supposed to provide rating

valuation services the 254 MMDAs. Though, the LVD can appoint a private valuation consultant

for MMDAs, they assert that very few private valuation firms that have the capacity in terms of

human and logistics to undertake rating valuation successfully. Besides, the Valuation Division

especially the Rating Department is supposed to be decentralized with at least every district

having a Rating Officer. This has not been achieved. Over the years the focus of the LVD has

been to ensure that every Metropolitan and Municipal Assembly has a Rating Office with at least

one Rating Officer. However, due to inadequate staffing, most municipal Assemblies do not have

functional Municipal Rating Offices. For example, La Dade Kotopon Municipal Assembly had

one Rating Officer, Ga East and Kpone Katamanso Municipalities do not have Rating Officers.

The rationale for engaging Rating Officers at the MMDAs level is to ensure that these officers

will be responsible for supplementary rating valuation for new properties so as to update the

valuation list on annual basis. These officers cannot undertake major rating valuation

assignment. Thus, even where there is a Rating Office in the Municipality, major rating

assignment is handled by the National Rating Department of the Land Valuation Division at the

Head Office in Accra.

Inadequate Collaboration Among Inter-Governmental Agencies

One of the challenges with the implementation of a betterment levy is the institutional

arrangement for its assessment. For example, to determine betterment, there must be a baseline

valuation before the decision to provide the infrastructure is even announced to the public. The

government agency vested with the powers to provide this infrastructure must communicate to

the Land Valuation Division of the Lands Commission to conduct this baseline valuation. Also,

when the proposed infrastructure is completed, MMDAs or that government agency must inform

the LVD so that, they can determine the land value appreciation and advise the local authority

appropriately. However, there is inadequate collaboration among governmental agencies

providing infrastructure at various levels, the MMDAs and Land Valuation Division. For

example, most urban road projects are awarded and executed by the Ministry of Roads and

Highways through the Department of Urban Roads sometimes without the knowledge of the

respective MMDAs. The LVD is only contacted where there is the need to assess compensation

payable to affected property owners in the project. Even in instances where the MMDAs plans

and executes social infrastructure projects, the LVD is not informed unless there is the need for

compensation. The inadequate inter-governmental agencies collaboration is also inextricably

linked to the knowledge gap on land value instruments. This is because if the LVD can undertake

compensation valuation for main urban roads or large infrastructure projects, then this creates

opportunities for the LVD to equally undertake baseline valuation of properties for betterment

purposes. But due to the inadequate knowledge and lack of awareness of land value capture

concept, this opportunity is not tapped.

Furthermore, the provision of recovery of betterment indicates that any financial gain from any

urban land transaction must be levied to extract the gain. Thus, the determination of financial

gain on urban transaction requires good and accurate land registration database. However, within

the institutional arrangement of land administration, municipalities are not in the purview. Urban

land transaction concerning land purchase, registration and assignments are the preserve of the

Lands Commission and MMDAs can only collaborate with the Commission to access such data.

There is no consultation with municipalities in land registration matters, and therefore it is

difficult for these municipalities to track any financial gain in urban land transactions. There is

generally lack of collaboration between the MMDAs and the Lands Commission concerning land

registration data access. Also, MMDAs fail to collaborate with the Commission to understand

the nature of urban land markets within MMDAs jurisdictions. For example, an official of the

Lands Commission bemoaned the ineptitude of MMDAs to consult the Commission on general

land matters during the stakeholders’ dissemination workshop. In the case of recovery of

betterment on financial gain of urban land transaction, the Lands Commission is in a better

position to collect such levies for and on behalf of Municipalities. The Lands Commission

handles the registration of deeds on land assignment, and during the process, they are able to

assess the market value of the land if they have reason to believe that the amount stated in the

deeds is under-declared.

Property rate administration is entirely the preserve of local authorities. However, in terms of

assessment and revision of rateable values of properties, the Rating Unit of the Land Valuation

Division of the Lands Commission is responsible. But MMDAs must pay the full cost of the

valuation services. Inadequate collaboration, engagement, and lack of trust between MMDAs

and LVD have led to a situation where the LVD insists on the full payment for the valuation

services before they release the valuation list. This legal and institutional arrangement for

property rate assessment is making it difficult for MMDAs to have a free hand to operate in the

assessment of rateable values. This has resulted in a situation where MMDAs do not assess and

reassess their properties as required by law. MMDAs have complained about the cost

implications of valuation services and those of them that do not have the wherewithal to engage

the LVD have resorted to a flat rating system. For example, Kpone Katamaso Municipal

Assembly relies on a flat rate system of levying property rates because they do not have rateable

values. Effective collaboration between the MMDAs and LVD can result in valuation cost to be

spread over a period of time and recovered through rates collection.

However, it is quite strange that the MMDAs have not been able to collaborate effectively with

the LVD, Lands Commission and other government agencies providing urban infrastructure in

their revenue mobilization attempts relative land value capture instruments.

There is enough evidence to suggest that, some of the study MMDAs have collaborated

effectively and partnered with private agencies in property rate billing and collection, and other

services such as waste management. For example, Ga East and La Dade Kotopon Municipalities

collaborated and partnered with Subah Ghana Company for financial support for valuation

services under an arrangement where the financial support will be recovered through property

rates collected. Subah Ghana supported Ga East and La Dade Kotopon Municipalities with

US$57,400 and US$43,300 respectively. The valuation captured 82,923 and 15,906 properties

for Ga East and La Dade Kotopon Municipalities respectively. Ga East Municipality is also

collaborating with Atomz Ghana Limited for property rate collection. Perhaps, the apparent

ineffective collaboration between the MMDAs and other government agencies might be due to

bureaucracy and unnecessary power struggles and lack of incentive.

Inability to Enforce Land Use Regulations

The MMDAs have been severely criticized for their inability to effectively implement land use

regulations. These reasons are summarized as inadequate staff capacity and expertise, general

ineptitude, political interference, and cumbersome bureaucratic administrative processes

(Acheampong 2016; 2019; Arku et al. 2016; Cities Alliance 2017). However, the complex land

tenure system especially within the GAMA has also frustrated the efforts of MMDAs in

effectively implementing land use regulation. The Greater Accra Metropolitan Area has a

complex land tenure comprising of public, stool, family and individual lands. This tenure

arrangement raises a number of implications for land use planning and the ability of MMDAs to

implement land value capture instruments. First, there is a clear separation between land

ownership and the power of determining or allocating land uses through land use planning within

the area. The MMDAs and TCPD have statutory powers to determine the uses of public, stool,

family, and individual lands. For public lands where ownership and management are preserved

through the Lands Commission or through parastatal institutions, land use planning is usually the

first step to preparing bare land for development. A case in point is the Tema Acquisition Area

where the TDC manages the land. It was observed that land use planning often preceded physical

development.

However, under the customary land tenure arrangement, MMDAs and TCPD cannot make

planning decisions on customary lands without extensive consultation and collaboration with the

landowners. The level of consultation and collaboration is weakened in the face of rapid

urbanization where there has been an upsurge in demand for peri-urban lands within GAMA.

Landowners motivated by this demand often allocate their lands without recourse by MMDAs

and statutory planning authorities. A physical planning officer from one of the MMDAs noted

that some landowners have engaged private surveyors and planners to subdivide their lands into

residential plots in some new developing areas of the municipality. According to the respondent,

some landowners use bulldozers and other earth machines to clear identifiable supposed streets

and start selling the land without recourse by the assembly. This assertion implies that the

MMDAs have limited control over the planning of customary land areas. However, this is not

peculiar to GAMA only, but the nature of the complexity of land ownership within the area

makes this distinction difficult for coordinated land use planning. Similar findings from Yeboah

and Obeng-Odoom (2010), Yeboah and Oppong (2015), Akaateba et al. (2018), and

Acheampong (2019) highlight the powerlessness of MMDAs concerning land use planning in

Kumasi, Tamale and other urban areas.

In addition, where landowners have prepared land use schemes and are given approval by the

MMDAs, the implementation and enforcement of those plans have been compromised because

landowners and developers are left to implement the plans. Landowners sell building plots and

purchasers are required to apply to the MMDAs for permit to develop. Therefore, if the

purchaser does not apply to the MMDAs for permit, the Assembly cannot regulate or control that

development. One physical planner noted that landowners illegally rezoned areas that are marked

for public infrastructure provisions into residential plots. This compromises the spaces available

for the installation of urban infrastructure. But Akaateba et al. (2018) and Acheampong (2019)

found that some MMDAs planning officers connive with landowners to rezone public amenity

spaces and make an illegal modification to existing local land use plans for their own parochial

interest. Therefore, the nature of the land tenure dynamics and the ineptitude of MMDAs have

affected the implementation land use schemes.

Moreover, the development control regulation requires that an applicant for development permit

must have land title. It is the first hurdle for prospective developers to ascertain their proof of

ownership of the land. This is contributing to delays in granting building permits. The process of

registering land title itself is cumbersome often involving many steps such that prospective

applicant must visit the registration office regularly. Added to this is that within GAMA, there

are only two office locations where the land title can be registered, the Lands Commission in

Accra and its branch office in Tema. Therefore, a prospective developer must travel to one of

these locations to be able to register their land. This increases cost, time, and even stress

(Acheampong 2019). Thus, the processes involved in land registration and institutional

inefficiencies have created a perception in the minds of prospective developers that ‘it is “more

convenient” and ‘less costly’ to develop without a permit than to follow these official processes

(Arku et al. 2016). This situation leads to high transaction cost in building application and

approval processes and has contributed to the high incidence of non-compliance to development

regulations. A participant in a focus group discussion indicated that the nature of the permitting

procedures had compelled many individual developers to construct their houses in the night

especially in some peri-urban areas of GAMA. These concerns are reflected in the World Bank

reports on doing business, Ghana’s performance on construction permitting and land title

registration has been fluctuating over the period of five years (Table 4).

Table 4: Construction and Property Registration Performance

Item

2014

2015

2016

2017

2018

Dealing with construction permit

(rank)

159

106

132

117

131

DTF score for dealing construction

permit (0-100)

69.4

62.32

65.34

61.90

Number of procedures

Time (days)

246.5

201

216

170

Cost (% income per capita/warehouse

value)

259

2.0

1.8

2.9

5.4

Building quality control index (1-15)

8.0

9.0

Registering property (rank)

119

DTF score for registering property (0-

100)

62.12

65.99

55.50

Number of procedures

Time (days)

Cost (% of property value)

1.1

1.2

6.2

Quality of land administration (0-30)

Source: (World Bank 2017, 2015a, 2016, 2018, 2014)

Tema Development Company (TDC), Community 24 Case Study

Overview

TDC is a real estate development and management company currently operating in 25

communities in the Tema Acquisition Area (TAA) (Figure 7). It is a parastatal land development

organization that was established in 1952 as Tema Development Corporation under the Tema

Development Corporation Ordinance 1952 (No. 35). TDC operated on the mandate provided by

Tema Development Corporation (Amendments) Instrument, 1989 (LI. 1468) which set out the

Corporation’s functions.

Figure 7: Tema Acquisition Area

However, the 1952 Ordinance establishing the TDC has gone through a series of amendments. In

January 2017, the Government of Ghana granted approval for the conversion of TDC to Public

Limited Liability Company. TDC was converted to a Public Limited Liability Company with an

enhanced mandate. This mandate expanded the operational and geographical scope beyond the

TAA. Its new objectives are:

a) to carry on the objectives of Tema Development Corporation as per the Tema

Development Corporation Instrument 1965 (L.I. 469) as amended by the Tema

Development Corporation (Amendment Instrument), 1989 (L.I. 1468);

b) to acquire land both in and outside Ghana for real estate development and management;

c) planning, development and construction of towns and cities in and outside Ghana;

d) development and management of commercial and industrial areas;

e) consultancy services

f) to partner and or collaborate with other real estate developers (both local and

international) and agencies for the provision of the above services;

g) investment in real estate concerns; and

h) any other activities incidental to the attainment of the above-stated objectives.

