CHUKA UROKO
In realization of its importance as a critical factor of production and further to underscore the pride of place it occupies in economic development, President Musa Yar’Adua’s administration included Land Reform in its 7-Point Agenda. Land in itself is a very important factor of production; it is the most unique and most strategic of these factors and in contrast with the other factors such as capital, labour and enterprise, land does not vary in size over a period of time yet it changes in value, often positively and sometimes in exponential proportions. For this reason, the availability of land has been identified to play a pivotal role in the development of any economy and the increase in investment inflow.
The reform is aimed at removing or, at best, minimizing all the hurdles that stand in the way of easy access to land especially for residential and commercial purposes.
One of the ways the president has chosen to address this reform is the proposed amendment to the Land Use Act which was promulgated as Land Use Decree in 1978 by the then military government under Olusegun Obasanjo.
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The main thrust of the proposed amendment is that the requirements for the governor’s consent in land transactions be restricted to assignments, thus making it easier to execute such transactions as mortgages, subleases and other land transfers.
The aim essentially, is to reduce the bureaucratic delays usually associated with long processes that characterize obtaining governor’s consent. Other aspects of the Act which the president wants amended are, perhaps, the ownership of land by state governors who now have the power to allot and revoke land at will, plus the legal provision that allows the use of land anywhere in the country as an instrument of commercial equity.
The president is not a man of many words and his slow approach to issues, no matter how urgent or compelling, makes matters worse. Over two years of coming into office, his administration has not shown Nigerians any green light that it is a new dawn for the real estate sector in the country courtesy of the Land Reform.
However, at an international housing workshop in Lagos recently, the Minister of State for Works, Housing and Urban Development, Grace Ekpiwhre disclosed that besides sending the bill for the amendment of the Land Use Act to the National Assembly, Federal Government has also been busy with other activities pursuant to the realization of the land reform agenda.
Ekpiwhre who was represented at the workshop by Magarette Okolo, a senior official of the ministry, disclosed that a committee had been set up on Land Reforms, adding that the committee has as its terms of reference, issues on national cadastral mapping, land titling, land registration, establishment of mechanism for land valuation, simplified, sustainable and successful land administration procedures, all of which, she noted, constitute major challenges facing the housing sector.
The computerization of federal land records under the Federal Land Information System (FELIS) which, as a programme, is an integrated digital Database Management System (DBMS) is also ongoing.
This system, Ekpiwhre explained, adopts Geographic Information System (GIS) for capturing, storing, analyzing, editing and displaying geographically referenced data which guarantees greater security of land titles and land-based transactions.
FELIS, according to her, is the forerunner of the National Land Depository, a system that would link land registries in all the states of the federation, thus making it possible for such records to be accessed from any part of the world.
These are wonderful activities by government but here is a country where officials of government mean what they do not say, or say what they do not mean. The contention here is that the delay and even the controversy at the National Assembly over the amendment of the Land Use Act is unnecessary and belies whatever good intentions the government has for land reforms.
The availability of land as a strong catalyst for the growth of any economy via housing development cannot be over-emphasised.
The Singapore and United Arab Emirate (UAE) examples may suffice here. UAE is today world tourism and investment destination and this is simply because of the changes it made in its land rules. In 2002, UAE liberalized its land rules, giving foreigners freedom to acquire land and develop on same. Today, the story is what we see as Masdar City in Abu Dhabi ; Burj Dubai and Burj Al-Arab, both in Dubai .
Part of Nigeria’s economic underdevelopment is traceable to the poor development of its housing sector which has all the potential of jumpstarting a sleeping economy like ours.
At the moment, the country has a housing deficit burden of 17 million units which requires about N35 trillion (about $27 billion) to fund. According to World Bank estimates, Nigeria needs to produce about 720,000 housing units annually for the next 20 years to be able to close the housing gap in the country. Available statistics reveals that since its inception in 1973 up to 2006, the Federal Housing Authority has built only 30,000 housing units and when we place this output side by side with 33 of the authority’s existence, the need makes the situation very critical.
Advanced economies of the world have used their real estate sector to grow their Gross Domestic Product (GDP) exponentially. For instance, the United States attained rapid socio-economic development through its proactive policy of aggressively pursuing home ownership for its citizens.
Frank Nweke Junior, the Director General of the Nigerian Economic Summit Group (NESG), in a paper he presented at a housing forum in Lagos recently, hinted that the US real estate industry is a major contributor to the national economy, providing millions of Americans with jobs (about 1.7 million paid employees in 2001) and generating hundreds of billions of dollars of economic output every year.
Nweke added that prior to the present sub-prime mortgage crisis, real estate in America was considered to be the most developed and highly efficient in the world, with the housing sector contributing about 14 percent to the nation’s total production.
According to him, in 2001, the stock of fixed residential assets was valued at nearly $10 trillion which is equivalent to one-year worth of US GDP, pointing out that beyond economic measures, homeownership and adequate rental housing also contributes to the welfare of the society.
Reading the president’s mind closely and dispassionately, it could be gleaned from his body language that he is not looking at the real estate sector in this direction, else, he should be seen to be pursuing this issue of land reform with all the urgency it deserves and requires. The bill ought to be given accelerated attention at the National Assembly and such that by now, we should be talking about its passage.
It does appear that the Yar’Adua administration is yet to see housing as a veritable source of continuous stream of income for government and its agencies; that income generated through taxation of the value of housing constructions and services can provide substantial revenues for government with which it can finance social welfare and economic development programmes and that construction of new homes expands its tax base and so increases property tax revenues.
Using Lagos State as a case study, Nweke pointed out that the housing sector can be a major catalyst for development if given the required focus and commitment which is where the Land Reform initiative becomes imperative.
Specifically, in the area of unemployment, the housing sector has the capacity to absorb the growing population of the unemployed youths in Lagos which is estimated at 26 percent by the Core Welfare Indicator survey of the state by the National Bureau of Statistics, he said.
According to him, more than 25 people are involved in the process of an average house in Nigeria including carpenters, bricklayers, masons, etc, noting that given the estimated housing deficit of, at least, a million housing units in the state, it is possible to provide employment for over 500,000 people through this sector.
There is no-gain-saying that as practicable and realistic as the above scenarios are, their full implementation depends almost entirely on the availability of land, hence the need for Yar’Adua and his co-travellers at the National Assembly to quicken the passage of the bill on Land Use Act while all the committees on land reforms should be concluding their assignments by now.
