Sustainability of the LTR Program in Rwanda Daniel Ayalew Ali, Klaus Deininger, Marguerite Duponchel, Hoza Thierry Ngoga Annual World Bank Conference on Land and Poverty 25 March 2015

The LTR program in Rwanda Rwanda, with a support from DFID, successfully implemented a low cost, imagery-based land demarcation and certification program (since 2010) In about 3 years, 10.4 million parcels were demarcated 8 million certificates were issued, of which about 5.8 million were picked up Impact of LTR Improved perceived tenure security Improved women’s access to land and land rights Increased land rental market activities But, not clear impact on land-related investment due to short time span

But… challenges for the sustainability of the system Two main concerns: Completeness Disputes, payment of registration fees, difficulty identifying owners, etc. Registration of subsequent land transactions Sales (including prices), inheritance, mortgages, etc. Monitoring is thus critical Administrative and survey data are needed The panel data collected for the impact evaluation give highlights On coverage On rate of land transaction, and Level of informality

Completeness: demarcation and certification PercentNumber of Parcels Parcel demarcated at the time of registration Have the lease contract and land certificate Source: ongoing survey 2015

Share of rural households participating in land transactions over a period of 3 years 2011 (Before LTR)2015 Land sales market Purchased land21.0%14.7% Sold land8.8%16.4% Inheritance and gift Acquired through inheritance and gift14.6%12.5% Given out land in the form of inheritance and giftN/A14.0% Total Number of households

Sold parcels in Kigali (2013 registry – 6500 parcels )

Level of informality of transactions Transferred-inTransferred-out All Types of TransactionsN=674, Size=0.11 haN=635, Size=0.11 ha Completely informal36.1%64.3% Only informally registered with the village leader18.7%19.7% Officially registered at the DLO/Deputy registrar45.3%16.1% Through Land MarketN=307, Size=0.11 haN=319, Size=0.10 ha Completely informal31.6%62.1% Only informally registered with the village leader32.9%24.5% Officially registered at the DLO/Deputy registrar35.5%13.5% Through Inheritance and GiftN=275, Size=0.11 haN=316, Size=0.12 ha Completely informal33.8%66.5% Only informally registered with the village leader4.7%14.9% Officially registered at the DLO/Deputy registrar61.5%18.7%

Why transactions are not officially registered? Main reason for not registeringPercent Lack of information21.73 Not interested (why???)13.39 Too expensive17.56 Previous owner not cooperating2.68 Office is too far0.89 Dispute related0.6 Will do it later14.58 Other28.57

Determinants of transaction registration Transfer-in Purchased/sold parcel ** (-2.365) Government allocated parcel (0.559) Parcel size 0.040** (2.194) Has certified parcel 0.184*** (2.942) Distance to DLO in km 1.518*** (3.398) Distance to DLO squared in km *** (-3.206) Year acquired *** (-6.603) Value of household assets (-0.343) AGE, GENDER, HEAD’S EDCUATION INCLUDED, BUT NOT SIGNIFICANT Number of observations 597

Effect of distance to DLO

Potential obstacles to registering transactions Lack of information Accessibility Fees for transaction registration

Information campaign: Land week Recognizing high level of land transactions and the resulting informality, RNRA launched its first land week event in May 2014 Encourage landowners to register their land transactions Encourage landowners to collect their leases and certificates How was it done? Meetings with local leaders Public meetings at sector and cell levels Performance by local artists with land week messages Media (Radio, TV and new papers) were used to communicate land week messages Coverage 150 sectors from 25 districts were covered during the first land week event The second land week event is currently underway Recorded transactions increase from less than 10,000 to about 75,353 after the first land week event

Determinants of transaction registration Transfer-in Participated in land week meetings 0.150*** (3.192) Purchased/sold parcel ** (-2.551) Government allocated parcel (0.299) Parcel size 0.037** (2.006) Has certified parcel 0.193*** (3.094) Distance to DLO in km 1.396*** (3.199) Distance to DLO squared in km *** (-3.014) Year acquired *** (-6.756) Value of household assets (-0.266) AGE, GENDER, HEAD’S EDCUATION INCLUDED, BUT NOT SIGNIFICANT Number of observations 597

Accessibility: Process for transaction registration Applicant Compile documents for the transaction: (i) proof of ownership, transaction agreement, marriage certificate, proof of identity (ii) depending on type: extract cadastral plan, court decision, tax clearance certificate Submit application to the Deputy registrar through the district land office (DLO) District LO Verify authenticity and completeness of the documents and file them Book the request for transaction (LAIS) Accept the request for transaction Transaction proceed in the LAIS (transaction captured and changes are made) Deputy registrar Approve the transaction Sign and print the certificate (done automatically by the system) Seal the original certificate and stored at the office of the Deputy Registrar A duplicate certificate will then be sealed and forwarded to the DLO for issuing to the applicant

Improving accessibility: Sector land mangers notarizing land transactions N=30, Avg area=810 sq km N=416, Avg area=58 sq km (7%) ~70 in place, rest in the process

Fees for transaction registration (27,000 RwF) 20,000 RwF transaction fees 5,000 RwF for the new title 2,000 RwF for notary services Other costs? Cost of transportation to the DLO Covering costs incurred by witnesses, etc.

Transaction fee and property value in Kigali (2013) and rural areas (2011/12) Percentile of sale value of properties Transaction fee rate in percent Kigali (admin data)Rural Areas (survey data) Mean Note: Rural parcels with sale value of less 27,000 RwF are dropped from the analysis (76 out of 560 parcels).

Transaction fee rate based on rural households willingness to pay Percentile of sale value of properties Transaction fee rate in percent Kigali (admin data)Rural Areas (mean WTP=3582 RWF) Rural Areas (median WTP=1000 RWF) Mean

But,… a more in depth analysis is needed Required information: Number of parcels disaggregated by use and location (administrative data) Estimates on the incidence of market and non-market activities (survey and administrative data) Information on land prices (survey and administrative data)

Concluding remarks Subsequent transaction registration is key for the sustainability of the program Actions being taken by GoR so far: Information dissemination (land week campaign) Accessibility (hiring of sector land managers) Potential revision of transaction registration fees Given these measures, will the land administration system be financially sustainable? Cross-subsidization from urban to rural areas depends on the magnitude of transactions in urban areas Gradual scaling up of sector land managers is an option