TDC operates under the State Enterprises Commission. This Commission provides the rules and

regulations as well as sets out the operational targets for the Company. The Ministry of Works

and Housing supervises the activities of TDC directly. Four municipalities fall within the TAA,

namely Tema Metropolitan Assembly, Ashaiman Municipal, Kpone-Katamanso Municipal, and

Tema West Municipal. The entire TAA is currently subdivided into 25 residential communities.

Community 24 is the 7

of TDC’s Site and Services Project. It lies 2.5km north of the Accra-

Tema Motorway. Under the Site and Services Scheme, TDC develops raw lands by providing

networks of tarred roads, drains and gutters, electricity and water supply. The first phase of this

project started in November 2010 to December 2013. This covered the construction of connector

roads that traverse the encroached parts of Community 23 and the principal boundaries of

community 24. It also included the construction of access roads and drains. The second phase

started in January 2014 to 2017. The second phase covered the tarring and covering of concrete

culverts. The project encompasses a vast area of 460 acres of land. As is typical of TDC serviced

lands, the area is well planned to include schools, churches, commercial and other institutional

sites including a police station. The community is 10 minutes and 5 minutes’ drive away from

Accra and Tema respectively via the motorway.

Land Value Capture Via Project-Related Land Sales

Land Ownership and Local Land Use Planning

The State acquired 63 square miles (40,320 acres) from three traditional authorities under a

compensation rental agreement. Under this agreement, compensation for the land was not paid

outright, but payment is made annually through ground rents. TDC was given a 125-year lease

term to manage land area which is generally referred to as Tema Acquisition Area (TAA). TDC

as a lessee plans and services the land for development. Initially, the Company used to handle the

whole process of planning, servicing, and building and then selling the completed housing units

under a 60-year lease arrangement for residential properties. However, subsequently, TDC is

now leasing the land through its site and services schemes. As the head lessee, the Company

collects ground rents from sub-lessees and pays the state annual ground rents in accordance with

the terms of the lease arrangement with the state. The State receives these rents and pays a

certain proportion to the three traditional landowners under the compensation rental agreement.

The compensation rental agreement ensures that traditional landowners continue to benefit from

the land through annual ground rents.

TDC is responsible for the physical planning of sites within the TAA. They initiate land

development projects and plan sites into residential communities. Thus, the entire TAA area is

divided into residential communities that are well planned and serviced with critical

infrastructure services. The Company has a Physical Planning Department that is responsible for

land use planning. The Site and Services project begins with land use planning of the area.

Because the company has a 125-year lease, it is much easier to engage in land use planning to

determine the relevant users to the land. Thus, a land use plan was prepared for the entire area of

community 24 (Figure 8). However, in order, to maximize resources, the adjoining area of the

land that has been encroached by squatters was also incorporated in the land use planning.

The area has 1,133 residential plots with maximum plot sizes of 0.16 acre per plot. The

remaining area is reserved for commercial, institutional and recreational uses. The planning

department determines the standard plot size and sets the criteria for plot allocation. One

criterion is that once a plot is fully paid for and allocated to the sub-lessee, it has to be developed

within two years from the date an offer is made. The criteria allow limited extension of this

maximum period. However, application for extension of the period of development must be

made to the Managing Director stating the reasons why the plot cannot be developed within the

two years period.

Figure 8: Community 24 Land Use Scheme

Funding Arrangement

TDC financed the preparation of the land use scheme with internally generated funds. The

internally generated funds comprise ground rents, rents from rental properties, land sales, and

sale of completed houses and apartment blocks from their operations. By the nature of its

incorporation, it is allowed to make a profit from its operations. After the land use scheme was

prepared for the project, the company advertised the project and solicited offers from prospective

tenants to finance infrastructure. Prospective lessees made 40% down payment. Thus, the entire

project was financed wholly with internally generated funds and 40% down payment from

prospective purchasers. The company’s strength in financing such projects with internally

generated funds lies, in fact, in its ability to leverage funds from other projects undertaken within

the value chain of land development. This value chain includes land use planning, servicing with

requisite infrastructure, building and letting out completed houses to the general public. The

company is able to do this because per the mandate, they handle the entire chain of the land

development process and are able to generate substantial amounts out of their operations. They

also have reputable credibility both in-country and outside the country, especially among

Ghanaians resident abroad who prefer to deal with the company because of the long-standing

reputation built over the years. Plots of land at the project site were 95% sold at the time of data

collection.

The main infrastructure services provided on site are road network, drainage and culverts,

electricity and water supply. The details of infrastructure and services is presented in Table 4.

Table 5: Estimated Coverage Areas and Approximated Cost of Infrastructure

Type of Infrastructure

Distribution

The cost in Ghana Cedis

(GHS*)

Road Network

Peripheral and access road

(double seal) 10.3km

Internal roads (single seal)

29.1km

27,064,280.00

Drainage and Culverts

Internal drains 58km

Drainage along main access

road 21km

Concrete lining of main

watercourse 1.15km

Total drainage network

80.15km

Total No. of Culverts 12

13,007,272.00

Electricity supply and

distribution

About 60km network and a

number of transformer

stations

5,880,000.00

Water supply and distribution

53km distribution line

2,840,646.00

Total cost (approximate)

48,792, 198

*Exchange rate as of 2014 when the project works were undertaken US$1= GHS4.333

At the time of data collection, road network for the project was completed with all concrete

drains provided (Figure 9). Electricity supply and distribution are yet to be provided on site, but

95% of the plot was leased out to tenants. Lessees are constructing few residential properties at

various stages of completion (Figure 10).

Figure 9: Sections of the Road Network

Figure 10: Sections of Buildings Under Construction

Collaboration and Partnership with Public Sector Institutions

TDC collaborates with the Kpone Katamanso Municipal Assembly for the approval of local land

use plans. The two institutions have set up a joint District Spatial Planning Committee where

TDC takes an active part in the approval of land use plans. In addition, both TDC and the

Assembly have agreed to share building permit fees accruing from the project on 50:50 basis.

However, this agreement is currently facing challenges because the Kpone Katamanso Municipal

Assembly is raising issues with such agreement based on the statutory mandate of the Assembly

as the Planning Authority of the area. The Assembly is of the opinion that they have the right to

grant building permits on any development irrespective of the location of such building within

the district.

Evidence of Land Value Uplift

At the beginning of phase 1 of the project in 2010, land values in surrounding sites and precisely

at community 23 where the land was encroached by private developers, the price per acre of land

was GHS30,000, the equivalent of US$20,182

. Thus, the price per 0.16-acre plot of land before

the project was US$3,229. However, after the provision of infrastructure services for phase 1 of

the project, the price per acre of serviced land went up to US$140,400 translating to US$22,464

per 0.16-acre plot. Phase 1 of the project affected land values of surrounding communities

positively so that at the commencement of Phase 2 in January 2014, land values of comparable

sites more than doubled. The land price per acre at Santa Village near community 24 was around

GHS61,000 (US$16,138

). Thus, the price of standard plot size of 0.16-acre was US$2,582.

Nevertheless, at the completion of phase 2 of the project after providing critical infrastructure

services, the price per acre went up to US$187,500 in 2017 with the price per 0.16-acre plot

going for US$30,000.

Strategy for Recovering Infrastructure Cost

TDC is able to determine the selling price of plots before the actual execution of critical

infrastructure work using the pro rata method. This method distributes the cost of infrastructure

proportionately. Thus, the total number of plots covered in the land use scheme is divided the

total cost of infrastructure. Therefore, each plot is assigned an amount of the cost of critical

infrastructure proportional to its share of the whole. After the proportional allocation of the cost

of infrastructure to each plot, TDC adds overheads and profit margin to arrive at the final sale

price of the plot. Land prices are in US dollars. This is meant to safeguard the potential loss in

value due to depreciation of the Ghana Cedi with time. Therefore, a resident Ghanaian

purchasing such plots will have to pay the Cedi equivalent of the dollar price of the land at the

time of purchase. At the point of purchase, the current exchange rate prevailing on the market is

used. Therefore, the value capture instrument used is the development charge or infrastructure

levy (Berrisford, Cirolia, and Palmer 2018; Peterson 2009).

Administrative Arrangement and Support Services

The company has a good administrative arrangement that features all aspects of the land

development chain and incorporates a business model that enhances credibility and timely

delivery of projects. The company has an organogram that mirrors the major specialized

operations of each department. It has a Real Estate Department that handles all types of land and

building rents, valuation, and provides property management services to the company. This

department also has a regularization section that deals directly with the original traditional

landowners to regularize land areas that have been encroached by squatters. Besides, the internal

administration unit offers administrative support services such as recruiting skilled professionals

and general human resource management, accounting and finance support in evaluating and

recommending corporate funding and recovery strategies, logistics and real estate management

services, procurement and marketing services. These administrative requirements and support

services have ensured that there is a steady growth in the company’s business in the housing and

US$ 1 = GHS 1.4865 as of December, 2010

US$ 1= GHS 3.78 as of January 2014

serviced plots portfolios. It has also ensured that there are high standards of service delivery to

the Company's clients.

Human Resources and Technical Expertise

The company has highly skilled and seasoned professionals working in the various departments.

These professionals range from valuation and estate surveyors, quantity surveyors, corporate

lawyers, urban planners to financial and information technology experts, procurement specialist

and corporate planning and communications specialists. TDC has developed its human resource

base over several years of land development and has managed to retain experienced real estate

professionals. Some of the professionals have been working with the company since 1985. This

has enabled the company to retain some institutional memory and focus on their core mandate. A

blend of old and newly recruited seasoned staff ensures that there is creativity and innovation

based on experiential knowledge. The caliber of staff with technical expertise in land

development, real estate marketing and financial engineering have created a niche for TDC as a

leading parastatal estate development company in Ghana.

Target Beneficiaries

The target beneficiaries for the TDCs Site and Services projects are mostly non-residents

Ghanaians and real estate developments firms. The non-resident Ghanaians are able to acquire

residential plots to build houses of their desired architectural designs, which they are unable to

find from real estate developers. Other beneficiaries are real estate developers. Besides, the price

range of US$20,000 to US$30,000 of residential plots is certainly unaffordable to most low-

income households with an average monthly household income of US$ 125 especially for

salaried employee (CAHF 2018a).

Ghana Airport Company’s Airport City I Project Case Study

Overview

The Ghana Airport Company was established in 2006 as a limited liability company because of

the decoupling of the existing Ghana Civil Aviation Authority (GCAA) in order to keep pace

with current development in the aviation industry. The Company is responsible for planning,

developing, managing and maintaining all airports and aerodromes in Ghana. In addition, it had

the objective of generating non-aeronautical revenue from the development of commercial land

in and around the airports. It operates under the State Enterprises Commission as a parastatal

company. The Ministry of Transport and Aviation has direct supervision over the operations of

the company. One of the main strategies for enhancing non-aeronautical revenue are Airport City

Projects I and II.

The Accra Airport City project I was conceived in 1994 as part of the Accra Urban

Redevelopment project. The Accra Urban Redevelopment Project aimed to modernize the city

center with improved infrastructure and create a modern commercial hub with commercial

development comparable to world cities. The then GCAA, the Accra Metropolitan Assembly

(AMA) and the Town and Country Planning Department collaborated to plan the area as a

modern miniature city. The project is located within the vicinity of the Airport Residential area.

It is bounded to the west by the liberation road, to the north by the Airport road, to the east by

Airport bypass road and to the south by the liberation link road (Figure 11). The project area was

originally part of the AMA area, but due to increasing demand for political decentralization, a

new local government area, named La Dade Kotopon Municipal Assembly was carved out of

AMA, and the area is under this local government jurisdiction.

The project covers a total area of 40.83 acres of land subdivided into 29 plots with plot sizes

varying from 1.5 to 2 acres. It is developed as a miniature corporate and commercial hub with

high-density, mixed-used development hosting office complexes, banks, hotels, restaurants, a

shopping mall, recreational centers, car parks and fast-food centers. The notable edifices in the

are SSNIT Emporiums, Holiday Inn and Marriot hotels, Silver Star Tower, NCA Tower, Marina

Mall and Manet Towers.

