This archive report was first published on 4 December 2019.
On December 4, 2019, the government of Kenya was grappling with a major issue in the land sector: fraud.
Land is one of the most valuable assets in Kenya, and its value has spawned a huge fraud industry that has policy-makers scratching their heads.
The sector's smooth running is crucial for social stability and security, and the government was under pressure to find a solution.
A case in point was a story carried by a local newspaper on its front page, involving NCBA's predecessor, CBA, Equity, and Co-operative banks, which were locked in a contest over a piece of land in Satellite, Nairobi.
The land was used as collateral to secure a loan of Sh490 million, but it was fraudulently used in the three banks.
After a lengthy court battle, the Court of Appeal ruled that Co-op Bank was the rightful owner of the title deed.
The high cost incurred by the parties and the economy in this and many other cases is a major concern.
The banks will bear the cost, but capital has been misallocated to the wrong 'borrower' to the detriment of the economy.
The land has probably not been used for the right economic purpose, and the fraud in the industry is a major put-off to both foreign and local investors.
This is a situation a developing economy should avoid at all costs.
The obvious solution to this is the digitization of the land registry.
While the Ministry of Land says digitization is complete in Nairobi, it has yet to go live, possibly due to concerns from lawyers that it will make their services redundant.
However, it is clear that only a digital register and the proposed collateral register will sort out land fraud.
