Land use reform in Nigeria: Removing stifling bottlenecks
One, two, three, four, five, … 42, 43 and 44 long years later, the Land Use Decree of 1978, promulgated by the military regime of General Olusegun Obasanjo, now retired, remains the governing law on land use in Nigeria. These days, it has transmuted into the Land Use Act (LUA), encapsulated within the Laws of the Federation of Nigeria 2004. However, the change in the nomenclature does not in any way alter the substance of this most far-reaching enactment which splits informed opinions down the middle.
Advocates claim it is a revolutionary piece of legislation aimed at transforming the alienation, flexible deployment, ownership, transfer and use of land. Counter-balancing that, are the views of critics, ordinary people and scholars who contend that it is a moribund enactment, the implementation of which is riddled with corruption, suffocating bureaucracy, a veritable hindrance to economic development and one which, perversely, confers neo-demigod status on State Governors relative to the positive obligation to obtain their consent on virtually all matters pertaining to land use.
Whilst opinions will always differ on the point, this article’s focus is not to intermediate between the enduring contestability of views. Rather, it simply aims to advance the case for reform on the grounds of objectivity, economic necessity and effective democratic credence.
Some analysis of the enactment and relevant case law affords broader and deeper insights on the subject. Section 1 of the Land Use Act provides that “all land comprised in the territory of each state in the Federation is hereby vested in the Governor of that State, and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of this Act.”
Additional powers accruing to the Governor are enshrined in section 2 (1) (a) of the LUA in terms: “all land in urban areas shall be under the control and management of the Governor of each State” whilst section 2 (1) (b) stipulates all other land shall, subject to the Act, be under the control and management of the local government within the area of jurisdiction of which the land is situated.
The pseudo absolute powers of governors relative to land use and allocation are, yet again, crystallized by virtue of section 5 (1) (a) through (h), of the Land Use Act, which provide, inter alia, that; (1) It shall be lawful for the Governor in respect of land, whether or not in an urban area to (a) grant statutory rights of occupancy to any person for all purposes; (b) grant easements appurtenant to statutory rights of occupancy; (c) demand rental for any such land granted to any person; (d) revise the said rental (i) at such intervals as may be specified in the certificate of occupancy; or (ii) where no intervals are specified in the certificate of occupancy at any time during the term of the statutory right of occupancy; (e) impose a penal rent for a breach of any covenant in a certificate of occupancy requiring the holder to develop or effect improvements on the land, the subject of the certificate of occupancy, and to revise such penal rent; (f) impose a penal rent for a breach of any condition, express or implied, which precludes the holder of a statutory right of occupancy from alienating the right of occupancy or any part thereof by sale, mortgage, transfer of possession, sublease or bequest or otherwise howsoever without the prior consent of the Governor; (g) waive, wholly or partially, except as otherwise prescribed, all or any of the covenants or conditions to which a statutory right of occupancy is subject where, owing to special circumstances, compliance therewith would be impossible or great hardship would be imposed upon the holder; (h) extend except as otherwise prescribed, the time to the holder of a statutory right of occupancy for performing any of the conditions of the right of occupancy upon such terms and conditions as he may think fit.
Section 5(2) of the Act establishes that upon the grant of a statutory right of occupancy pursuant to the provisions of subsection (1) of this section, all existing rights to the use and occupation of the land, which is the subject of the statutory right of occupancy, shall be extinguished. As if those powers were not sufficient, section 22 of the LUA, prohibits the alienation of the statutory right of occupancy without the consent of the Governor. Section 22 (1) therein affirms that it shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained.
The second limb of the section 22 (1) establishes a statutory exception by providing that the consent of the Governor- (a) shall not be required to the creation of a legal mortgage over a statutory right of occupancy in favour of a person in whose favour an equitable mortgage over the right of occupancy has already been created with the consent of the Governor; (b) shall not be required to the reconveyance or release by a mortgagee (or lender) to a holder or occupier of a statutory right of occupancy which that holder or occupier has mortgaged to that mortgagee with the consent of the Governor; (c) to the renewal of a sub-lease shall not be presumed by reason only of his having consented to the grant of a sub-lease containing an option to renew the same.
Subsection (2) therein establishes that the Governor when giving his consent to an assignment, mortgage or sub-lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or sub-lease and the holder shall when so required deliver the said instrument to the Governor in order that the consent given by the Governor under subsection (1) of this section may be signified by endorsement thereon. Most disturbingly, section 47 (2) of the Land Use Act purports to oust the jurisdiction of Nigerian Courts regarding the amount and adequacy of any compensation paid or to be paid under the statute.
Attention now turns to arresting and pertinent jurisprudential concerns. Why would the Land Use Act, that is outwardly intended to benefit the Nigerian people and simplify land use, explicitly seek to oust the jurisdiction of the Courts pursuant to section 47 (2) therein? Lord Acton, the 19th Century English Roman Catholic historian, once remarked that “power corrupts and absolute power corrupts absolutely.” By granting absolute powers or near absolute powers to Governors, relative to land use, applying Lord Acton’s impeccable logic, isn’t the tendency to the corruptive influence therein enhanced rather than diminished?