Figure 11: Airport City I Land Use Plan

Land Value Capture Via Project-Related Land Sales

Land Ownership and Local Land Use Planning

The land is public land compulsorily acquired by the State, held, and managed by the Lands

Commission for and on behalf of the State. In 1994, the Lands Commission, granted the Ghana

Civil Aviation Authority a 50-year lease term because of the intent to convert the land use to

commercial purposes. Under, the Lands Commission practices and conventions, state lands can

only be leased for 50-year term for commercial development. However, the decoupling of the

GACL from the GCAA in 2006 to handle airport development and commercial activities and its

new orientation, led to the renegotiation of the lease term, extending to 99 years. The reason

being that, the original 50-year term could allow GACL to undertake such a venture and because

the Lands Commission had a key stake in the development, it circumvented its conventions to

grant the 99-year lease term. A respondent from the Public and Vested Land Management

Division of the Lands Commission indicated that the renegotiated 99-year lease term is for the

entire land covering the Airport and that the negotiation is complete, but the Commission is yet

to finalize the lease agreement. Thus, Airport City I and II project areas are covered by the 99-

year lease term. The GACL is able to grant a 45-year term subleases to investors with the option

of 10-year lease renewal upon expiration. Thus, this tenure arrangement allows the GACL to go

into commercial land developments and facilitate the site and services project for investors and

commercial land developers.

The Accra Urban Renewal program influenced the land use planning of the Airport City I

project. A respondent from Consortium Limited (the consultants that prepared the land use

scheme) indicated that before the Airport City project was conceived, the area was vacant with

bushes and partly occupied by squatters. As explained by the respondent: “His was a prime land

located at the heart of the city, left vacant with bushes and a section partly occupied by squatters

almost creating a slum in the area.” This created a worrying situation for urban planners and the

city authority because the area remained unused but strategically located. There was stiff

competition for residential and commercial development in the Central Business District (CBD),

creating sporadic traffic in the city. Many urban stakeholders started calling on the government

and the city authority to make optimum use of this prime land (Arthur 2018). A private

consultant from the Consortium started engaging the AMA, GCAA, Town and Country Planning

Department and the Lands Commission to prepare a scheme. This engagement resulted in the

decision by the stakeholders to plan the area as a model city in line with modern trends (Figure

12).

Figure 12: Commercial Development of Airport City I

Before Development

After Development

Financing Arrangement

The infrastructure was funded by the GCAA internally generated funds on a cost recovery basis.

Initially, the project explored different options for financing both site development and

infrastructure. These options were: (1) Provide infrastructure on cost recovery basis; (2) Provide

funding linked to the role of the contractor; (3) Providing funding for infrastructure linked to role

as sole developer or anchor developer; (4) Sourcing for anchor developers/developers separate

from funding of infrastructure; and (5) Linking developers to a single source of funding for their

respective projects. Each of these options had implications on how to raise the initial funding for

infrastructure and site development and how to recover the cost. Bearing in mind these

implications, the GCAA finally settled on the first option.

Strategy for Recovering Infrastructure Cost

The infrastructure levy instrument is used to recover the cost of infrastructure. This levy is

calculated on a pro-rata basis where each plot had a proportionate share of the total cost of

infrastructure. GACL invited bids from private investors and the public to acquire the serviced

plots after providing the basic infrastructure services within the project area. The highest bidder

through the land auction concept (Paulais 2009) determined the land sale price. In addition to the

payment of the premium on the land through the bidding process, developers paid the

infrastructure levy to the GACL.

Collaboration and Partnership with Public Sector Institutions

The project design and implementation was a collaborative effort of GCCA, Lands Commission,

Town and Country Planning Department, Accra Metropolitan Assembly and the Department of

Urban Roads. These key stakeholders played different roles including changing the land use,

arranging the lease between the parastatal institutions and the Lands Commission, obtaining land

use planning approval and providing road infrastructure. However, after the land was serviced,

the GCCA partnered with developers to execute the planned city development. GACL developed

guidelines for plot leasing and penalties for non-compliances to guide development. These

guidelines required that the lessee commence development of the site within one year from the

date the land is granted. Besides, each development had to conform to the design and planning

guidelines of the project and the prior-approval process from development control institutions.

Evidence of Land Value Uplift

Evidence from private real estate brokers indicated that the land value per acre before the project

implementation in 1998 was about US$200,000 within the immediate neighborhood of Airport

Residential Areas. However, at the end of planning and servicing the area with critical

infrastructure, land price per acre went up to between US$300,000 to 350,000. The change in

land values was based on appraisals by estate brokers because the actual cost of infrastructure

could not be ascertained as well as the baseline land values of the project site. The project

implementers could not recall the details of the costs estimates and actuals. In addition to this,

the lessee pays a one-time infrastructure levy, which is proportionate to the size of the plot.

Administrative Arrangement and Support Services

The decoupling of the GACL from GCAA gave the former specific roles in the development of

Ghanaian airports and air transport. GACL’s mandate spans beyond the physical development of

airports to include creating a business-friendly environment that attracts developers and

international business. It also provides support services to corporate entities in commercial real

estate development in and around Ghana Airports. In order to fulfil this mandate, the

Commercial Services Department was established to support the management and maintenance

of corporate real estates within the Airport City. It also provides support in the management of

car parks, enforcement of lease covenants and engaging stakeholders concerning the

maintenance of security and common areas. This Unit encouraged the developers within the city

to form the Airport City Association so that their concerns could be addressed through mutual

beneficiary relationship and decision-making.

Human Resources and Technical Expertise

GACL operations are specialized with the primary focus on non-aeronautic services within the

environs of Ghana Airports. Thus, the operational functions of the GACL are many and varied

unlike a typical real estate developer. Because of this, the company engages different types of

professionals to be able to discharge their functions effectively. In addition, even though GACL

is a state-owned company, they do not receive any subvention from government and are required

to raise adequate revenues to finance the company’s operations. It is entirely a profit-making

organization. Therefore, it recruits the right professionals with requisite expertise to ensure that

the company generate adequate revenues to perform its functions. The departments that deal

directly with the Airport City I project are the Airports Planning and Projects, Commercial

Services and Facilities and Infrastructural Management. These departments have employed

highly skilled labor that have technical expertise in the areas of planning, land development and

facilities management. For example, Commercial Services Department is headed by a Valuation

and Estate Surveying Professional. He has several years of valuation and estate surveying

experience. Also, all the critical staff in the Commercial Services Department have valuation and

estate surveying skills relative to land management, commercial property management, valuation

and ground rent assessment, negotiation and contracting, and project planning and

implementation.

Besides, the Airport City project is a novelty and the first of its kind in the country and was

designed to meet the dynamics of international airports operations. Therefore, in keeping with

the increasing international competition in non-aeronautic services, the Company employs the

right caliber of professionals that can work to foster creativity and innovation in a competitive

urbanizing world.

Target Beneficiaries

The Airport City project is designed for corporate private sector clients. According to Arthur

(2018), the primary objective for the Airport City project was to create an integrated air transport

and business hub that would leverage the synergies between international business and air

transport services. Thus, the project was strategically developed to offer travelers, corporate

executives, and visitors a variety of experiences and business opportunities including hotels,

offices, shopping malls, conference and entertainment centers. This objective already defined the

target client for the project. The corporate clients include the Social Security and National

Insurance Trust (SSNIT), Silver Star Towers Limited, Manet Towers Limited, National

Communication Authority, Holiday Inn, Marina Mall, among several others. A marketing officer

of one of the corporate estates indicated that they were motivated by the proximity of the area to

the airport as many international business travelers and investors find it comfortable to live and

work near the airport.

However, during the implementation of the project, certain responsibilities of GACL have not

been fulfilled leading to dissatisfaction with some of the infrastructure services provided and the

maintenance of these services. For example, the car park has not been completed and the

maintenance of some common areas such street lighting has been become problematic.

According to an interviewee from the Airport City Association (ACA), they the corporate clients

formed the Association to engage management on the effective management and maintenance of

the city. The interviewee asserts that they (the corporate clients) initiated the formation of the

ACA and when the management of GACL heard of it, they supported the idea. Apart from

ACA’s objective of managing and maintaining common areas of the city, they have also

undertaken to market the project. ACA’s vision is ‘to be the most influential advocate for the

airport city, building owners and clients as the best international business center in the country.

This vision provides an added advantage to the project implementation because the project

implementers may not have to do much on marketing as the association is already doing this

part. The ACA role in partaking in the management of the area brings another facet of dynamism

to the design and implementation of land development strategies aimed at capturing land values.

The acceptability of ACA’s role by the management of GACL creates mutually beneficial

relationship and effective partnership between the corporate clients and the project managers.

Oak Villa Estate Case Study

Overview

New Oak Company is a real estate developer with a subsidiary company Oak Villa Estate. It was

established in 2005. Its main objective is to build quality and affordable housing for young

families, individuals and business. It is a full-service real estate company. It focuses on building

and management of residential properties. Since its inception, it has developed five different sites

in the Ga West and East Municipalities. It is currently building about 500 housing units at

Teiman in the Ga East Municipality.

Oak Villa Estate is part of the general group of private real estate developers that are specialized

in developing residential accommodation for households and individuals in gated communities.

These real estate development companies are classified into three groups based on their

developmental models (Ehwi 2018). The first class is the Master-planned Gated Communities.

This comprises developers that design and build residential housing units that have no room for

modification. The developer provides other added services such as security systems and

management of the common areas. The second class is the Serviced-Plot Gate Communities.

Real estate developers under this category buy large tracts of land usually at the peri-urban areas,

plan the area, provide services such as road networks, drainage system and extend other basic

utilities to the area. After installing basic infrastructure services, the developers subdivide the

land into residential and commercial plots and sell it to the public. The third group of real estate

developers is classified as hybrid gated communities. The developer buys large tracts of land,

plans, services it with required basic infrastructure, and subdivide it into building plots. The

developer master plans a section of the serviced land and builds prototype housing and reserves

the remaining portion for purchasers to build their preferred houses. The rationale of this model

is to demonstrate to purchasers of the serviced land the type and quality of housing that is

expected within the estate and to give the public the opportunity to experience the gated

community lifestyle.

Oak Villa Estate is master-plan gate community. It acts as a single owner of the estate and

performs four main functions that are aimed at increasing the value of the land it owns (Brunetta

and Moroni 2012). First, it acquires a parcel of land, plan, and services and builds prototype

housing units. It sells completed housing units to the public. The company handles the entire

chain of the housing development process. Second, it sets the rules and regulations concerning

leasehold tenancy agreements and covenants spelling out the duration of tenants’ subleases.

Third, the company advertises its gated houses to the public and selects suitable clients to

purchase the houses. Fourth, the company undertakes routine maintenance of infrastructure

services within the estate and manages common areas and maintains security for the tenants. It

also ensures that tenants comply with sublease covenants.

Land Value Capture Via Project-Related Land Sales

Land Ownership and Local Land Use Planning

The company acquires a parcel of land from traditional landowners under a private treaty

arrangement. Oak Villa Estate acquired 12 acres of land from a family in 2011. The company

paid the full market value of the land and entered into a 99-year leasehold contract with the

landowning family. The parcel of land is registered in the name of the Oak Villa Estate. The

company, therefore, grants subleases of 50-years to purchasers of housing units within the estate

out of its 99-year leasehold contract with the landowner.

The head lease arrangement between the company and the landowner, guarantees the security of

tenure for tenants’ subleases. Once the head lease is registered and the land title certificate is

obtained from the state registry, all other subleases are subservient to it. This type of

arrangement ensures the security of tenure for subleases since the sublease is contingent on the

head lease. In addition, the arrangement further makes easier for sub-lessees to register their land

documents at the Lands Commission as the commission simply relies on the head lease to create

subleases out of it. According to Ehwi (2018), this type of arrangement by real estate developers

assists in eliminating the inherent bureaucracies in the land registration process, reducing the

costs involved in obtaining land title and protecting prospective purchasers of housing units from

unnecessary land litigation that often arise from multiple sales of land.

