Notes on the Nature and Recognition of Customary Mortgages in Ghana and Africa

Introduction

Customary mortgages are a unique form of credit security rooted in the traditional and customary legal systems of African societies. These mortgages reflect the sociocultural and economic realities of the communities where they operate. In Ghana and many parts of Africa, customary mortgages coexist with statutory land laws, providing an alternative framework for securing loans using land or other assets. Their nature and recognition are shaped by community norms, oral traditions, and evolving statutory frameworks.

Nature of Customary Mortgages

1. Definition: A customary mortgage is an arrangement under customary law where the borrower pledges their land or another valuable asset to a lender as security for a loan or debt. The transaction is typically validated by community leaders or elders and may involve symbolic acts to signify the agreement.
2. Key Characteristics:
• Rooted in Customary Law: governed by unwritten norms and traditions specific to a community.
• Informality: often lacks formal documentation, relying instead on verbal agreements, symbols, or witnesses.
• Community Oversight: involves the participation of elders, chiefs, or family heads to ensure fairness and legitimacy.
• Temporary Transfer: The borrower’s rights to the land are transferred temporarily, with the expectation of reversion upon repayment.
• Flexibility: Terms are typically negotiable and can accommodate the borrower’s financial capacity and repayment timeline.
3. Cultural Practices: Customary mortgages often involve symbolic acts such as handing over soil, crops, or other items representing the pledged property. These acts vary across ethnic groups and regions but serve as evidence of the transaction.
4. Types of Assets Used:
• Land: The most common asset due to its economic and cultural importance.
• Livestock: In pastoral communities, livestock may serve as collateral.
• Other valuable items: jewelry, farm produce, or traditional regalia may also be used.
5. Purpose: Customary mortgages are used to secure loans for various purposes, such as agricultural inputs, family emergencies, education, or business ventures.

Recognition of Customary Mortgages

1. Legal Framework in Ghana: The 1992 Constitution of Ghana and the Land Act, 2020 (Act 1036) recognize customary law as part of the country’s legal framework. Customary mortgages are therefore legally acknowledged, provided they do not conflict with statutory laws.
• Customary Law and Land Administration: Customary land tenure systems govern about 80% of the land in Ghana. Customary mortgages fall under these systems, where chiefs, family heads, or stools (traditional authorities) act as custodians of communal land.
• Role of the Land Act, 2020: The Act aims to integrate customary practices into formal land administration. It emphasizes documentation and registration of customary land transactions to reduce disputes and enhance security.
2. Recognition Across Africa:
• Nigeria: Customary mortgages are recognized under traditional systems, with community leaders playing an essential role in validating transactions.
• Kenya: The Land Registration Act, 2012 acknowledges customary land rights and transactions, including mortgages, provided they align with statutory requirements.
• South Africa: The Recognition of Customary Marriages Act and other statutes underscore the integration of customary practices into formal legal systems, indirectly supporting customary mortgages.
3. Judicial Recognition: Courts in Ghana and other African countries often adjudicate disputes involving customary mortgages. Judges rely on customary law principles and community testimony to resolve such cases. The doctrine of equity also plays a role, ensuring fairness in enforcing customary mortgage agreements.
4. Challenges in Recognition:
• Documentation Issues: The lack of written records complicates enforcement and dispute resolution.
• Conflicts with Statutory Laws: Differences between customary and statutory frameworks may create ambiguities.
• Gender Disparities: Women often face barriers to land ownership and, consequently, accessing customary mortgages.
• Urbanization: Modernization and urban expansion threaten the relevance and application of customary practices.

Advantages of Customary Mortgages

1. Accessibility: Customary mortgages are more accessible to rural and low-income individuals who may lack access to formal financial institutions.
2. Cultural Relevance: These transactions align with local traditions, fostering trust and community involvement.
3. Flexibility: Borrowers and lenders can negotiate terms that suit their specific needs and circumstances.
4. Community Support: Involving community leaders enhances transparency and reduces the likelihood of disputes.

Challenges of Customary Mortgages

1. Enforceability: Disputes over verbal agreements or symbolic acts can be difficult to resolve, especially in formal courts.
2. Ambiguity in Ownership: Communal land ownership can lead to disputes over who has the right to pledge land.
3. Integration Issues: Efforts to document and formalize customary mortgages may erode their flexibility and cultural relevance.
4. Social Inequality: Marginalized groups, such as women and young people, may have limited access to land or decision-making processes in customary systems.

Modern Developments

1. Documentation and Registration: Governments in Ghana and other African countries are encouraging the documentation of customary land transactions to enhance security and reduce disputes.
2. Education and Awareness: Efforts to educate communities about their rights and responsibilities under customary and statutory laws are increasing.
3. Integration with Formal Systems: Policies and initiatives aim to harmonize customary practices with statutory frameworks to ensure consistency and equity in land administration.

Conclusion

Customary mortgages are an integral part of land tenure and credit systems in Ghana and Africa, reflecting the cultural and economic realities of local communities. While they offer accessibility, flexibility, and cultural relevance, challenges such as documentation, enforceability, and gender disparities must be addressed. The recognition and integration of customary mortgages into formal legal frameworks provide a pathway to enhancing their relevance and sustainability in the modern era.

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Emmanuel Amoabeng Gyebi

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