Managing urban land markets in Africa: Valuation, performance and policy implication.

Land management system is an underlying factor for rapid urbanization. The urban land lease policy of Ethiopia is considered the most influential policy, where leasing is through auction or negotiation. This study examines its implementation using land auction data in Addis Ababa, one of the fastest growing city in Sub Saharan African Countries. The result suggests a high divergence between land-auction guide and sale prices. The study found that the urban land market is not just driven by economic rationale, it is also determined by non-economic factors. The findings imply that the land market is not only exposed to speculations but also its urban land acquisition is majorly a secondary market, with no policy-ground. • The paper critically reviews land lease policy and quantitatively analyzes the determinants of the auction premium for urban land in Addis Ababa, using auction data over the period 2013/14–2016/17. • Auction premium price is significantly explained by factors including plot-size, -use type, -grade types, down payment, location, and bid round. • Land value in urban Ethiopia is driven by a mix of economic and non-economic factors. Perhaps, the non – economic factors may be associated with the speculative nature of the land market, which makes the land price not to increase systematically, though it is surging. Accordingly, these features may trigger inefficiency in the land market, particularly in the implementation of the leasehold system in urban areas of the country, and thus, need to be corrected. [ABSTRACT FROM AUTHOR]