Twenty-first century Nigeria is yet to come to terms with the need for land reform for economic growth and shared prosperity. But the consequence of this sad situation is as grave as it is unimaginable in a country that prides itself as the largest economy in Africa.
The land tenure system in Nigeria is redolent of feudal times. It is rigid. Getting a certificate of ownership is onerous. Thus many are excluded from formal land ownership. This hampers full scale economic activities such as real estate in which land is a major part of the transaction.
Past attempts to reform land and property ownership have failed. Late President Musa Yar’Adua’s administration attempted land reform, but that ended in the middle of no-where.
The administration of Goodluck Jonathan also tried to carry out an audit and inventory of government’s landed property to free same for both housing and other economic activities, but that also failed.
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. Only land and property ownership reforms can unlock the values in these dead assets estimated at N307 billion or 81 percent of all goods and services produced in the country.
Raghuram Rajan and Luigi Zingales in their book, “Saving Capitalism from the Capitalists”, identify the respect for and guarantee of property rights, even of the “weakest and most defenceless citizen”, as the basic condition for competitive markets. They note that it’s a characteristic of transparent, responsive and accountable governments. Owners of the land are more engaged with it. Whether they farm, lease or develop it, they seek to generate the most out of it. In turn, they pay taxes to the government to protect and guarantee their rights.
Land accounts for 20 percent of the earth’s surface, and consequently, every economy, particularly Nigeria, requires comprehensive land regulations and policies or reforms to guarantee the effective usage of its land and the maximisation of resources attached to it.
From traditional, economic and industrial perspectives, land is very unique and strategic. 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.
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.
In another report, ‘Securing Africa’s Land for Shared Prosperity’, the World Bank argues that if African countries and their communities could effectively end land grabs and modernize the complex governance procedures that govern land ownership and management it would bring about improved wellbeing and standard of living of their people.
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.
Nigeria needs to reform its land laws. Urgently. It will remove all encumbrances that limit access to land and boost industrial activity, generate jobs, engender shared prosperity and alleviate poverty.
