The role small and medium enterprises play in the process of economic development is now widely acknowledged.
Although this sector employs the great majority of the labour force, it is only recently that policy interventions have been initiated towards developing the sector through programmes such as micro- and small-scale enterprise development. ‘Informal’ businesses are defined as illegal, unlicensed businesses which do not keep books of account and ‘small-scale’ as businesses and cooperatives with fewer than ten employees. It reflects on the performance of informal small-scale businesses in urban Ethiopia based on productivity levels and employment creation. Part I of the book deals with the informal urban economy. The information clearly elucidates ‘how to’ and ‘why to’ incorporate informality as a rational strategy of local and national governments in a situation where they cannot create enough employment, nor provide the necessary services. The book commences with an introduction, which contains the history of the informal sector and the conceptualization by sketching a number of theoretical developments. Through an analysis of existing property tax and land leasing systems in Kigali and Addis Ababa, as well as failed, stalled and ongoing reform attempts in each, the paper identifies key themes for the study of property taxation systems and their potential to succeed in rapidly transforming cities in the global South. Moves to introduce or improve property taxation need also to be considered in relation to how contemporary development strategies constrain or facilitate investment in real estate, and the political economy underpinning this sector. This paper argues that, in addition to the usual technical and political difficulties associated with property taxation, it is crucial in reform-oriented developing countries to understand the nature of land tenure systems and how they are changing, as well as historical legacies relating to land and housing. Despite this, even in states considered particularly ‘developmental’ and committed to increasing tax revenue, property taxation has fallen by the wayside. In this context, improving systems for property taxation is an urgent and growing need – something that national and international policymakers increasingly recognise. This manifests in rapidly transforming landscapes and the proliferation of valuable property in the continent’s booming large cities, often accompanied by growing socio-economic inequality. Much contemporary economic growth in Africa is driven by urban service sectors including construction and real estate. Furthermore, in an economic sense, it is crucial to examine the urban land value determinants from both demand and supply side at a time when less attention has been paid thereto in the literature. Originality/Value: Several studies that have assessed urban land expansion and administration, however, paid less attention to the urban land lease market.
Moreover, the municipal government should ensure equitable access to urban land by controlling land speculation. Hence, the municipality should enhance infrastructure development across all plot locations and exercise strict control of land speculation to increase municipal revenue, and address supply and demand-driven challenges. Practical Implication: The rapid urbanization in Ethiopia has generated intensified supply and demand-driven challenges for public policy. On the other hand, distance, and plot inaccessible to basic services associated negatively and significantly with the urban land lease markup price. Auctioneers paid a premium for plots having a larger size, extended payment period, access to basic services, and specified for residential housing. The findings revealed that plot size, payment period, monthly income, plots accessible to basic services, plot location, land use type, and land lease auctioned period associated positively and significantly with the urban land lease markup price. Findings: The study found both supply and demand-driven factors associated with plot markup price. The model produced robust relationships and consistent results with previous studies. The data was analyzed using the pooled ordinary least square technique. The data was gathered from the Mekelle municipality between 2014-2019. Design/Methodology/Approach: A nomothetic methodology with a standardized and quantitative method of data analysis was adopted for this study. Purpose: The ultimate objective of the study is to examine the determinants of the urban land lease market in an emerging economy with empirical evidence from Ethiopia.
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