As a master-planned gated community, the company engaged the services of an urban planning

consultant to prepare a layout for the area. Though the layout was not made available, for the

purposes of this research, careful observation of the built-up area indicates that there is only one

principal street that traverses from the entrance of the estate to a T-Junction towards the end of

the parcel of land. On either side of the street, houses are built in what appears to be row-

development (see Figure 13). Each house has an average plot area of 0.06 acre. This is far lower

than the statutory planning minimum lot size of 0.16 acre for residential development and

contrary to the statutory land use regulations (Anokye et al. 2013). The entire layout is built up

of residential houses of different typologies. There is no provision for commercial areas and

other amenities.

A respondent from the Estate Department of the company indicated that the Ga East

Municipality approved the land use scheme before they commenced development of the area.

However, a respondent from the Land Use Planning and Spatial Authority of the Ga East

Municipality suggests that the approval of the land use plan was politically motivated. According

to the respondent, the Municipal Chief Executive (MCE) at that time had a special interest in the

project and therefore used his influence to get the land use scheme approved without the

necessary scrutiny from the Physical Planning Department. If this assertion is true, then it raises

a critical issue of the use of political influence to circumvent urban planning rules and

regulations. However, a close examination of the proximity of the Estate to the Ga East

Municipal Assembly Office Complex gives an indication that the MCE’s interest might not have

been political but purely developmental. Moreover, when the respondent from the Land Use

Planning and Spatial Authority was further asked why the Municipal Assembly should be

interested in such projects, the respondent quipped that the Assembly should be interested

because such projects have the potential to increase IGF through the property rates. The

respondent adds that the project has brought development in the area, as the project site was

formerly a swampy area laying vacant. Therefore, the respondent asserts that Physical Planning

Offices of the Assembly tend to relax urban planning rules and regulation for gated communities

because of the anticipated benefits such developments bring to Assembly.

Figure 13: Typical Housing Development at Oak villa Estate

Funding Arrangement

Oak Villa Estate finances the land purchase, infrastructure services, and housing development

from internally generated funds. A respondent from the Projects Department of the company

indicated that the company started a construction firm and mobilized funds from construction

work profits. It then started its first project at Ashongman. As a construction firm, the company

purchased and developed a quarry site for its work. Therefore, the company raises financial

resources from the operations of its subsidiaries and then leverages the sales proceeds of houses

from other housing projects to purchase lands for future development. Thus, the current 500

houses being built at the Oak Villa Estate site are financed largely from its internally generated

funds. The company also finances housing development with clients’ down payment, where

prospective clients pay 40% of the price of the house before construction begins. The main

infrastructure services provided at the site are access roads, electricity, and water extension.

Besides, the Ga East Municipal Assembly requested the company to construct the section of the

main connector from Oyarifa to Abokobi. This was among the conditions the company had to

meet before the planning and development permit was granted. This is an In-Kind Contribution,

a tool the Municipal Assembly used to ensure that the developer constructed the road at its

expense.

Strategy for Recovering Infrastructure Cost

The entire process of transforming bare land into finished housing involves land value and

property value creation and capture. Thus, the company adopts a composite cost-built method to

determine the selling price of a completed house. Through this method, percentages are allocated

to each components of the house. Land cost is 13% of the total cost, infrastructure 15%, material

and labor 36%, finance 20%, and overheads and profit is 16%. Therefore, the infrastructure cost

is recovered through an infrastructure levy of 15% on selling price of each house.

Collaboration and Partnership with Public Sector Institutions

The company does not necessarily collaborate with public sector institutions. However, by the

nature of its operations, it regards public sector as service providers and regulators. Therefore,

concerning land registration, the company goes through the process just like any other ordinary

citizen or corporate body. In addition, it applies to the municipal assembly for land use planning

approval.

Evidence of Land Value Uplift

The company leased the 12-acre bare land at US$14,400 in the first phase of the project. This

translates to a unit price of US$1,200 per standard plot size of 0.16 acre. This was subdivided

into 200 building plots of 0.06 acre. However, 3.18 acres was used as access roads, utility lines,

and common areas. Currently, phase one of the project has 147 completed houses ranging from

3-bedroom semi-detached units to 4-bedroom single- and two-story units. The prices range from

US$58,000 to US$124,000. Though the building plot size reduced to 0.06 acre, its developed

value as a component of the total housing value went up to US$7,540 on average. The company

strategy for capturing land values is through property sales.

Administrative Arrangement and Support Services

Oak Villa Estate has an active Sales and Marketing department that engages in rigorous sales and

promotion services. This department has developed strategic partnerships with banks such as

Bank of Ghana, Stanbic, Barclays, Fidelity and GHL-Bank to supply housing to their staff.

Besides, they have also developed partnerships with mortgage banks like Fidelity and GHL to

provide mortgage financing to their prospective clients. In addition, an internal administration

unit manages security services, land registration and estate management issues and acts a liaison

between management and tenants within the estates. The company has engaged a full-time

technical advisor, who advises management on constructions.

Human Resource and Technical Expertise

The company has a lean management team of six. These include the Executive Director and his

Deputy, Head of Sales and Marketing, Head of Administration, Technical Advisor and Finance

Manager. The Executive Director is a businessperson with vast experience in construction and

project management. The core management staff are very experienced professionals with varied

expertise in their respective areas. The company also depends on the services of other

professionals such as engineers and planners. The blend of experienced core management team

with outside experts’ engagement when needed leads to effective execution of the company

vision.

Target Beneficiaries

The company targets young families, individuals, and businesses, such as employees of

corporate bodies like banks and national and multinational companies. In addition, mortgage

banks such as GHL, Stanbic, and Fidelity banks also form part of their clients. The beneficiaries

have formed an association of property owners where they engage management on the quality of

services provisions including security and general maintenance of the estate.

The type target beneficiaries in the estate have purchasing power to be able to buy the houses

outright through either through their own savings or mortgages. For example, the company offers

3- and 4-bedroom detached and semi-detached houses with prices ranging from US$ 60,000 to

US$125,000. Clearly these types of houses are affordable to the target group but certainly

unaffordable to the ordinary Ghanaian. Also, the company has tailored its housing pricing in line

with most mortgage banks eligibility thresholds. GHL Bank, for example, has set up US$60,000

as the minimum property price eligible for mortgage loan (CAHF 2018a). Young families

constitute the emerging middle class in Ghana. They are mostly young people at their prime age,

working and earning a good income. There is a growing demand for housing from this income

group (CAHF 2018a). A respondent from the Marketing Department of the company indicated

that this group does not have the time to look for land and supervise the construction of their own

houses, hence, their desire for already completed houses. They also desire to live in a well-

planned neighborhood where there is security, adequate infrastructure, and amenities. Besides,

they want to relieve themselves of the problems of land acquisition such as multiple sales of

land, land litigation, and difficulty in identifying the rightful traditional landowner from which

they can lease litigation-free land.

Observations on the Case Studies

One of the factors for the successful implementation of land value capture or land-based

financing is demand. Demand for planned and serviced lands influences the supply. There are

estimates that the emerging middle class is expanding with the growth of the economy (CAHF

2018a). This is creating ‘big’ demand for well-planned and serviced residential gated

communities (Rendeavour 2018). As a result, there is proliferation of real estate developers

especially in the GAMA (Akwensivie 2018). Professionals in the real estate industry asserts that,

the growing demand has also influenced the development of new ‘cities’ within GAMA

(Akwensivie 2018; Rendeavour 2018). For example, real estate developers like Rendeavour have

developed a satellite city in the Kpone Katamanso Municipal Assembly. This satellite city is

being built on 2,325 acres of peri-urban land. This creates opportunities for land value capture

financing of urban development in Ghana. Suzuki et al. (2015) and African Centre for Cities

(2015) confirm that effective demand for land and property is one of the pre-conditions for

successful implementation of the development-based LVC.

From the analysis of the case studies, three observations can be made on the demand

characteristics of beneficiaries of these projects. First, beneficiaries indicated that living in gated

communities guarantees land tenure security. They explained that it is risky to deal with

traditional landowners as individuals because one cannot be sure of who has the right to dispose

of the land especially when the land belongs to families. Some of the beneficiaries recounted

their experiences when they dealt with some traditional landowners. For example, one

beneficiary from one the case estates indicated that he leased a building plot at some peri-urban

area and later discovered that the same land had been sold to another individual. Some

beneficiaries further indicated that even where the land belongs to chiefs, it is difficult for an

individual to identify the right chief to deal with. However, they contended that when you buy

land or house from the real estate developer in a gated community, you are assured that the

developer has the right land documentation and no one will one day come inside the estate and

evict you as an individual homeowner. They believe that before, the real estate developers will

engage in such a massive development they would have acquired the land legitimately. Ehwi

(2018) corroborates this finding by stating that respondents in gated communities generally

agreed that lands sold by estate developers especially in gated communities are free of land

litigation and multiples sales of land.

However, beneficiaries have different perceptions about the levels of tenure security between

lands purchased by real estate developers from traditional landowners and public lands. They

contended that they felt more secured buying public land from a parastatal organization than

from real estate developers. They perceived that it is much more difficult for a traditional

landowner to contend with the state on lands that have been compulsorily acquired and

compensated by the state. Some beneficiaries indicated that they heard of instances were

traditional landowners have litigated with some real estate developers on lands in some gated

communities. Therefore, they felt that public lands guaranteed more tenure security than lands

purchased by real estate developers under private treaty. The issue of tenure security and

acquisition of litigation-free lands is paramount to beneficiaries of these projects. This is against

the background of the problems that bedevil the customary land sector in Ghana. For instance,

tenure insecurity is one of factors that inhibits housing investment and development (Abdulai

and Ndekugri 2007; Baffour Awuah et al. 2014; Ubink 2006; Ubink et al. 2018).

Second, beneficiaries indicated they prefer to purchase land or houses from real estate developers

because these lands are planned, and infrastructure services are provided on site. They argue that

the cost of inconvenience associated with dealing with service providers and, getting basic

services is huge, and the individual is unable to influence the system to get these services. A

respondent indicated that “one doesn’t have to waste time and energy to get these services

because the estate developers undertake to provide these before selling the houses.” Beneficiaries

further indicated that they are willing to pay higher prices for serviced land because this reduces

the cost involved in housing as compared to buying un-serviced peri-urban lands. Their argument

is that the real estate developers are able to provide the bulk infrastructure before selling the

housing. This reduces the unit cost of infrastructure per plot as compared to an individual

developer who bears the full cost of providing these to and individual plot.

Third, beneficiaries, especially from the Airport City project, asserted that locational advantages

motivated them more than the site infrastructure itself. The beneficiaries indicated that proximity

to the Kotoka International Airport and accessibility to the CBD, Government Ministries,

Department and Agencies and ancillary services influenced their choice for the Airport City

Area. The premium the beneficiaries placed on locational advantage over the critical

infrastructure on site can be explained by the fact, before the decision to change the land use of

the Airport City enclave, the area was already bounded by good quality major roads, and basic

services. Therefore, the centrality of the location relative to other important places within the city

of Accra influenced the commercial nature of the development within this project more than the

infrastructure on site.

It is important to put the perceptions of beneficiaries, especially of the residential land

development projects, within a certain socio-economic context. These beneficiaries mostly fall

within the high income and emerging middle-income classes. Their desire to live in well-planned

and serviced neighborhoods is precipitated by their ability to afford the services and the asking

land and property prices associated with the developments. Besides, most of beneficiaries are

highly educated, busy business people and technocrats that have the affinity to living in serene

residential neighborhoods. Thus, their preference to purchase properties in these neighborhoods.

The Community 24 and Oak Villa Estate cases show that the development sites are gated

communities with clear attempts at targeting middle to high-income groups. This has led to

seclusion and segregation with the consequences of having very rich neighborhood enclaves

surrounded by unplanned poor neighboring communities. The real estate developers clearly do

not attempt to address the issues of affordability of their projects to the low-income households.

