  The provision of essential urban infrastructure and services for the
expanding population is a persistent financial challenge for many of the
rapidly expanding cities in developing nations like Ethiopia. The land lease
system has received little academic attention as a means of financing urban
infrastructure in developing countries. Therefore, the main objective of this
study is to assess the contribution of land leasing in financing urban
infrastructure and services using evidence from Bahir Dar city, Ethiopia.
Primary and secondary data-gathering techniques have been used. Descriptive
statistics and qualitative analysis have been adopted. The results show land
lease revenue is a dominant source of extra-budgetary revenue for Bahir Dar
city. As evidenced by Bahir Dar city, a significant portion of urban
infrastructure expenditure is financed by revenues from land leasing. However,
despite the critical importance of land lease revenue to investments in urban
infrastructure, there is inefficiency in the collection of potential lease
revenue due to weak information exchange, inadequate land provision for various
uses, lack of transparency in tender committees, and the existence of poor
documentation. Our findings suggest that Bahir Dar City needs to manage lease
revenue more effectively to increase investment in urban infrastructure while
giving due consideration to availing more land for leasing.
  Keywords: urban, land, revenue, inefficiency, lease, financing, Bahir Dar
City
