Nigeria among laggards in World Bank’s ease of registering property ranking

Registering landed properties in Nigeria has continued to pose a major challenge to buyers, which explains why the country touted as the largest economy in Africa has been ranked 185th out of 189 economies in ease of registering property, by the World Bank Group.

Meanwhile,  Bukola Saraki, the   Senate President, says that the National Assembly is determined to pursue a holistic legislative project to reform the business environment for greater national productivity.

Saraki, at the presentation of the final report of the technical team on the review of the institutional regulatory, legislative and associated instruments affecting business in Nigeria recently said, “The Nigerian business environment is today running largely on obsolete laws, weak governance framework, fragmented regulatory structures bogged down by inhibiting practices with very weak accountability mechanisms.

“This state of affairs was further illustrated in the latest World Bank Doing Business Report. Of the 189 countries reviewed, the 2016 report places Nigeria on 169 in terms of ease of doing business, a key determinant of how a country is perceived in terms of attracting investment and supporting business development.   

“It is the need to methodically deal with this and create a new architecture for businesses to thrive in Nigeria that necessitated this project.   Assembly can pursue a holistic legislative project to reform the business environment for greater national productivity.”

However, the ranking which is contained in the Group’s recent report on Doing Business in Nigeria also ranked the country 129th out of 189 economies in ease of starting a business, lending support to an earlier ranking of the country 96 out of 97 – one above Sudan – in the Jones Lang Lassalle (JLL) 2012 global real estate transparency index.

These among other drawbacks to investing in property are the reasons Hakeem Oguniran, MD, UPDCPlc, says “the world’s largest and most established investors continue to steer clear of the country”, even though it has a property market that is seeing an increase in deals with high price tags from opportunistic funds willing to take a chance on its potential.

Nigeria has also been ranked 171, 62, 140 and 187 out of 189 economies in ease of dealing with construction permit, protecting minority investors, enforcing contracts and getting electricity respectively, making it the 170th economy out of 189 in the overall ranking indices.

The country lags behind Ghana, Thailand and New Zealand in ease of registering property, just as its mortgage sector has the least contribution to Gross Domestic Product (GDP) relative to other countries of the world.

Though there have been efforts by some state governments, especially Lagos, to review their procedures, traditionally, registering a property in Nigeria takes an average of 12 procedures, lasts nearly four months and costs over 10 percent of the property value, as against neighbouring Ghana, where it requires just five procedures, 34 days and 1.3 percent of the property value. 

“Nigeria is one of the world’s most difficult places to register property”, notes Olusola Olubode, former MD, Refuge Homes, unlike Thailand, where registering property requires just one step, less than a day and 1 percent of property value.

In Dubai, a global real estate market, in less than 72 hours- a buyer should have perfected his land titles and, according to Abudulrahman Kadiri, CEO, Arkgold Properties,“ you don’t even have to pay through your nose to get building approvals”.

Kadiri, a property vendor in Dubai, says that the unprecedented boom that was witnessed in that country’s property market was due to its relaxed land laws which gave foreigners 99 years leasehold and freehold on land, leading to the explosion in its property development.

Analysts say Nigeria’s real estate market has all the potential to equal any other in the world, and in the opinion of Oguniran, “in some ways, the country looks like a real estate investor’s dream but for its thorny legal issues, Land Use Act, complex, time consuming, laborious and unduly expensive registration process, and unnecessary penalties, such as increase in rates, fees, etc.”

Dapo Ojo of Estate Links Limited, reveals that in South Africa, depending on the size and value of the property, it takes between one and two months to perfect land title documents, explaining that it takes one day and zero percent cost to register a property valued at R0 – 600,000, and 3 percent for a property valued at R600,001 – R1.000,000.

In UK, he adds, it takes 1-2 months, six procedures and 4 percent of the value of the property to register a property, while it takes the same 1-2 months, six procedures and between $1,000 and $8,000 to do the same thing in USA.

Olubode pointed out that the impact of mortgage banking in Nigeria remains unfelt by the populace, as indicated by low percentage of mortgage contribution to the Gross Domestic Product (GDP) at 0.12 percent. “Just compare this to what obtains in other countries such as US, 63 percent; Britain, 64 percent; Germany, 55 percent; Thailand, 15 percent; South Africa, 20 percent; India, 5 percent and Ghana, 3 percent,” he said.

CHUKA UROKO