The projects are designed especially for the target group that have effective demand. This

targeting is leading to the exclusion and segregation in both residential and commercial enclaves

within GAMA. It is important to appreciate the nature of exclusion and targeting because private

or parastatal organizations land developers fund their activities entirely from leveraged schemes

without any support from the public sector. Thus, they must ensure that they resort to market

mechanisms such us willingness and ability to pay in order to sell the serviced lands or houses.

However, this obviates the principle of land value capture especially where one of the objectives

of value capture is to implement public policies to promote equity (e.g., provision of affordable

housing to alleviate shortages and offset potential gentrification) (Suzuki et al. 2015).

Apart from the characteristics of demand, another observation from the case studies is the

approach to value capture. In all the cases, the type of value capture approach used is the

development-based (Suzuki et al. 2015). They are engaged in project-related land and property

sales to generate revenues through granting subleases to purchasers after providing requisite

infrastructure services. This approach establishes a link between value creation and value

capture. It directly links those who benefit with those who contribute. The approach is market

driven and is based on sharing the extra value created through the provision of new

infrastructure. Thus, the project related land and property sales is influenced by the growing

demand for well-planned residential and commercial enclaves with requisite urban infrastructure.

The strategies for capturing land value uplift differ slightly from one case to the other. The

strategies are directly related to the pricing of the serviced land. TDC, for example, adopts the

pro-rata method to distribute the infrastructure cost to all plots, and therefore, each plot has a

share of the infrastructure cost, which is factored into the selling price of the land. Thus, the

component of infrastructure cost is recouped through land sales. Oak Villa Estate also adopts the

composite pricing of the entire component (land, infrastructure, materials and labor, finance,

overheads and profits). Thus, the final sale price of a house reflects the various components.

Airport City, however, separates the serviced land sale pricing from the infrastructure cost.

Serviced land is auctioned through a competitive bidding and tendering process. When a

developer wins a bid, a one-time infrastructure levy is paid in addition to the bid price. It is

calculated as a per-cent of the land value. The levy is applied during the planning approval phase

by the GCAA. Developers within the Airport City enclave must apply to the GCAA for building

heights approval and to the La Dade Municipality for development permission. The

infrastructure levy is used to finance infrastructure provisions on the site as corroborated by

pundits such as Berrisford, Cirolia, and Palmer (2018), Palmer and Berrisford (2015), Peterson

(2009) and, Suzuki et al. (2015).

Another observation is that both TDC and GACL are state-owned enterprises while Oak Villa

Estate is purely private. As state-owned enterprises, the State Enterprises Commission regulates

them and ensures performance standards. They pay dividends to the government when they make

a profit in their operations. Thus, profit is shared between the company and the state, unlike the

purely private company where surpluses might be retained and reinvested in the business. It

appears that private land developers have an advantage in terms of ploughing back profits for

further development of new sites as compared to the parastatal land developers.

Lessons from the Case Studies: Key Themes and Issues

Land Value Capture Through Project Related Land Sales

The cases show that land values that have been enhanced by infrastructure investment and

changes in land use zoning are captured through project-related land sales. The project-related

land sales fall under two categories reflecting the type of developer. The first category comprises

parastatal land developers such as the TDC and GACL. These developers have access to public

lands that have been leased to them by the state under certain leaseholds arrangement. They

prepare land use schemes and provide internal infrastructure and, in few cases, also provide

connector infrastructure to increase accessibility to the sites on a project-by-project basis. They

capture the associated land value appreciation through land leases or sales. The second category

comprises of private estate developers, which purchase land from customary landowners, plan

the area, provide internal infrastructure, and build residential accommodation in gated

communities. Land value appreciation is captured through the sale of estate houses. Under this

second category, external or connector infrastructure is sometimes provided through In-Kind

Contribution.

What is worth noting in the project-related value capture strategy in the above case studies is the

way the cost of infrastructure is factored into the final land sale or property sale price. The cost

of infrastructure is built in the final sale price through the pro-rata basis and the component

pricing model such that there is no distinction between the land or property sale price and

infrastructure cost. Therefore, purchasers do not feel that there is an additional cost burden for

infrastructure. This makes it much easier to recover the cost involved in installing infrastructure

in such projects as compared to a separate charge for infrastructure recovery.

Value capture through project related land sales as exemplified by the case studies is not new in

Sub-Saharan Africa. It has been utilized extensively in Addis Abba, Ethiopia. However, in the

case of Addis Abba, the land is state-owned, and the state services the land in the city and leases

it to developers (Berrisford, Cirolia, and Palmer 2018). The case of GAMA is different because

the state and local authorities own very limited lands. The state can only own land through the

use of its eminent domain. The few public lands available have been allocated to government

institutions and parastatal organizations.

Nonetheless, capturing land value through the project related land sales by the case studies offer

useful lessons to MMDAs that will avert their attention to land value capture tools for mobilizing

additional revenues. MMDAs have the legal mandate to buy land from customary land owners,

service such land and reallocated to private developers and also engage in land banking

activities. However, over the years, MMDAs have not been able to fulfill this obligation.

Therefore, MMDAs can form strategic partnerships with the land developers by facilitating

access to peri-urban customary lands through land banking schemes and engage these developers

to provide infrastructure services.

Local Land Use Planning and Enforcement of Planning Instruments

The case studies have demonstrated that the success of the project related sales value capture is

dependent on micro level land use planning and enforcement of planning regulations. In all the

cases, the preparation of local land use schemes preceded land developments. Land developers

have also demonstrated that they are able to follow through the implementation of land use

schemes quite effectively. Land developers build master planned communities in accordance

with the local land use plans they have prepared. In essence, they ensure that the benefits of land

use planning are realized by all residents. Besides, they ensure that laid down local land use

plans are followed, and approval is given by the respective MMDA. They recognized and

appreciated the fact that it is important for the local land use plan implementation to be a shared

responsibility. For example, the TDC collaborate with the Kpone Katmanso Municipality to

approve land use plans and the granting of building permits. GACL through GCAA also ensures

commercial buildings are consistent with building heights limits around the Airport. Unlike

customary landowners whose land use plans are aimed at facilitating land sales, land developers

follow through the implementation by monitoring each process of land development to ensure it

is consistent with local land use plans. The contractual relationship between land developers and

residents of planned communities also ensures effective enforcement of the local land use plans.

This relationship requires land developers to provide an organized community and ensure that

they deliver on each of the terms of the contract to their tenants.

Urban Management and Development Outcomes

The activities of the land developers suggest that they are able to organize and plan cities’

extensions and initiate urban redevelopment schemes. The practices of these land developers

shape the urban development outcomes of GAMA. The three case studies show three models of

organizing urban development:

1. Micro-level planning of peri-urban land into gated communities has influenced the

direction of future development of GAMA and also impacted the development of

surrounding communities because of the off-site and on-site infrastructure services land

developers provide.

2. The site and services schemes implemented by the TDC facilitates in organizing urban

development and managing planned cities extension. Though the site and services

scheme is an old concept in land development history, the success of its implementation

within the TDC communities demonstrates the potential for management urban

development. If the activities of these land developers are well coordinated by the

MMDAs structure plans, MMDAs would be able to direct the growth of the city and

ensure the orderly development of GAMA.

3. Guided urban redevelopment and implementation schemes is also an effective tool in

urban management. The Airport City project has demonstrated that parastatal land

developers can organize and led the process of urban redevelopment in partnership with

the private sector.

However, the practices of land developers and how they facilitate in shaping urban development

outcomes of GAMA must be discussed in the context of the governance approach to land

development. Governance approach to land development refers to the rules and regulations that

control public actions in land development and the use of property rights in land and building

(Gielen et al. 2017). Two broad governance approaches to land development are established in

the extant literature. One approach is the active or public approach. This approach requires

public bodies or governmental institutions to prepare land use plans (structure and local plans),

regulate the use of the land through development controls, purchase and assemble the land,

install public infrastructure and finally dispose the land to private developers for them to

construct the building and sell to private individuals. The other approach is the passive or private

approach. This approach calls for public or governmental institutions to prepare land use plans,

regulate the use of the land and allow private developers to install the infrastructure, develop the

land, or sell it to other individual developers to construct their houses (Gielen et al. 2017;

Hartmann and Spit 2015; Van Der Krabben and Jacobs 2013). Both approaches have

implications for value capture. When public institutions control the chain of planning, servicing,

and building, they are able to manage the processes of value creation. As such, they will have

capacity to institute and capture land values resulting from the public actions. On the other hand,

if the process of planning, servicing, and building is undertaken by private institutions, then the

value created will inure to them.

However, the realities are that MMDAs have not been able to pursue the active approach to

urban land development over the years despite their legal mandate in this respect due to

inadequate human, financial, technical capacities and sometimes sheer ineptitude. Thus, in

Ghana, and particularly the GAMA, the governance approach to land development is more

similar to the passive or private approach. The roles of the MMDAs have barely been reduced to

approving or rectifying land use plans prepared by landowners and land developers. For

example, a Physical Planner in one of the MMDAs studied noted that land use planning is

supposed to be initiated by the Assembly, but the chief and other landowners have taken it up.

According to the respondent, the landowners engage the services of private consultants to

prepare local land use plans and apply to the Assembly for approval. When the Assembly gives

approval, the chiefs go ahead and start the implementation. Therefore, customary land owners

and real estate developers more or less control the entire process of planning, servicing, building

and occupation. The MMDAs have also not been able to coordinate and harnessed the creative

models that private developers have developed over the years to ensure that there is coordinated,

urban land development and management within GAMA. Hence, customary landowners reap the

windfalls of urbanization through land sales due to sprawling of the metropolis, and land

developers capture both the windfall of urbanization and the value uplift that result from

infrastructure provision.

The Airport City and Oak Villa Estate cases also highlight the collaborative management of

planned communities where residents have formed property owners’ associations in order to

engage land developers on site-specific problems and proffer joint solutions. There is an

increased level of engagement between property owners’ associations and land developers in the

management of these urban development sites. This enhances both parties’ problem-solving

skills to address urban development issues within these specific sites. Thus, it ensures that land

developers are constantly in touch with residents to fix problems with security, maintenance of

street lighting, and other related neighborhood issues. This model provides the impetus for urban

managers to engage major stakeholders in urban management through joint management models

such as the one between property owners and developers. Collaborative management of urban

land developments can ensure the sustainability of such projects and lead to continuous revenues

flows from property rates. It can further enhance better negotiations and effective stakeholders’

engagement in implementing both fee-based and development-based LVC tools.

Funding Strategies for Urban Infrastructure

The cases show that land developers finance infrastructure services with internally generated

funds. They leverage the funding for these projects from their operations in other projects. For

example, Oak Villa Estate finances infrastructure services through profits made from sale of

completed houses from other projects. This type of financing model helps the project developers

to execute land developments and make profits without having to worry about paying any

interest on loans they might have borrowed. However, it might also lead to project delays

because the rate at which the funds are generated determines the rate at which projects are

completed. Nonetheless, projects are scheduled in phases depending on the financial strength of

the land developer. These leverage schemes are made possible where a land developer has other

development sites with completed projects so that proceeds of sales from these development sites

are reinvested in the further development of other projects. Thus, the leverage financing schemes

are very robust with land developers that have been in the business for a long time like the TDC

with multiple sites and landed properties from which, ground rents are paid annually. This

enhances the financial position of the land developer. Besides, land developers with diversified

businesses are able to leverage funds from profits from one business and invest it in land

development activities. A clear example is the GACL, which was able to secure funding for the

Airport City project from other non-aeronautical operations. The success of raising funds

through land sales in the Airport City project enabled the GACL to embark on the Airport City II

project. Plots in the City II project have already been sold, but infrastructure and amenities are

yet to be provided. Besides, land developers could also leverage their assets to easily acquire

loans/financing to fund these developments.

