The Nigerian real estate dream that could have been

 

On a road trip, when you drive past vast expanses of lands in the outskirts of Lagos, and even to other states in Nigeria, it adds up when you dwell on the statistics of Nigeria’s land mass, which is summed up to be a land area (sq. km) of 910770 sq. Km, according to the 2016 World Bank collection of development indicators, compiled from officially recognized sources.

 

That’s vast! Huge!!! Immense!!! Staggering, I hear you say. However, it’s abysmal when you hear about the fraction of land that’s currently in use to boost economic and residential or commercial activities, it leaves one in a state of despondency. It is estimated that only 5 percent of the country’s housing stock, which is about 13 million units, is in formal mortgage, meaning that 95 percent of these houses are dead assets. They are neither tradable nor bankable. These dead assets are cumulatively estimated at N307 billion or 81 percent of all goods and services produced in the country.

 

Not surprisingly, a World Bank Report on ‘How Africa Can Transform Land Tenure, Revolutionise Agriculture and End Poverty’ notes that sub-Saharan Africa is home to nearly half of the world’s usable, uncultivated land but, so far, Africa as a whole has not been able to develop these unused tracts to dramatically reduce poverty and boost growth, jobs, and shared prosperity.

 

Why is this the scenario, especially for Nigeria? How come about this status quo?

It’s a myriad of reasons actually. The rigidity of the feudal land systems when it comes to ownership and its onerous processes for one, stalls and barricades formal land ownership for many, thus hampering the promotion of commercial activities with the use of land for real estate transactions.

The failure of many attempts by administrations in the time past to carry out land reforms, making it an impasse situation is most worthy of mention. Even concerted efforts to audit and take stock of governments landed property and to free up a huge section for housing and other economic activities has met with a stalemate.

Communities bringing an end to land grabs and modernizing complex governance procedures governing land ownership has been pointed to as one of the factors that could bring about improved living and wellbeing standards of its people, according to the ‘Securing Africa’s Land for Shared Prosperity’ report by the World bank.

It’s interesting to note that Real estate, more than any other sector, will benefit from land reform. It is estimated that real estate makes up 60 percent of the world’s global assets and in developed countries, real estate buttresses the financial sector, enabling the creation of asset-backed loans and securities.

So how can these land reforms be brought to see the light of day? And why do we direly need these land reforms? Does government actually see the immediate need and urgency to implement these land reforms, and is this sense of urgency inherent in practical terms in their policies and procedures?

The Land Use Act of 1978 conferred on State Governors the custodian right to issue certificates of occupancy for land holders in their states. Seven of the more important provisions of this Decree are indicated below:

1. all land situated in the territory of each state in the country is vested in the Governor of the state. For southern Nigeria in particular, this means state appropriation of land from families and communities without any compensation except for economic crops and other betterment on the land.

2. all land control and management, including land allocation in urban areas come under the Governor of each state while land located in rural areas becomes the responsibility of the various local governments. Only the Governor can declare parts of the state territory governed by him as an urban area by an order published in the state gazette;

3. all land in urban areas is to be administered by a body known as the Land Use and Allocation Committee which has the responsibility of advising the Governor on the management of urban land; similarly, a Land Allocation Advisory Committee is provided to advise local governments in like manner;

4. all land which has already been developed remained the possession of the person in whom it was vested before the Act became effective;

5. the Governor is empowered to grant statutory certificate of occupancy (C of O) which would be for a definite term to any person for all purposes and rights of access to land under his control;

6. the maximum area of undeveloped land that any person could hold in any one urban area in a state is one half of a hectare; in the rural areas this must not exceed 500 hectares except with the permission of the governor;

7. the consent of the Governor must be secured for the transfer of a statutory right of occupancy through either mortgage or assignment. The consent of the Local government or that of the Governor in appropriate cases must also be obtained for the transfer of customary right of occupancy.

Now, herein lies the challenge: although the Land Use Act of 1978 was meant to usher in a new land reform in Nigeria, it soon became a clog in the wheel of development over the years. This was mostly because the Military Government which promulgated it also ensured it was entrenched in the Constitution of the country. Thus, any attempt to rectify its inadequacies required a constitutional amendment. Since and before 2009, there have been many protests both to have the Act expunged from the Constitution and to amend it in very many substantial ways.

