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Legal Focus

OCTOBER 2013

Purchasing Commercial Land -

In light of ArcelorMittal exiting a steel mill project in India, pointing to delays in getting land and mining permits that have made the project unviable, we speak to Dr. Abdul Baasit Aziz Bamba, lawyer at Ayine & Felli and lecturer at the Faculty of Law at the University of Ghana, about the issues that can arise when purchasing commercial land.

What are the legal obstacles facing companies purchasing land?

Over 70% of land in Ghana is owned by stools/skins and families although individuals and the state also own lands. There are varying interests in law comprising a mishmash of common law interests such as freeholds, leaseholds and licenses, and customary law interests such as allodial titles, customary freeholds and customary tenancies. The 1992 Constitution of Ghana, other statutes, the doctrines of common law and equity, and local customary law constitute the legal regime for the acquisition of land in Ghana. This legal regime provides clear rules on how lands can be purchased in Ghana, by whom and the interest to be granted. However, there are numerous obstacles facing companies purchasing land in Ghana.

First, because different legal rules govern the capacity of holders of particular and specific interests in land to validly transfer interests in land , the legal regime for the acquisition of land appears somehow complicated. The result of this is that that the unwary and unguided land purchaser may burn its fingers in the attempt to navigate the complex labyrinth of the processes of land acquisition in Ghana.

Secondly, in land purchases the legal regime permits unequal treatment of

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Ghanaians and non-Ghanaians with the former receiving preferable treatment. In this respect, Article 266 of the Ghanaian Constitution states that no interest in, or right over, any land in Ghana shall be created which vests in a person who is not a citizen of Ghana a freehold interest in any land in Ghana or a leasehold for a term of more than fifty years at any one time. That being so, any agreement, deed or conveyance of whatever nature, which seeks, to confer on a person who is not a citizen of Ghana any freehold interest in, or rights over, any land is void. Article 266 further provides in clauses (3) and (5) that non-Ghanaians with freeholds or leaseholds with an unexpired period of more than fifty years as of 22 August 1969 would have those interests converted to leasehold of 50 years from 22 August 1969. Pursuant to these constitutional provisions, non-Ghanaians or

foreign incorporated companies

cannot legally acquire freehold interests or leaseholds with a duration exceeding 50 years at one time in any lands in Ghana.

Another legal challenge faced by

companies in purchasing lands in Ghana relates to the complicated ownership structure of lands in Ghana. As already indicated, a large chunk of the lands in Ghana is owned by stools/skins and families. Although there are relatively