With my background in lending and security at Stanbic Bank Ghana, I’ve handled numerous land-based collaterals under the Land Act, 2020 (Act 1036) and customary principles, which dominate 80% of Ghana’s land tenure. Customary law, a source of law (Topic 1), integrates with statutory frameworks for banking security, as seen in mortgage registrations during recapitalization efforts post-2017 cleanup.

Three kinds of land ownership under Ghanaian Customary Law:

1. Allodial Title (Absolute Ownership):
   • This is the paramount, unrestricted interest held by stools, skins, clans, or families as trustees for the community (e.g., Ashanti stool lands).
   • Characteristics: Perpetual, inheritable, and alienable with community consent; no superior interest exists.
   • Banking application: Banks prefer this for mortgages due to clear title, but require stool consent for validity under Act 1036. Example: In lending to agribusinesses in rural areas, Ecobank Ghana verifies allodial titles to avoid disputes, as in cases affected by the 2022 DDEP where land securities were revalued.
2. Usufructuary Interest (Customary Freehold):
   • A subordinate interest granted to community members or strangers for indefinite use, akin to possession with usage rights (e.g., farming rights).
   • Characteristics: Heritable and transferable but reverts to allodial holder if abandoned; holder can pledge or mortgage it.
   • Banking application: Common in rural collaterals; banks enforce via charges, but risks include family claims. Practical insight: During BoG’s sustainable banking push, this interest supports eco-friendly loans, but requires due diligence to prevent invalidation, as seen in post-UT Bank asset recoveries.
3. Leasehold or Tenancy Interests:
   • Temporary rights granted by allodial or usufructuary holders for a fixed period (e.g., abunu/abusa sharecropping tenancies).
   • Characteristics: Time-bound, non-perpetual; includes customary leases up to 99 years for non-Ghanaians per Constitution Article 266.
   • Banking application: Used for short-term securities; banks take equitable charges. Example: In urban developments, GCB Bank accepts leaseholds for property loans, but with BoG-mandated valuations to mitigate expiry risks, especially post-2023 inflation impacts on asset values.

These ownerships underscore the need for banks to register interests at the Lands Commission for enforceability, promoting compliance and reducing non-performing loans under BoG guidelines.