Another strategy the land developer use to raise additional revenues is through annual ground

rent payment by sub-lessees. Sub-lessees of land developers must pay annual ground rents in

accordance with the term of the sub-lease. Depending on the terms of the lease, annual ground

rents are reviewed every three years. For example, GACL charged 15% of the land value as

annual ground rents for the period 2017 to 2019. Thus, the annual ground rent generates

continuous revenues for these land developers. However, it must be noted that these land

development companies collect the majority of the leasing premiums on the land up-front.

Subsequently, sub-lessees are required to pay annual ground rent or land rent through the term of

the lease.

In addition, the track record of accomplishment of the land developer also helps in raising

additional funds through the down payment schemes. In these schemes, the prospective

purchaser pre-finance either serviced land or house purchase with an initial deposit before

servicing of the land or actual construction of the house begins. For example, both TDC and Oak

Villa developers have raised substantial funds from prospective purchaser pre-financing models.

Besides, partnership arrangements where some land developers and the respective municipal

assembly share the development permit fees enhance the financial position of the land developer.

The land developers’ project related land and property sales enables them to already recover their

cost and make some margin of profit. Thus, if the land developer is allowed to take part in

sharing the permit fees, then is an additional revenue to the developers. The land developer can

use their share of the fees to leverage the funding for further infrastructure provision at other

sites. This type of strategy is helpful to both parties in the sense that it creates opportunities for

further engagement between the parties for orderly urban land development.

The land developers have multiple sources of revenues. The project-related land sales are just of

one of the revenues streams. Therefore, the developers are able to continue in business based on

diversified sources of funding such that the can ensure the provision of infrastructure on each

project site. This finding is consistent with Suzuki et al. (2015) who provide that multiple

sources of funding is an enabling factor for the design and implementation of the Development-

Based LVC.

Security of Land Tenure

The land acquisition arrangement by land developers enhances land tenure security and builds

confidence and trust among prospective purchasers. Parastatal land developers such as the TDC

and GACL have long-term land lease arrangements on state lands. This type of arrangement

eliminates multiple claims because the land ownership is not in dispute. Prospective purchasers

are more comfortable buying land from these parastatal institutions because of the assurance that

no one will counter-claim ownership of the land, as is more common with customary land. It is

this through type of assurance and confidence in security of tenure that Suzuki et al. (2015) and

Peterson (2009) demonstrate that public land ownership is important for project-related land

sales value capture.

Guarantee for the security of land tenure is also true for private real estate developers like Oak

Villa Estate. They acquired large tracts of land from traditional landowners under private treaty.

However, the company has to do much due diligence to ensure that they bought the land from the

right traditional landowner. Therefore, they engage the right professionals in undertaking the

land acquisition process just to ensure that they buy litigation-free land. This type of land

acquisition arrangement instills confidence in prospective purchasers because they would not

have to deal with the original landowner directly, so the fear of not being able to identify the

right customary landowner is eliminated. Also, prospective purchasers of land from the land

developer have certain level of confidence that, they will not be evicted without recourse by the

contractual arrangement they have with the developer. Therefore, many prospective purchasers

of serviced plots and estate houses prefer acquiring land and houses from land developers. Thus,

the Oak Villa Estate case also demonstrates that public landownership is important, but it is not

absolutely necessary for the implementation of project-related land value instruments (Suzuki et

al. 2015).

Collaboration and Partnerships with Key Stakeholders

The case studies also demonstrate a certain level of collaborative efforts between land developers

and key stakeholders in the implementation of value capture through project related land and

property sales. These collaborative arrangements fall into two categories: (1) Collaboration with

public sector agencies and; (2) Collaboration with other private sector agencies. The land

developers collaborate with public sector agencies in the areas of land use planning and

approving building permits and in some instances, building permits fees sharing. However,

concerning the approval of land use schemes and building permits, it is a statutory obligation that

does not require any collaboration. Nonetheless, land developers such as the GACL and TDC

have collaborated with public sector agencies beyond the statutory obligations. For example,

GACL have collaborated with the Land Commission, Town and Country Planning, Department

of Urban Roads, Accra Metropolitan and La Dade Kotopon Municipal Assemblies in the design,

planning and implementation of the Airport City Project. Besides, land developers have also

collaborated with some private sector agencies for successful implementation of land

development projects. For example, Oak Villa Estate has a partnership with the main mortgage

bank where it refers its clients for mortgage financing. This helps the land developers to sell their

properties. Again, the company has strategic partnerships with recognized banks that provide it

with prospective clients. These banks also provide special mortgages to their staff refer the staff

to this land developer to acquire the houses. It is a win-win partnership arrangement. Banks are

able to expand their mortgage portfolio, and the land developer is able to sell his properties and

expand operations to other urban sites. Moreover, the Airport City project was successful partly

because of the strategic partnerships it developed with commercial developers.

However, it must be noted that the collaboration between the parastatal land developers such

TDC and GACL, and public sector agencies has not led to the sharing of land value increment

through the project related land sales strategy of value capture. This is because, the nature of the

collaboration has also always been geared towards promoting urban development and improving

infrastructure services delivery. MMDAs and other government agencies perceive these types of

collaboration as tool for promoting private sector participation in urban development. Thus, the

opportunity of sharing in the value created by the collaborative efforts between the local

authority and the developers is lost.

Revenue Streams for Municipalities

The activities of land developers have enhanced the revenue potentials of the respective

municipalities. This revenue comes from property rates and development permit fees (Figure 14).

Figure 14: Revenue Streams from Land Developers

Land developers make the collection of these revenues easier because of the organized nature of

the communities’ structure. For example, where a private developer like Oak Villa Estate builds

and sells the properties to individuals, it effectively transfers ownership of the properties to the

individual purchasers. These individual purchasers are obliged by law to pay property rates on

annual basis. Thus, billing of property rates is quite simple as properties can easily be identified

Land Development Site

MMDAs

Benefits

Annual property rates

Building permit fees

Creates opportunity for MMDA

to levy development charges

and owners easily traced. In addition, granting of development permit is more effective because

property owners are able to acquire land title from the Lands Commission because the head lease

is registered and all subleases can be registered with reference to the head lease. Therefore, by

the organization of land developers and their respective developments, municipalities are able to

generate more revenues with little transaction cost without having to formally partner with these

developers.

In addition, the activities of the land developers create opportunity for MMDAs to raise

additional revenues through development charges. Certainly, the development sites of these land

developers have impacts on the overall infrastructure network of the respective MMDAs. Thus,

land developers that have not made In-kind contribution to defray the cost of bulk and connector

infrastructure, the respective MMDAs can levy a one-time off development charge. This charge

will be used to cover the cost of providing bulk and connector infrastructure in order to minimize

the impact of the development on the infrastructure network within the MMDA.

High-Quality Human Resource and Technical Expertise

Land development operation is a complex activity that requires professionals with the requisite

expertise to be able to execute projects successfully. It entails a complex value chain which

requires expertise at each section of the value chain. The land developers have requisite

professionals including land and quantity surveyors, land administrators and valuers, urban

planners, procurement specialists, sales and marketing, and entrepreneurs. In addition, land

developers have adequate and well-resourced administrative support units that provide critical

support services. These support services include security services, sales and marketing and

procurement.

Strategies for Designing and Implementing Value Capture Instruments

From the analysis of the legal value capture instruments such as development charges,

betterment levies and property rates and current implementation challenges, it is clear that

MMDAs need some strategies to engage key stakeholders in the form of collaboration and

partnerships in order to implement some of these tools effectively. In this section, I discuss the

strategies for the design and implementation of value capture in relation to two broad

classification of instruments. First, I discuss strategies for the implementation of the Tax or Fee-

Based Instruments in general (development charges, aspect of betterment of levies and property

rates). These instruments have already been designed and are backed by legislation and

administrative process. Second, I discuss strategies for the design and implementation of the

project related land sales instrument based on the lessons learned from the case studies.

Strategies for the Implementation of Tax or Fee-Based Instruments

It is clear that it is difficult to implement betterment levies in its entirety as provided by the

legislative instrument due to technical difficulties of attribution, geographical coverage, and

timing of the levy in relation to any value appreciation. But the legislative provision on

betterment that seeks to charge betterment on financial transactions on urban land transaction is

feasible under the current land markets development and fiscal decentralization framework in

GAMA. Therefore, to be able to implement some aspect of betterment levies, development

charges, and property rates effectively, MMDAs should use the mutual gains strategy. Mutual

gains strategy is a tool used to design and implement land use decisions and deal with land use

disputes in the design and implementation process. This approach is a multi-faceted strategy that

leads to productive stakeholder engagement and draws its principles from different fields such as

negotiation, consensus building, collaborative problem solving, public participation, public

administration deliberative democracy, and alternative dispute resolution. The approach was

employed by Nolon, Ferguson, and Field (2013) in managing and resolving land use planning

disputes in the USA.

The basic tenets of the mutual gains strategy are: (1) it based on stakeholders interest and

requisite technical information; (2) it involves key stakeholders and municipal technical officers

and elected decision makers; (3) it incorporates all stakeholder interests and generates the

requisite technical information relevant to key stakeholders; (4) it works on building strong

community and public stakeholder engagement and technical planning skills; and (5) it ensures

that the engagement with the key stakeholders is above and beyond information sharing and

views (Nolon, Ferguson and Field 2013). Thus, bearing in mind the realities in GAMA, this

paper proposes a modest application of mutual gains strategy in the design and implementation

of LVC. Therefore, following the basic tenets of the mutual gains strategy, the MMDAs should

follow the five steps discussed below.

Build the Requisite Technical Information and Requirements for Each Capture Tool

The MMDA should start with building adequate and reliable technical information on each of the

value capture instruments currently allowed by legislation. The MMDA should identify,

document and build a database on all proposed urban infrastructure projects and the type of

urban services and infrastructure that have impact on land and property values. This requires an

inventory of existing and proposed infrastructure services that are provided directly or indirectly

by the municipalities or other government agencies. The inventory taking should be led by

Municipal Engineers, Development and Physical Planning Officers of the MMDA. The

Municipal Chief Executive (MCE) must provide strategy leadership and vision that seeks to

improve the MMDA’s IGF through land-based instruments. There is the need for the MMDA to

prepare infrastructure investment plans from which they can estimate the cost and schedules of

implementing such plans. Information on infrastructure investment and services will help the

MMDAs to make simple calculation on the impact of each land development on the existing and

proposed infrastructure. This will serve as a guide for levying development charges in order to

offset the cost and impacts on the district’s infrastructure network. Also, such information will

help the MMDA to determine development charges levy rate in a more transparent and

consistent manner as echoed by Berrisford, Cirolia and Palmer (2018).

The MMDA must also build technical information on betterment levies. This information should

include the nature of demand and supply of developable land within the jurisdiction of the

district. Demand and supply influence urban land transactions. Thus, the information should

include current and projected land markets development within the MMDA jurisdiction. The

MMDAs will need to examine current and projected urban population and economic growth rate

and trends in both residential and commercial property development within the GAMA in order

to understand the urban land transactions. This type of information will guide the MMDA in the

implementation of betterment on financial gain on urban land transactions. Also, as foundation

step to implement betterment levy in accordance to the legal provision, the MMDAs should

include the coverage and ‘benefits’ zoning of infrastructure services. The coverage and benefit

zoning requires municipalities to estimate the benefits that accrue to property owners and the

extent in terms of distance that each property enjoys these benefits. Benefits should be

categorized into tangible and non-tangible. This data will provide adequate justification for

levying charges such as development charges and betterment levies in addition to the property

rates.

Besides, another technical information required is information on property addresses and street

names. This will facilitate the billing and collection of property rates and also enhance the

opportunities for levying development charges. There is already an on-going project on property

addressing and street naming in most of the MMDAs. Therefore, this information can be

managed and stored in ways that are easily accessible.

However, building credible technical information on infrastructure services goes beyond the

‘business as usual’ mindset of the municipal officers. This mind-set focuses on following the

required processes laid down by law without being creative to engage and understand key

stakeholders and tax payers’ issues and interests. Building technical information requires

conscious effort, creativity and innovation, and ambition of municipal leadership with a genuine

desire to use the statutory instruments to raise additional revenues. Thus, visionary and

developmental oriented leadership at the municipal level is necessary for developing a good

technical information aimed at implementing statutory value capture instruments for raising

additional IGF.

