Anywhere in the world, land is a critical asset. It is about the most strategic factor of production such that, in terms of economic development, land is a vital asset that drives growth. Clear land tenure systems and robust management practices are necessary to attract investment, stimulate real estate markets, and foster economic prosperity.
Comparatively, some nations of the world have done better than others in land management and administration for the growth of their economy through real estate. Dubai, a United Arab Emirate (UAE) country, which has become global destination for real estate, is one of such countries.
Nigeria is not, hence the need for it to learn from Dubai’s success story on efficient land administration that led to the growth in its real estate industry which the whole world has seen.
From a desert country, Dubai transitioned into an attractive real estate destination following a simple land ownership policy the government of the country made two decades ago. “In 2002, Dubai introduced freehold ownership of land for foreigners. This is a law allowing foreign ownership of property in designated areas, thus attracting significant foreign investment in the real estate sector,” Abdulrahman Kadiri, a Dubai-based Nigerian realtor, explained to BusinessDay.
According to Kadiri, the country followed this up with other policies which made it all the more attractive for both foreign investors and property buyers to flock to the country, pointing out that laws and regulations were designed to attract foreign investment, protect investors’ rights, and ensure transparency in the market.
In Nigeria, apart from finance, which is not only scarce, but also costly in terms of interest rate on bank credit, land is a major limitation to the growth of the country’s real estate market as, according to Andrew Nervin, an economist, land tenure and property ownership system in Nigeria is the most rigid in Africa.
Nasir el-Rufai, former Kaduna State governor, affirmed this at a real estate event in Lagos, where he said that the major issues that continue to affect housing delivery in Nigeria, which also account for the demand-supply gap, included constraints related to high cost of securing and registering land.
In Nigeria, land is not only inaccessible, but also unaffordable as reflected in the country’s major cities, especially Lagos, where rising demand, emerging middle class, rapid urbanisation and the level of infrastructure have kept land prices high.
Ugochukwu Chime, chairman, Land Reform Task Team, noted at a recent real estate forum in Abuja that “efficient land management in Nigeria is of paramount importance due to a confluence of pressing factors that impact the nation’s sustainable development and overall stability. These factors, ranging from demographic changes to environmental challenges, necessitate a comprehensive approach to managing land resources effectively.”
Read also: Here’s how adverse macro-economy impacted real estate in H1 2024
Chime noted further that the current state land in the current does not support growth in the real estate and other economic activities. “The law governing land in Nigeria is the Land Use Act of 1978 which has not been amended since it was enacted first as Land Use Decree,” he said, adding that there are 38 land administering entities, including the 36 states, FCT and federal lands.
Each entity, he said, is empowered to determine the policies and practices for managing land and physical development which may be the reason less than 6 percent of the land resources are documented and registered with the various Deeds Registries.
Also, less than 10 percent of the land parcels are covered with effective and comparable cadastral origin and orientation while the country has over $300 billion in dead capital which is over 60 percent of the country’s Gross Domestic Product (GDP).
Chime lamented that various efforts to amend the LUA 1978 has failed due to fears and concerns about its impact on various interest, adding that many laudable programmes and projects in various sectors like agriculture and housing have been severely and adversely affected and/or thwarted by the very outdated, inefficient and opaque land administration in Nigeria.
“There are no established formal markets in Nigeria wherein land is traded both as an asset and a securitized commodity. The current land market lacks structure and is highly fragmented with various players trading outside government oversight and regulation which creates room for massive land disputes.
The GDP of the country and sub-nationals have been severely constrained and capped by the current land administration policies and practices,” the Task Team chairman said.
