Uncovering ‘sleeping beauty’: Land readjustment for self-financing urbanisation in developing countries

Abstract

Land readjustment offers opportunities for addressing challenges related to rapid urbanisation but is rarely used in practice, especially in sub-Saharan Africa. This situation has led some researchers to refer to the untapped potential as “sleeping beauty”. Through a narrative review, this study analyses the self-financing potential of land readjustment and the implications for its application in sub-Saharan Africa. The results show that government budget allocations for covering upfront costs, acquiring a loan, and selling reserve land are the three financing mechanisms for land readjustment projects. The capability of land readjustment to finance its implementation relies, to a large extent, on the landowners' contributions of land for infrastructure development and the sale of reserve land. The extent of cost recovery depends much on the local land market and the period during which reserve land is retained before the sale. Moreover, land readjustment is usually self-financed to a limited extent, implying a need to establish supplementary funding before initiating the project. Nevertheless, land readjustment has the potential to overcome financial constraints to a large extent for infrastructure provision and address social inclusiveness in rapidly urbanising regions. These findings are essential for urban planners, property developers and policymakers in sub-Saharan Africa, where urban growth is fast and municipal authorities face constraints in financing infrastructure.