Identify, Assess, and Understand Stakeholders Issues and Interests

The Physical Planning Officers and Municipal Engineers of each MMDA should identify the

relevant stakeholders under each value capture tool and gather as much information about each

stakeholder. In the process of identifying the stakeholders, the municipal officers should evaluate

the perspective of stakeholders relative to each value capture tool. This will facilitate in

understanding stakeholders concerns and interests. The primary focus of this identification and

assessment of stakeholders should be to understand the various levies and charges each

stakeholder is already burdened with vis-à-vis the benefits they enjoy from the MMDAs

infrastructure service provision. There are stakeholders that will be affected by more than one

instrument and therefore, there is the need to classify them. This will also help the MMDAs to

better communicate and engage stakeholders effectively. Stakeholders could be classified into

three main groups: investors, wind-fall beneficiaries, and city community in accordance to

Jillella, Matan, and Newman (2015). The investor group of stakeholders are those who provide

capital investment in infrastructure services within the MMDAs. This group include the MMDA

itself and other state agencies that provide infrastructure services as the state social obligation.

Thus, the investor group in the context of MMDAs in Ghana must consider cost recovery

strategies in order to generate additional revenues for the MMDA to provide more infrastructure.

The wind-fall beneficiary group of stakeholders include those who will benefit from the

implementation of urban infrastructure investment plans through proximity of such projects and

improved accessibility such as land and property owners, and local businesses. The third group

of stakeholders that the MMDA should consider is local community members that will have

direct access to the proposed infrastructure such assembly members, traditional authorities, and

community-based organizations.

Conducting assessment aimed at understanding stakeholders concern and interests does not need

to be expensive. The MMDAs should consider doing background research using stakeholder

interviews techniques. The Nation Builders Corps (NABCO) staff and National Service Persons

who are already paid by the national government should be used to conduct this assessment. This

will reduce the cost. Physical Planning Officers and other heads of the revenue mobilization

departments should coordinate and supervise the assessment. This assessment should cover

stakeholders’ perceptions on key issues on the MMDAs levies and charges, provision of basic

services, range of stakeholder interests, and willingness and ability to pay. In addition, the

assessment should also include the willingness of stakeholders to collaborate and negotiate with

MMDAs in the implementation of land value capture tools. The assessment team should produce

a written report with practical recommendation on the way to proceed with these value capture

instruments.

Design a Process of Collaboration with Key Stakeholders

Mobilizing revenues from monetized land values through various instruments require some level

of collaboration with key stakeholders. Thus, the MMDAs must design a process that will guide

collaboration with relevant stakeholders. In designing the process for collaboration, the MMDA

should be clear on the type and level of collaboration it seeks to establish with key stakeholders.

For example, instruments like development charges linked to granting development permit, the

MMDA might wish to inform property developers and let them know how the levy is calculated

and the intended utilization of such levies for transparency purposes. For other stakeholders, the

MMDA might be interested in collaboration that seeks advice and recommendation for improved

land-based revenue generation. For instance, the MMDA can ask the LVD to advise them on the

financial gain on urban land transactions within their jurisdiction. Yet, other stakeholders the

MMDA might want to involve them in actual decision-making process. For example, the

MMDA might want to collaborate with the LVD to undertake baseline valuation on properties

for betterment purposes during each revaluation period as specified in the law. So that, the

differences in property values between the first valuation and the revaluation will represent the

betterment based on which a levy rate is determined and applied. Thus, the level of collaboration

will seek to ensure joint decision-making and synergies on various infrastructure projects in

ways that will lead to levying development charges, property rates, and some aspect of

betterment.

The next level in the collaboration process should entail defining the goal for collaboration. This

goal should be defined to include the need for participatory implementation of the various tax or

fee-based instruments. The revenue mobilization department of each MMDAs should lead the

process of formulating a goal for collaboration to guide key stakeholders in the deliberation

process. In addition, the MMDAs should create awareness and share information with the

identified stakeholders to enhance effective deliberation on possible options for implementation

of the various instruments. The MMDA should use its established structures to create awareness

of the implementation of LVC. These structures already exist but have not been tuned to

mobilizing stakeholders for implementation of LVC. The structures include community

development department that have records on localities, and their Assembly members, the budget

fora for consultation on annual budgeting, assembly members and unit committees, trades

associations, traditional rulers and property owners. Municipalities should be able to

communicate both tangible and non-tangible benefits to existing and proposed infrastructure

interventions.

In addition, the MMDAs should indicate to stakeholders, the total amount of money estimated to

be raised from value capture instrument and how that money is going to be used. The MMDAs

should also elicit stakeholder ideas on how to use the money raised. This is critical for the

implementation of the development charge and betterment levy. However, according to Suzuki et

al. (2015), tax or fee-based instruments do not necessarily require any stakeholder engagement,

but the peculiarities of the emerging discontent of property owners on the service provision

levels of municipalities, require some level of engagement and justification.

Design the Process of Deliberation for Building Trust Among Key Stakeholders

After designing the process of collaboration, the Municipal Engineers and Physical Planners who

are key officers for revenue mobilization of the respective MMDAs should constitute a

committee of interested stakeholders. This committee should be tasked with the responsibility of

developing practical options for the implementation of each of the tax or fee-based instruments.

The Physical Planner should play the role of a facilitator who will guide the committee on the

key issues pertaining to each value capture instruments and develop a work plan for the

committee. The committee members should consult their respective associations or groups they

represent with technical information concerning the value capture instruments and solicit ideas

for developing innovative implementation model for each of the instrument.

In addition, it is important for the Physical Planner who is facilitating the deliberation process to

demonstrate expertise and listening skills to the committee’s discussions and suggestions. The

Planner should discuss frankly the implementation challenges of each instrument and also

highlight the revenue potential for each tool. Besides, the planner should discuss the proposed

infrastructure development within the district and demonstrate how the MMDA is addressing the

infrastructure needs. This should include how much the MMDA expect to raise from the

implementation of each of tool and how the proceeds from the implementation is going to be

used to address stakeholder concerns. Open and dispassionate discussions with the interested

stakeholder committee will ensure transparency and lead to trust building. It is also important

that, the MMDA provide the committee with all logistical support including some form of

remuneration for committee members since their work will lead to improving on revenue

generation.

Building trust among stakeholders, especially MMDA and citizens, is difficult because of the

negative perception community members have concerning the belief that MMDA do not use the

levies, fees, and charges collected to improve on the local infrastructure. This perception can

only improve when the MMDAs demonstrate their commitment during the deliberation process

and subsequently implement what the committee decides on. Also, the stakeholder committee

and the MMDAs should end their deliberation with the possible option for implementation with

community contracting arrangement that seeks to spell out what output is expected from

stakeholders and the MMDA.

Design the Process of Building Long Lasting Partnerships

Proposals for any possible option for implementing each of the value capture instruments should

lead the MMDAs to building an effective partnership relationship with key stakeholders. It

should also include building synergies with other government agencies and programs. Thus,

Municipalities and Land Valuation Division should have partnership relationship concerning

valuation of properties for rating purposes and also for the pre- and post-valuations of properties

in the case of betterment levies. The current situation is that; land valuation is seen as more of

consultants to MMDAs for the assessment of property values for rating purposes. In this sense,

MMDAs have to pay the full cost of the valuation services provided by the Land Valuation

Division. Therefore, in cases where MMDAs do not have the wherewithal to engage the

Valuation Division, properties are not assessed. Building effective partnership entails

recognizing each party as a partner with some rights and benefits and not as a service provided

for by an agency that has to be paid a fee (Peterson, 2009).It requires working together to

achieve a common purpose where each partner is involved in the entire process of revenue

mobilization. Thus, MMDAs should recognize the Land Valuation Division as a partner where

the division provides valuation services and benefit from the revenues that accrue from these

properties in the mutually agreed formula. If through the partnership, MMDAs are able to

undertake regular revaluation of properties for rating purposes, then, it will be possible to track

property prices changes between assessment period and this will be useful data for levying

betterment.

Besides, the deliberation proposals should take advantage of already existing initiatives either

from the central government or the private sector. For example, the central government has a

policy agenda on digitizing land documentation through the Ghana Land Enterprise Project.

Besides, the central government has an agenda of decentralizing and equipping the Land

Valuation Division, and therefore has introduced direct technical support on property valuation

to MMDAs, through the Electronic Property Mass Appraisal System for Rating Valuation

project. This project seeks to digitize MMDAs maps and the entire process of valuation for

rating. There are several examples of public private partnerships (PPP) between MMDAs, non-

governmental organizations (NGOs), and technology companies with respect to property rates

valuation, billing and collection. An example of this partnership model was implemented at Ga

East and La Dade Kotopon Municipalities where a technology company (Subah Ghana Ltd)

provided the financial resources to the municipalities and supported the Land Valuation Division

with mobile devices to undertake property rating valuation. Again, the PPP model still

recognized the LVD as the main stakeholder and not a partner and they had to pay the full cost of

their services.

The PPP model that has emerged in property rating should be enhanced to include development

charge calculation and betterment valuation. Indeed, Subah Ghana Ltd has developed the

Enhanced Revenue Management System (ERMS). This is an end-to-end web-based platform that

requires limited initial capital outlay. It delivers critical revenue streams by MMDAs including

(1) tracking payment for municipal services; (2) property Rate Management; (3) development

permitting; (4) business operating permitting; (5) rent revenues; (6) rate impost computation; and

(7) call center support for all municipal services. Therefore, MMDAs need orientation and

awareness of the potential of development and betterment levies to raise additional revenues.

These could be included in their PPP with technology companies and other fee/rates collection

companies.

Strategies for the Design and Implementation of Project Related Land Sales

From the analysis of the case study land developers, it is clear that the major tool used to capture

land values is the project related land and property sales. Land developers benefit from land and

property sales while MMDAs benefit from annual property rates, and development and building

permits fees. Apart from the revenue streams available to MMDAs, the tool also creates

opportunities for generating additional revenues through development charges and in-kind

contribution for MMDAs. The project related land sales tool is precipitated by the passive

approach to urban land development. Thus, land use planning and finance are critical to the

success of the project related land sales. However, MMDAs have not been able to undertake

project related land sales due to inadequate capital, and lack of initiative, entrepreneurial mind-

set and share ineptitude. Therefore, the value capture through project related land sales is driven

largely by private sector. In this context, the MMDAs need to adopt strategies that aim at: (1)

streamlining the operation of land developers through effective municipal-level land use

planning and enforcement; and (2) collaborating and partnering with land developers to be able

implement the project related land sales value capture tool in a broader scope that allows

MMDAs to share part of the revenues of the project related land sales.

Strategies to Ensure Effective Municipal Level Land Use Planning and Enforcement

First, the MMDAs should undertake an inventory on the nature of land ownership, principal

traditional landowners, and the extent of their land ownership. The Municipal Physical Planners

should lead in the inventory assessment because of their knowledge and skills in land use

planning. The Lands Commission can assist the MMDA on the land ownership structure and

principal landowners within their jurisdiction. Land owners should be identified and classified in

terms of the customary and public tenure. The customary landowners should be classified into

stool, family, or individual owners with their relative land coverage areas. Besides, the inventory

should also include communities with land use schemes, the status of implementation, and peri-

urban communities without land use schemes for MMDAs that still have peri-urban developable

lands.