The Act presupposes that the Governor is all knowing, all powerful, all caring and altruistic? But are they? Were they ever? In 1978, when the Land Use Decree was enacted by the military regime, there was evidently no democratic accountability nor oversight. How then, could it ever, truly be said that the Governors at the time were acting in the best interests of the people or that they were best placed to hold a constructive trust for the benefit of Nigerian citizens? Upon what reasoning? Afterall, nowadays, Governors purportedly elected by the people, are not always automatically sworn in except by the final pronouncement by the Supreme Court upon a rigorous examination of the evidence as the case of 2020 Hope Uzodimma vs Emeka Ihedioha case illustrated.
A seminal case to exemplify is that of Controller General of Prisons, Federal Ministry of Internal affairs and the AG Federation vs. Prince Elema & Another 12 NWLR 235. The issue for resolution was whether compulsory acquisition and compensation thereof was justiciable pursuant to the provisions of section 47 (2) Land Use Act? The Supreme Court held that it was justiciable relying, in part, upon the grundnorm contained in section 1 (3) of the Constitution of the Federal Republic of Nigeria 1999 (as amended), which provides thus: “If any law is inconsistent with the provisions of this Constitution, this Constitution shall prevail and that other law shall to the extent of its inconsistency be void”; as well as section 44 (1) the said Constitution which requires the prompt payment of compensation for compulsorily acquired property; respectively.
In that connection, the words of Ogunwumiju JSC strike reverberating chords in constitutional law and jurisprudential circles around the world viz: “The Land Use Act is an Act of the National Assembly embedded in the 1999 Constitution. The argument of the appellants that by S.47 (2) of the Land Use Act the trial court lacked jurisdiction to inquire into any question concerning the amount of compensation payable under the Act. The said section 47 (2) of the Land Use Act is in violent conflict with section 44 (1) of the 1999 Constitution, which proscribes expropriation of property with compensation…That argument by the appellant that the Court cannot inquire into the amount of compensation payable cannot therefore hold up. This is simply because the Constitution is supreme.”
The argument can certainly be made that Nigeria’s complex ethno-religious configuration, the need to evenly balance north-south tensions, a population exceeding 216 million informs the logic for the sustenance of the Land Use Act. That, however, is a limp argument. Because there is a compelling, continued and counter-balancing premise for reforming the Act on the following grounds:
First, because land is a key factor of production, it can, and should be, used more flexibly, more intelligently and more responsibly to raise capital for catalyse economic activities.
Second, there is no reason on earth why effective and robust digitisation should not play a more significant part in the process of land registration. Afterall, the HM Lands Registry in England safeguards land and property ownership valued at £8 trillion, enabling over £1 trillion worth of personal and commercial lending to be secured against property across England and Wales. The Land Register contains more than 26 million titles showing evidence of ownership for more than 88% of the land mass of England and Wales.
Third, digitisation will remove the obfuscation and choking layers of bureaucratic bottlenecks which fuels corruption and opacity within the process of obtaining Governor’s consent thereby freeing up human resources for more productive frontline activities in crime prevention and detection, healthcare transformation, enhanced educational outcomes, digital inclusion and infrastructure development.
Fourth, reform through automation, will enhance the efficiency and tracking of legitimate fiscal income due to the States using a “one-stop-shop” user interface model that is accessible to the State and taxpayers/land user. Fifth, juxtaposing intelligent reform, innovation and digital enhancement of land use, will further enhance each State’s capacity to maximise its unique internally generated revenue objectives thereby reducing the necessity to go cap in hand to the federal government for financial bail outs and handouts – which are not sustainable in the long term given the country’s disproportionately high debt burdens: N44.06 trillion as at q3 2022.
To conclude, the powers conferred upon the Governor regarding land use and consent – across the 36 States of the Federation and the Federal Capital Territory – are disproportionately high and ought to be streamlined. The economic logic therein is faultless too. Because if the land use regime in the richest G7 Countries (USA, UK, Canada, Japan, Italy, France and Germany) is adaptable, fit for purpose, commensurate with the evolving dynamics of demographic and socio-economic change, and used to catalyse growth and productivity why can’t Nigeria take a cue from that? For example, the onerous restrictions and stifling red-tape around private land ownership in Nigeria are absent in the USA where land assets are frequently utilised to access capital and catalyse growth.
Patently therefore, the recommendations are: (1) to reform a mechanistic land use model which is unfit for purpose; (2) to engage federal and state legislators, law reform commissioners, erudite scholars and practitioners traversing relevant professions; and (3) for political leaders to engage with, and prioritize this issue, within the first 100 days of being sworn in post the imminent 2023 elections. Action, not inaction, is what is required to unleash the potential of Nigeria’s landed assets to help catalyse economic growth.
Ojumu is Principal Partner at Balliol Myers LP, a firm of legal practitioners in Lagos, Nigeria.