Globally, local governments are established and mandated to meet the needs of people at the grassroots by providing goods and services in a cost-effective manner. It is through local government structures that citizens can directly participate in the governance of their communities.
In Nigeria, local governments operate under a unified administrative system and are expected to have elected officials. Their roles and responsibilities, as defined by the Nigerian Constitution, include both legislative and administrative functions, such as policy formulation and budget preparation. Local governments also have a degree of control over their staff to ensure efficient service delivery. They are further tasked with maintaining law and order, providing basic amenities, and promoting socio-economic development. In some cases, they may also perform quasi-judicial functions.
The recent Supreme Court judgment granting autonomy to local governments implies that greater attention will now be focused on this third tier of government. This autonomy comes with increased responsibilities, and consequently, heightened expectations from the populace. Local governments will be required to operate with maximum efficiency to meet the growing demands of their residents.
This shift also underscores the need for greater revenue to enable local governments to meet their obligations—ranging from service delivery and infrastructure provision to community development. Unfortunately, challenges such as poor funding, paucity of funds, and the non-release of budgeted allocations have hampered the execution of critical projects at the local level.
One viable solution to this challenge lies in boosting internally generated revenue through property taxation—specifically, tenement rates. A tenement rate is a tax, fee, or levy imposed on occupiers of developed properties within a locality, under the jurisdiction of the local government or area council authority in the Federal Capital Territory (FCT), Abuja. Local governments or area councils have the constitutional authority to collect this tax.
According to Section 7 of the 1999 Constitution of the Federal Republic of Nigeria, local governments are mandated to participate in the economic planning and development of their areas. This section empowers them to conduct assessments of privately owned houses or tenements for the purpose of levying such rates as may be prescribed by the State House of Assembly (Fourth Schedule, Section 1(j)).
Property rating represents a significant and underutilised source of local government revenue in Nigeria. To harness its full potential, there must be a prompt, efficient, and effective system of assessment and collection. Tenement rates are to be paid annually, typically by the occupier of a property—whether an owner or a tenant.
In 2001, Lagos State introduced a modern approach to tenement rate administration through the Land Use Charge (LUC). Other states such as Kano, Ogun, Edo, Anambra, and Enugu have followed suit, adopting similar frameworks to improve revenue generation.
In today’s Nigeria, where hunger, unemployment, and poverty hinder rapid economic development and federal allocations are grossly inadequate, tenement rates can play a critical role in supporting local government income. These funds can drive infrastructure development, enhance service delivery, and foster economic growth. To ensure the successful implementation of property taxation, it is strongly recommended that professional Estate Surveyors and Valuers oversee the administration of tenement rates.
These professionals are uniquely qualified to conduct property enumeration, assessment, and valuation—essential steps for fair and accurate rate imposition. Furthermore, administrative staff within local governments should be trained in rating valuation principles, while the public should be educated on the importance and impact of paying tenement rates. Public awareness is key to compliance.
For optimal results, local governments must recognise Estate Surveyors and Valuers as strategic partners in economic development. These professionals possess the expertise to unlock land-based revenue sources, including tenement rates and ground rents. They are trained not only to carry out rating valuations but also to support the efficient collection of rates.
We can no longer afford to overlook the substantial revenue being lost due to inefficient property taxation systems. Leveraging tenement rates is essential for enhancing local government finances and, by extension, fostering broader economic growth and development. While federal and state governments play major roles, they cannot reach every corner of the country. It is the responsibility of empowered and financially autonomous local governments to fill this gap—primarily through effective tenement rate administration.
Olufowobi is an Estate Surveyor and Valuer based in Lagos.
