Economics
  • ISSN: 2155-7950
  • Journal of Business and Economics

Formalising Property Rights in Informal Settlements and Its Implications

on Poverty Reduction: The Case of Dar es Salaam, Tanzania

 
 
Alphonce Gabriel Kyessi, Tumpale Sekiete
(Institute of Human Settlements Studies, Ardhi University, Dar es Salaam, Tanzania)
 
 
Abstract: Formalising property rights as a strategy is a call for a global reform aimed at overcoming poverty and underdevelopment. Its focus is formal recognition of “extralegal” properties. The poor of the world who are mostly living in informal or unplanned settlements hold assets worth trillions of dollars in the form of houses, buildings, land and small businesses. The problem is that their rights are not adequately documented and hence these assets cannot readily be turned into capital. It is believed that poverty can be reduced if assets owned by people living in these settlements are formalized and hence used as collateral for a loan. However, not much is known to generalise that formalizing property rights will automatically reduce poverty among the poor residents in informal settlements. In Dar es Salaam City, the largest and primary urban centre in Tanzania with more than 4 million people has approximately two thirds of its residents living in informal settlements. About 80% of the residential houses found in these settlements were until recently not formally registered. The properties in these areas are sound or improvable. This paper discusses the process of regularisation that includes formalisation of property rights, taking place in informal settlements in Dar es Salaam. The findings from recent research conducted in Dar es Salaam show that owners of the regularised properties are using the licenses or certificates to access credit for improving their houses or establishing small business. These emerging processes are indicators of poverty reduction. Although there are several challenges, the authors argue in the paper that the experiences in Dar es Salaam may assist in the scaling-up of the regularisation process of informal or unplanned or slum settlements in most urban centres in developing countries, including Tanzania, and thus achieving one of the Millennium Development Goals, Goal 7 Target 11.
 
 
Key words: regularisation; formalisation; land tenure; property rights; unplanned/informal settlements;
poverty reduction; Dar es Salaam
 
JEL codes: R210




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