Background

The land ownership system in Tanzania has gone through different phases. Prior to colonization landholding was based on customary laws of the different tribes, and so title to land was derived from traditions and customs of the respective tribes. Land ownership was communal, that is, owned by family, clan or tribe, and the chiefs had powers of land administration in trust for the community.

During the colonial time, both the German and British laws had impact on Tanzanian land laws. However, the notable one was the Land Ordinance Cap. 133 of 1923 passed under the British rule and which declared all lands, whether occupied or unoccupied, as public lands except for the title or interest to land which had been lawfully acquired before the commencement of the said Ordinance. All public lands and interests were vested under the control of the Governor to be held for the use and common benefits of the native population.

After independence, there was a series of laws in the 1960s all trying to set out a framework for a system of land and other resources governance under the authority of the state. This empowers the President to allocate and designate use of land in Tanzania.

Following the Tanzania National Land Policy in 1995, which set out the fundamental principles of land management, Tanzania enacted the Land Act No. 4 and the Village Land Act No.5 of 1999 which have since then undergone several amendments.

Land Ownership (for Tanzanian nationals)

All land in Tanzania is vested in the office of the President on behalf of all citizens. In Tanzania, land is divided into three categories which are general land, village land and reserved land. The Land Act provides for the General land and Reserved land. Under this Act, a person who wants to occupy land can apply and be issued the granted right of occupancy, subject to fulfilling the required conditions. The terms of right of occupancy are between 33 years and 99 years.  

Village land is governed under the Village Land Act and that Act recognizes the rights of villages to land held collectively by village residents under customary law. Village land can include communal land and land that has been individualized. Villages have rights to the land that their residents have traditionally used and that are considered within the ambit of village land under customary principles, including grazing land, fallow land and unoccupied land.

Land Ownership by foreigners

The Land Act is very clear that a non-Tanzanian is not allowed to own land, save for investment purposes under the Tanzania Investment Act. This includes corporate bodies which are registered in Tanzania and have a majority shareholding by foreigners, which are considered as foreign entities.

The Tanzania Investment Act establishes the Tanzania Investment Centre (TIC), an entity over which the land designated for investment is registered under its name. It has mandate to issue derivative rights to investors who meet the requirements provided under the law. Under the TIC, a foreigner can be allocated land designated for investment purposes and which is already listed, or can look for desirable land owned by a Tanzanian national, and after agreeing on the acquisition of such land with the owner, the owner will submit the existing title deed to the Ministry of Lands whereby it will be re-issued as a land designated for investment purposes under the name of TIC and thereafter derivative rights issued to the investor (foreign entity).

Foreigners have a wide range of options when choosing land, depending on their requirements, and are not limited to only acquiring land listed under TIC. However, when choosing land so listed, should the foreigner/investor fail to meet the conditions of investment agreed upon on granting of the said derivative right, TIC can re-acquire the said land and the foreigner is entitled to compensation on the developments made on such land.

Although this seems to be one of the best ways for investors to enjoy the use of land in Tanzania, it comes with certain challenges to the investors; for example most of the banks in Tanzania are not comfortable with taking derivative right titles as a security, mainly because their enforcement is associated with a number of challenges, the main one being the TIC right to re-acquire the property. However, there is also the fact that such land is already registered under TIC as land designated for investment purposes and therefore when a bank decides to sell it in order to recover they have a limited range of buyers.

Another challenge associated with derivate rights is the timing of issuance of the title, especially when an investor purchases a property from a Tanzania individual or registered entity.  Relevant approvals at the Municipal Ministry of Lands and TIC to the point of issuance of the title takes approximately a year or more, which is after the investor has made all necessary payments associated with acquisition of the said land. Whilst for land already registered under TIC, it can take just two to three months.  

Apart from derivative rights, there are other ways by which investors have been able to make use of land in Tanzania and that is through long leases and joint ventures.

Using a long lease, a foreign investor will enter into a lease with local land owners for the most part of the term of right of occupancy of that land, save for few days less that term of occupancy. It is worth noting that the granted right of occupancies have a term of up to 99 years with an option of renewal.

Using the joint venture route, a company joins ownership with a Tanzanian entity which owns 51% of the shareholding of the company, and hence, is allowed to enjoy use of land as a Tanzanian company. Such companies can enter into joint venture agreements and/or shareholders agreements which should provide for a structure of such company and the rights of the parties to it. 

Land disputes

When looking at the concept of land ownership in Tanzania, it is important to understand the court systems especially relevant to land matters in case a dispute arises. Under Tanzanian law, land matters fall under the District Land and Housing Tribunal (DLHT) which covers the district level, and matters involving amounts above one hundred million Tanzanian Shillings, or appeals from the DLHT, are referred to the High Court Lands Division.

Due to its pecuniary jurisdiction, most matters fall under the High Court Lands Division, which has a huge backlog of cases and the timing for a case to reach judgment ranges between 4 and 10 years. Although the High Court Lands Division is not so exceptional in terms of timing compared to other courts in Tanzania, the country has witnessed a high number of land disputes over the years.

One of the reasons for this state of affairs is that much of the land is not surveyed. Another reason is lack of awareness of the land regulations which means a large number of people do not have formal documentation in relation to ownership of land. These are just a few causes of land disputes in Tanzania. As in other countries, it is also highly advisable to do proper due diligence before buying land in Tanzania.  Situations such as a fake title deed, a fake owner, no consent of the spouse, and inherited land sold by some of the beneficiaries without proper estate administrators being appointed are some of the common problems. 

Jonathan Mugila