Land and national development – Part 2
Some of the advantages that will arise from Land Use Act as economic development and wealth creation are as follows: It will enable Nigerians to use their land assets as collateral for credit and thereby facilitate their economic empowerment through the ability to create wealth with what they have (land). It will also enable them benefit from the immense latent potentials inherent in land bearing in mind that a plot of land can have different co-existing ownerships without necessarily hampering its use by a beneficial owner. The ultimate aim of any land reform process is to empower the people through making their landed properties more secure, easily identifiable and eventually more valuable and easily convertible. The vast majorities of our people do have land holdings but still remain in poverty due to the constraints highlighted above. When a plot of land is not registrable, it attracts low sale value, it is prone to all manner of ownership disputes and is not easily convertible to investible capital or usable as collateral for credit.
Facilitate the development of the mortgage sector and generally encourage the reliance on properties as security for credit. This will also enable Nigerians to benefit from the multiple advantages inherent in land ownership. It is vital to note that even as we grapple with our huge housing deficit, the development of a virile mortgage sector is essential to addressing the deficit. Over the years, governments at all levels have come up with various schemes to empower low income earners economically, alleviate the high poverty levels and facilitate wealth creation through schemes like Peoples Bank, NAPEP, NERFUND and similar intervention funds presently in existence. It is posited that for such schemes to work properly, there is a need for a form of security like land. A property owner who has a registered title can for instance, use his property as collateral to guarantee a facility albeit at government subsidised rate to purchase a bus for commercial transportation or use his property as guarantee to benefit from subsidised products from the government. In either case, because the person has a personal stake in the scheme, he or she will buy into it and will be more likely to make it work.
Generate substantial revenue for the State and Federal governments through property based taxation in form of ground rent, tenement rates, consent fees, stamp duties and other transaction costs. Property based taxation is a very stable source of revenue for governments. With proper titling, all land in any state will be ‘known’ to the state government thereby increasing substantially the states revenue base through a substantial increase in the number of taxable properties (since all the properties will be known to the government and will therefore fall within the taxable bracket). Interestingly, according to UN Habitat, property based taxation contribute 40 – 50% of local/municipal revenues in developed countries but accounts for only 3-4% of the said revenue in developing countries like Nigeria.
Create greater fluidity and confidence in our land market through the expected review of the land transaction process that will make it more business friendly. Ultimately, it will reduce or eliminate altogether the informal land market (presently as high as 60-80% of the market) and foster the growth of the formal one, which will bring all transactions in land under government regulation.
Reduce or eliminate communal or individual conflicts over land through proper delineation and land titling. It remains doubtful if any state knows for certain the exact extent and ownership structure of its land mass.
Enable the government to have a registry system that will overtime be a useful databank of property owners in each jurisdiction, which can also be used for crime control and fight against corruption amongst others. Interestingly the British government is in the process of making public its property registry information on foreigners as a way of fostering transparency and combating money laundering.
It is obvious that our present land policy and land administration procedure is far from ideal and has become a huge bottleneck hampering the development of our mortgage sector, wealth creation and our overall economic development. Besides, it is a known fact that the level of poverty in any country is directly related to the level of land rights available there. The institution of a good land policy that will confer title to land owners and enhance seamless transactions in land will therefore be a major tool for poverty alleviation.
In this regard, it is recommended that:
A holistic review of the Land Use Act be implemented but owing to the inherent difficulties associated with this (as it was made part of the constitution upon promulgation), the Ministry of Power, Works and Housing should in the interim fast track the drawing up and passage of Regulations by the National Council of State (as allowed by the Act), which will make the operations of the Act especially the consent provisions easier and more business friendly.
Pursue vigorously the land reform agenda being undertaken by the Presidential technical Committee on Land Reform with the ultimate aim of titling all lands in the country.
This reform agenda, when fully implemented, has the potential to facilitate wealth creation, empower Nigerians economically, generate huge stable revenue channel for the three tiers of government and lead to a greater all-inclusive and more accountable government. This is certainly an achievable goal and one that will change our country for the better.
• Eleh is a past president of the Nigerian Institution of Estate Surveyors and Valuers and a Senior Partner of Ubosieleh + Co.