Traditional land tenure and property ownership system has succeeded in making land owners in poor countries, including Nigeria, unaware of the need for, and opportunities in having enforceable property rights.
In reality, people in poor countries are not as poor as they seem because they have assets—lots of them. This was a startling observation made 20 years ago by a Peruvian economist. But, because these people who own assets cannot prove that they own them, they cannot use the assets as collateral.
Such assets, according to Andrew Nervin, Chief Economist at PwC, represent what he calls dead capital. Nervin estimates that Nigeria holds, at least, $300 billion or as much as $900 billion worth of dead capital in residential real estate and agricultural land alone.
According to him, approximately 95 percent of household dwellings in Nigeria have no title or a contestable title, noting that Nigeria is underperforming (economically) and unlocking dead capital is critical to stop that.
Earlier, Hernando de Soto, the Spanish explorer, had estimated that the total value of informally owned land, homes and other fixed assets was a whopping $9.3 trillion in 2000 (over $13.5trn in today’s money) which was more than 20 times the total of foreign direct investment into developing countries over the preceding decade.
All these help to underscore the amount of wealth which land owners in poor countries would have had at their disposal if they had clear, legal title to their property. They could borrow money more easily to buy better seeds or start a business.
But the publication of de Soto’s book, ‘The Mystery of Capital has made significant changes. Its ideas have spread and they hold lots of lessons which Indonesia, Thailand and Vietnam have bought into, making them pursue vast titling projects, mapping and registering millions of land parcels.
In his presentation at the unveiling of his company’s Mobile App for property search in Lagos recently, Jide Odusolu, CEO, Octo5 Holdings Limited, provided further insights into the scale of investments countries other than Nigeria are making in land titling, mapping and registration.
“India wants to use drones to map its villages. Ethiopia has registered millions of tracts. Rwanda has mapped and titled all its territory for $7 per parcel, thanks to cheap aerial photography. Studies suggest that titling has boosted agricultural productivity, especially in Asia and Latin America,” he said.
Challenges however exist, especially in Nigeria and Africa at large. Odusolu noted that, though the World Bank wants 70 percent of people to have secure property rights by 2030, that is unlikely to happen. He noted further that despite all the efforts, only 30 percent of the world’s people have formal titles today.
“In rural sub-Saharan Africa, a dismal 10 percent have formal title while just 22 percent of countries, including only 4 percent of African ones, have mapped and registered the private land in their capital cities,” he said.
He quoted United Nations as saying that as Covid-19 destroys jobs, there has been a global upsurge in evictions and home demolitions, adding that about one billion people, nearly one in five adults, according to another survey, fear they would be evicted within five years, often because they do not formally own the land under their homes.
He was of the view that property rights could not work unless the law applied to everyone. “Land is an emotive issue, especially where memories of colonial expropriation still linger. In parts of southern Africa, when a baby is born, its umbilical cord is buried in the ground,” which underscores the importance they attached to land.
He noted that the introduction of modern, legally enforceable property rights would always be politically fraught, advising however that reformers must keep up the long, hard slog of recording who owns what, cementing individual property rights in law and building the institutions to uphold them.
