Ghana
Ghana to solve mystery of capital

afrol News, 7 October -Ghanaian President John Agyekum Kufuor and former US President Bill Clinton joined in at the recent launch in Accra of a foundation to help poor people register land and other property - the key to the "Mystery of Capital" according to the famous book by Peruvian Professor Hernando de Soto. Professor de Soto also joined in the launch.

Ghana's Ministry of Justice established the Foundation for Building the Capital of the Poor and is promoting reform of the country's property laws. Helping poor people register land and other property is supposed to gain them access to loans to improve livelihoods and promote development, according to de Soto's widely accepted theory. 

The foundation plans to set up a regional training centre in Accra to help other African countries learn about its property reform programme. A premise of Professor de Soto is that the poor often have considerable property but lack title to it and thus cannot use their resources to get ahead. Such reform is being tested in various countries under de Soto's guidance, with Ghana being the first in sub-Saharan Africa.

At the official launch, President Kufuor said that the foundation aims to bring all lands and business assets into the formal economic sector through proper registration, according to the UN development agency UNDP, which also has supported the initiative. 

- This should make land bankable property and give access to credit to title-holders, President Kufuor said. "This could prove to be the vital part of the missing link that might help generate the prosperity we all yearn for." Professor de Soto's ideas are consistent with Ghana's 1992 Constitution, which guarantees and respects the ownership of private property, the President further noted. 

Mr Clinton, the foundation's patron, said that "the simple power of Mr. de Soto's ideas" is that when people have a clear title to the assets of a business and the place where they live, it enables them to borrow money and to create their own banking system. 

- You create your own lending system based on the identifiable responsibility of people to repay the loan and their capacity to repay the loan because these are their business assets and this is where they live, the US ex-President was quoted by UNDP as saying.

Also the Peruvian professor spoke at the launch. The role of Ghana's political leaders and the government is important for the success of the initiative, Professor de Soto emphasized, and the government needed to "clearly communicate the scope of reform." 

Nana Akufo-Addo, Attorney General and Minister of Justice, pointed out that the country's economy has slipped since independence 40 years ago, with 40 per cent of the population below the poverty line. "We believe it is possible to create progress and prosperity in our part of the world so that in our generation, we can see the back of mass poverty in Ghana," he said. 

UNDP Resident Representative Alfred Sallia Fawundu further said that property rights are a governance issue. Having these rights can "transform the ordinary folk into a potentially active economic agent, indeed a wealth creator," he said. "We are talking about the direct link between governance and wealth creation and poverty eradication." 

Professor de Soto's property laws' reforms are currently being implemented in his native Peru, Haiti, the Philippines and Egypt. His book, 'The Mystery of Capital: Why capitalism thrives in the West and fails everywhere else,' has become a bestseller among international development agencies and scholars.

Sources: Based on UNDP, de Soto and afrol archives

 

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