Thus, although the Decree has made it easy for governments to acquire land for public purposes, drastically minimized the burden of land compensation and considerably reduced court litigations over land, it has, since its inception over two decades ago, created a new genre of serious problems for land management in the country. Somee of the key issues are:

i) The Decree, as it stands, represents an abrogation of the right of ownership of land hitherto enjoyed by Nigerians, at least in the southern half of the country, and its nationalization by government is inconsistent with democratic practices and the operations of a free market economic system;

ii) Many State Governments failed to establish the Land Use and Allocation Committee in their states for many years. This has hampered the steady and continuous delivery of land for building purposes;

iii) Many Governors do not give the urgent attention needed to their responsibility of granting consent for land assignments or mortgaging, thereby impeding the development of an efficient land market and housing finance institutions in the country;

iv) Equally serious is the attempt by some Governors to use the provision requiring their consent for assignments or mortgaging as a means of raising revenue for their States through imposing heavy charges for granting such consent, thereby again obstructing the development of an efficient land market and housing finance institutions in the country;

v) The inconveniences and delays in securing Statutory Certificates of Occupancy have induced many land transactions among Nigerians to move to the informal market or be falsely dated as having been concluded before March 28, 1978, the operative date for the Land Use Decree;

vi) The exclusion by the Decree of the rights of families or individuals to develop private lay‐outs has led to the emergence of a disjointed, uncoordinated and incoherent system of physical planning in Nigerian cities and a declining rate of housing provision in the country;

vii) The power of Governors and the Local Governments to revoke any right of occupancy over land “for overriding public interest” has been used arbitrarily in the past and helps to underscore the fragility of the rights conferred by the Certificate;

viii) In consequence of the above, there is increasing reluctance by both the Courts and the banks to accept the Statutory Certificate of Occupancy as a conclusive evidence of the title of the holder to the land nor as adequate security in an application for loan.

Onwards to 2009, President Yar’Adua inaugurated the nine-member Presidential Technical Committee on Land Reform. The committee’s terms of reference include, among others:
• To review pre-land Use Act and land tenure in existence in different parts of the country with a view to putting the land tenure system in Nigeria into a historical perspective.

• Collaboration with and provision of technical assistance to states and local government areas to undertake land cadastral nationwide.

• Determination of individuals’ “possessory” rights using best practices and most appropriate technology to determine the process of identification of locations and registration of title.

• Ensuring that land cadastral boundaries and title holdings are demarcated in such a way that community, hamlet, village, village areas, towns etc will be recognizable.

• To assist and encourage States and Local Governments to establish an arbitration mechanism for land ownership conflict resolutions.

• To establish a mechanism for land valuation in both urban and rural areas, in all parts of the Federation and to undertake any other activity that will ensure an effective, simplified, sustainable and successful land administration in Nigeria.

A major bottleneck in land administration reform in Nigeria and most developing countries is obtaining appropriate geoinformation – the technical cadastre – defining the possessory rights of all land owners. The country is poorly mapped; large areas of the country are currently unmapped at relevant scales, thus making geoinformation and cadastre major issues in the land reform agenda.

However, in a country like Nigeria the following factors have to be considered:

 The fact that the country is well endowed but poorly mapped;
 The need to create a topographical database which will be required to drive other
development projects in all sectors of the economy;
 The need to situate the cadastral survey within the context of the existing laws of the
country;
 The cost of improving initial approximate land cadastre;

A pressing reason as to why a there’s a need for reform is in the fact that land is a small, scarce resource, a miniscule percent of the earth’s surface. Going by this, the concept of land in its essence is unique and so processes and policies to maximise it should be strategic and effective. Its availability plays a pivotal role in the development of any economy as it increases investment inflow. industrialisation, housing development, agriculture, mining, oil exploration and other economic and productive activities that lead to improved standard of living, job creation, economic growth, among others, are possible only when land is available and harnessed for such purposes.

The Presidential Technical Committee on Land Reform has since been charged with, through a well-articulated “Terms of Reference”, the responsibility of drafting a road map for improving the institutional, legal and technical framework to transform the land tenure system to a dynamic land market economy. The Committee has longed called for memoranda from all stakeholders with a view to charting the optimal method for acquiring the national land cadastre; while the legal and institutional frame work are being worked on through moves to amend the Land Use Act of 1978. It is hoped that current attempt at empowering the masses of Nigerians who possess land but cannot convert it to capital will break the jinx of previous anti-poor land administration policies and finally move the nation to land market economy.

Many posit that there is a seeming reluctance of Governors to actively support the reform activities. Since the Governors have been made the custodian of the land of their states, no serious reform can take place without their consent and active support. This is why one of the strategies for overcoming this reluctance is to encourage that the very institution meant to promote land allocation in the states, that is, the Land Use and Allocation Committee is meant to become the arrow head of the land reform in the states.

Conclusively, there is no doubt that land reform for a country the size of Nigeria is bound to be a long and tortuous venture touching virtually all parts of the country. The land reform process is a firm, legal and sustainable implemented process that will ensure for its more secure and robust funding. It would also ensure that the land tenure laws, the operating regulations and procedures for land transactions are made uniform, open and ‘business friendly’ so as to facilitate and promote modern economic and developmental processes with minimum bureaucratic hindrance.
The security of tenure and property rights of citizens are an important foundation for economic development. And so, a national programme that sets out to enhance and secure the property rights of all groups in the society can only end up creating a “WIN‐WIN” situation in the country. Funding Land Reform programme should therefore be a national effort to be borne by all three tiers of government in proportion to their capabilities. If Nigeria is to meet the challenges of competing effectively in an increasingly globalizing world, it is thus imperative that it gives very urgent and sustained attention to promoting its land reform program in all of its ramifications.