After the inventory and identification of key landowners, the MMDA led by the Physical Planner

should sensitize landowners on the benefits of land use planning and enforcement. The

sensitization should include the need for landowners to ensure that prospective purchasers

begin low-level informal engagement with traditional landowners. This engagement should

include building the capacities of landowners to document land transaction and share information

on land transactions with the Assembly. In areas that have customary lands secretariats (CLSs),

the MMDA should engage with the heads of these CLSs to share information. This informal

engagement should advance to formal collaborative decision-making through a Memorandum of

Understanding (MOU) where landowners will be encouraged to share details of land transactions

including the parties of every transaction with the Assembly. It should include terms that seek to

encourage landowners to engage the Physical Planning Unit of the MMDA directly in the

preparation of land use plans. The engagement with traditional landowners should embody a

clear motive of the municipality as a statutory planning authority that seeks to facilitate and

streamline land use planning. A clear desire of the municipality to collaborate with traditional

landowners in land use planning for their mutual benefits must be clear. This engagement is very

relevant for peri-urban municipalities that still have developable lands. In addition to engaging

landowners in collaborative planning, municipalities could use land readjustment tools within

traditional land holdings where ownership is fragmented to ensure the economies of scale in land

use planning.

To ensure effective collaboration, the engagement process should include public land

management institutions – Lands Commission, Land Use and Spatial Planning Authority and

OASL. This will help organize land use planning and gradually give municipalities the

opportunity to facilitate urban planning, and implementation of local land use plans. Besides, the

MMDA should collaborate with the Lands Commission in a way that will lead to sharing of

information on the details of land transactions that have been registered within the Assembly

jurisdiction. This information will help the MMDAs to monitor physical development and

enforce planning regulations.

Furthermore, land developers should be identified and their respective operation areas mapped.

The Physical Planners of the respective municipalities should assist in identifying land

developers and mapping of their operational areas. Land developers should be classified into

small, medium, and large. This classification should be guided by land developers’ existing

estates and prospective estates where large tracts of land have already been acquired; existing

local land use plans (both approved or pending approval); relative size and capacity of each

developer; nature of their operation (master-plan, serviced plots or hybrid); and their coverage

areas. This information will help municipalities to be able to identify and engage real estate

developers on mainstreaming their operations and ensuring synergies in planned infrastructure

provision.

There is room for MMDAs to promote coordinated development among land developers through

municipal-level planning. That is, local authorities establish a spatial development framework

(SDF) and municipal land use plans for regularizing activities of land developers, define

minimum permissible lot sizes, and demarcate trunk roads. Besides, an area that is declared a

planning area easily acquires an enhanced value. This could be a justification to levy betterment

or other forms of LVC.

Develop Strategic Partnerships with Land Developers to Implement Project Related Land Sales

The municipalities that still have peri-urban developable lands should develop strategic

partnerships with land developers to undertake land banking projects. The focus of this

partnership arrangement should be to ensure that municipalities provide the enabling

environment for land developers to finance the land banking projects. The MMDAs, through

their spatial development frameworks, should identify growth areas for future development,

identify and engage landowners in these areas to make lands available for future development. In

order to secure lands in the growth areas, the MMDA should partner with land developers to pre-

finance the acquisition of these lands. Besides, the MMDAs should facilitate the development of

these growth areas by providing the requisite trunk infrastructure through partnership with other

central government agencies responsible in providing such infrastructure. These land banks

could be sold later as future development engulf such areas so that the MMDA and the land

developer can devise a sharing formula based on their respective inputs in the project related

land sales.

Furthermore, MMDAs can also engage and encourage landowners in projected future growth

areas to form trustees’ landholding companies. The Assembly can then facilitate the process of

linking trustees’ landholdings companies to recognized and credible land developers to develop

private-private partnerships in land development. Under this arrangement, land developers might

not need to pay for the full value of the land outright but allow the trustees’ landholding

companies to be partners in the land development process. The concept of trustees’ landholding

companies is not new in the GAMA. For example, the East Dadekotopon Development Trust has

been in operation since 2002. It has proven to be an effective tool in management customary land

disputes and promoting equitable land development for the benefits of landowners. These

concepts should be promoted by the MMDAs in developing land banks for future development.

In addition, the MMDA should seek for partnerships that will ensure that other land value

capture tools such as development charges and In-kind contribution are incorporated in the

partnership arrangement. This partnership arrangement should be gradual, starting from very

modest levels where municipalities would begin with the medium to large-scale developers

whose developments have benefitted from public off-site infrastructure. Municipalities would

engage these developers and their clients about the need to pay development and betterment

charges. Besides, building effective partnership with land developers, will ensure that, MMDAs

introduce a more formal approach that will require land developers to contribute to providing

infrastructure in the municipalities through in-kind contribution. The current practices of In-Kind

contribution is very limited and not formalized. Therefore, Physical Planners and Engineers use

their discretion which can lead to abuse and corruption especially as the process is subject to

negotiations with the developer.

Besides, municipalities should use incentives such as allowing land developers to take 70% share

of development permit fees from within the estate’s enclaves and business-operating permit free

periods for developers that are willing to include affordable housing schemes for low-income

earners within their estates. This will encourage land developers to develop all-inclusive

communities. By so doing, municipalities can support and improve on the symbiotic

relationships between gated communities and surrounding neighborhoods. In this PPP

arrangement, the land developer will continue to secure private funding to develop their estates

and the municipality will provide the incentives and enabling environment.

Thus, the municipalities should be the fulcrum for bringing all the stakeholders together and

building collaborative partnerships with respective stakeholders at different levels. For example,

partnership arrangement with developers can enhance the opportunities for planned cities’

extension for peri-urban municipalities within GAMA. Developers will have the opportunity of

working with these municipalities to design and implement development-based value capture

instruments in new areas.

Moreover, for inner-city redevelopment as in the case of the La Dade Kotopon Municipality, the

municipality through these partnerships can identify sites for redevelopment and engage

developers in undertaking the projects. In the process, the MMDA can introduce the sale

development rights value capture tool that allows developers the right to build at greater densities

than would normally be allowed by the zoning and building regulations. However, it is noted that

inner-city redevelopment will require infrastructure retrofitting which could be very expensive,

but the incentives provided by the municipalities can encourage developers to undertake this

redevelopment. One strategy would be for the municipality to forgo the normal development

permit fees and only charge for additional densities that the developer may desire to develop.

Conclusion

The study examined the design and implementation of value capture instruments within the

context of complex land tenure and deficient land uses regulatory regimes in the Greater Accra

Metropolitan Area in Ghana. It examined land value capture tools within the framework of fiscal

decentralization and the ability of MMDAs to use these instruments to raise additional revenues

to support urban infrastructure financing in local government areas. The study also examined

how parastatal and private land developers capture values through project related land

development activities. It established that the current legal and institutional framework mandates

MMDAs to design and implement three land value capture instruments namely, development

charges, betterment levies and property rates. In addition, in-kind contribution is another

instrument being implemented by some MMDAs. This type of instrument is not backed directly

by any legislation but is consistent with findings from the literature on land value capture and

land-based financing. Parastatal and private land developers also capture value through projected

related land sales or serviced land leasing strategies.

The governance approach to urban land development has led to inadequate comprehensive land

use planning by MMDAs within GAMA. Landowners have led in the preparation of land use

schemes that are not adequately coordinated by the MMDAs. Thus, the benefits of land value

appreciation inure to customary landowners, parastatal and private land developers. This is

precipitated by the complex tenure regimes where customary landowners hire consultants to

prepare land use schemes to aid in land sales and sometimes peri-urban lands are sold without

planning layout or schemes. Added to these is inadequate implementation of land use regulations

and enforcement by the MMDAs to the extent that, even where land use schemes exist, the

implementation is left in the hands of landowners and developers. Though, there are adequate

legislations and structures for sound land use planning, MMDAs in GAMA have not been able to

adequately plan and follow through with implementation. Thus, the proposition that sound land

use planning is critical to the implementation of land value capture instrument is therefore

affected by the current practices. However, parastatal and private land developers have been

successful in the implementation of the project-related land sales because of their ability to

undertake micro-level land use planning and to enforce local land use regulations. This supports

the proposition that sound land use planning is instrumental to the implementation of the

development-based LVC as echoed by Suzuki et al. (2015).

The findings suggest the tax or fee-based instruments have more potential for implementation in

GAMA as compared to the development-based LVC due to the current governance approach to

urban land development. Development charges and in-kind contribution have the highest

potential of implementation by MMDAs because these require little technical expertise and also

do not require any special stakeholder engagement. Thus, the implementation of development

charges and in-kind contribution is less complex. These instruments can be implemented either

through the tax or fee-based or development-based instruments irrespective of whether the

development is driven by parastatal and land developers or even private individuals. The African

Centre of Cities (2015) has corroborated these findings by highlighting the potential

development charges to be implemented as a foundation tool to effective land-based financing in

Sub-Saharan African countries. The project-related land sales are only implemented by parastatal

and land developers. The MMDAs have never implemented the provision that mandates them to

go into project related land sales. Therefore, under the current state of land tenure complexity,

lack of initiative and ineptitude of MMDAs, the fee or tax-based instruments is more feasible to

implement in Ghana contrary to the findings of Suzuki et al. (2015) and Peterson (2009).

The findings also suggest that building effective partnerships with key stakeholders is critical to

the effective implementation of betterment levies and property rates. Though Suzuki et al. (2015)

argued to the contrary but the current implementation challenges of these instruments require

some level of partnerships. Again, strategic partnership arrangement with land developers is

essential to the implementation of the project related land sales instrument. MMDAs do not need

to invest huge sums of money to undertake this by themselves, since parastatal and private land

developers have demonstrated their capability to implement the project related lands sales

successfully. Thus, MMDAs need to partner with the land developers to implement such

instrument through land banking projects. The assertion gives credence to the proposition that

partnership with land developers creates opportunities for the implementation of the

development-based instruments (Suzuki et al. 2015). The current operations of the parastatal land

developers are aimed at raising revenues for central government in the form of dividends because

they are subsidiary organizations operating under the state enterprise commission. They do not

operate as land developers that seek to promote MMDAs agenda to capture values by acting as

liaison between MMDA and customary landowners and creating land reserves for future project

related land sales as asserted by Paulais (2012).

The concept of land value capture in general is not clearly understood by MMDAs. There is a

dearth of knowledge among principal revenue mobilization staff of the MMDAs on the concepts,

applications, and revenue potentials of land value capture as complementary financing

mechanisms for urban infrastructure financing. Even at the national level, the supervisory

Ministry for MMDAs, the concept of land value capture is not understood and therefore, the

ministry is not able provide the necessary guidelines on most of the value capture instruments for

MMDAs.

There is the need for awareness creation on the concept of land value capture in GAMA. The

Ministry of Local Government and Rural Development and the Local Government Service

should engage the services of experts to create awareness and educate MMDAs revenue

mobilization staff and Municipal Chief Executives of the potential of value capture as a

complementary revenue tool for public infrastructure financing. The Ministry should collaborate

with international organizations and research institutions advocating for land value capture

financing to organize seminars, symposia and public fora for both MMDAs staff and tax payers.

In addition, there is the need for policy direction and incentives for the use of land value capture

tools. The Ministry of Local Government and Rural Development should provide policy

direction and guidelines on how to calculate and levy development charges and betterment levies

as it has done for property rates. The Ministry could also work with the District Assemblies

Common Fund (DACF) and District Development Facility (DDF) to include a criterion that

requires MMDAs to raise a certain percentage of revenue from land-based financing tools in

order to qualify for a certain quantum of additional transfers from these transfer grants. Already,

the DACF has guiding principles such as the needs, equalizing, responsiveness (rewarding

MMDAs that have done well in revenue collection) and service pressures factors for allocation

funds to MMDAs. The responsiveness factor could further be enhanced to include a certain

percentage of land value capture revenues.

The Ministry of Local Government and Rural Development should also advocate for a revision

of the provision on the tax base relating to property rating in the local governance Act, (Act 936)

to include land. In addition, the valuation method for rating should be revised to embrace

market-based approaches, especially in valuing properties within urban areas in the MMDAs.

This revision will ensure that the assessment of properties for rating purposes take into

consideration the factors that influence property value appreciation, such that, the periodic

assessment of these properties can provide the basis for assessing betterment. For example, the

law requires MMDAs to revalue their properties for rating purposes every five years. Therefore,

to be able to assess betterment, the first valuation could serve as baseline of property values and

the next revaluation could be the post valuation so that any property value difference between the

two valuation periods should be liable for some betterment levies.

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