Releasing land titles could bolster Papua New Guinea SMEs

Granting more land titles over plantation smallholdings and National Housing Corporation housing stock, and freeing up land locked up in over 20,000 unresolved deceased estates could provide a real boost to Papua New Guinea’s small and medium enterprise (SME) sector.  Dr Charles Yala, Principal & Director of Niugini Land and Properties, is calling for the more effective transfer of outstanding titles.

Dr Charles Yala

Speaking in Brisbane, Yala put forward three case studies where improved transfer of land titles could have a significant effect on PNG’s economy: in the  palm oil and housing sectors, and also with deceased estates. The first area considered was New Britain Palm Oil’s (NBPOL’s) smallholder oil palm project.

He said NBPOL’s oil palm projects are divided into: estates, which are government-owned plantations with Agricultural leases; mini-estates, which are plantations on customary land; and small holders, which are plantations with state leases, called Lease State Settlements (LSS).

State leases are typically for 99-years. Yala said that there are 2,403 of them. Of these, 56.4 per cent are without a title.

‘It is a very vibrant small business sector which is actually suffering from this title transmission issue.’

Yala argued that if small holder operators are granted a title, they can create assets to be used as collateral (for raising capital).

‘Let’s get these titles (to these small holders) who are struggling without titles—it is affecting production,’ he said.

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Houses

Yala, a former Director of PNG’s National Research Institute, next looked at National Housing Corporation (NHC) houses.

He said government housing stock was ‘largely inherited’ from the departing colonial government in 1975 ‘and disbursed through various home ownership schemes’.

‘Those [houses] disbursed under the various schemes fall into two major groups: where titles have been granted to the recipient and where titles have not been granted.

‘Where you find houses in poor state of repair … the lack of title is the major reason.’

‘Where you find houses in poor state of repair, such as Boroko East in Port Moresby, Ela Beach, Konedobu, Korobosea, Tokarara, Hohola, Waigani and other towns the lack of title is the major reason,’ he said.

Yala acknowledged it is difficult to quantify the number of NHC houses in which the occupants have not been granted the title, but he estimated that as many as 7716 houses have titles that are not transferred.

Transferring land titles could stimulate more building construction.

Yala noted that the standard NHC block in Boroka is between 1200 and 1500 square metres.

‘The potential for redevelopment on this land is huge.

‘A typical redevelopment project for such a block into six units with common recreational facilities is possible.

‘It would yield the owner significant returns, create a boom in the construction sector, increase the supply of housing stock, improve affordability, boost the economy, and provide a better return on infrastructure for municipal authorities through land tax and utilities’ charges.’

‘Many of the assets remain idle or are lost. These are potential SMEs.’

Yala advocated facilitating the transfer of land titles to those who have not been granted them.

Deceased estates

Yala’s third area was deceased estates. He said 19,600 estates in PNG remain unresolved after 15 years.

In addition, 680 properties remain under trust because there has been no resolution of the estates, and more than 700 properties ‘have not been accounted for’.

‘Improving the Will administration system is critical for ensuring that the SME sector grows—and important assets like houses, land and farms are protected.

‘Will-making is culturally sensitive in PNG, but we need to encourage it as part of SME sector development.

‘Many of the assets remain idle or are lost. These are potential SMEs.’

Land with titles only represents a small portion of the total land, however. Yala noted that 97 per cent of the land in PNG is still customary owned.

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