• Experts seek new land reform policy, abrogation of land use Act
Housing experts have advocated the institution of land policy that will confer title to landowners and enhance seamless transactions for poverty alleviation.
They said the present land policy and administration procedure has become a huge bottleneck, hampering the development of the mortgage sector, wealth creation and overall economic development.
Nigeria is reported to hold close to $1 trillion worth of dead capital in residential real estate that should have been used as catalysts for the rapid economic development of the country and reduction of abject poverty among Nigerians.
PwC 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. The high-value real estate market segment holds between $230 billion and $750 billion of value, while the middle market carries between $60 billion and $170 billion in value.
The reasons for this include non-titling of real estate assets, lack of real estate titles and the inability of owners using titles to raise bank loans for other investment opportunities.
The experts traced the growing dead capital in the real estate sector to the tedious process of obtaining a Certificate of Occupancy. “Regrettably, despite the fact that land title registration started in Nigeria as far back as 1863, available data indicate that only about three per cent of the land in Nigeria is registered.
“This means that most of our land area (97per cent) are still not easily convertible to capital and constitute what land economists regard as dead capital,” according to a past president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Emeka Eleh.
He said: “It is sad that under our present land policy, an individual or family with a plot or an acre of land cannot use the land as security for a loan to invest in a business. Our vast land resources remain dormant or dead capital due to lack of title, while the landowners remain in poverty due to lack of ability to create wealth with what they already have.”
NIESV President, Mr. Emmanuel Wike, said that unregistered land in the country had made it impossible to create wealth, noting that real estate is one of the vital sectors that can revamp the economy.
“We have been advocating abrogation of the Land Use Act (LUA) because we have been told that over 90 per cent of land in Nigeria is not registered. That is an untapped potential because what it means is that you cannot use any land that is not registered for financial transactions,” he stated.
Eleh suggested a holistic reform of the land tenure system. “This process will go a long way not only in resolving the impediments created by the operation of the Land Use Act but will also foster economic development and wealth creation,” he said.
He said the reforms will also facilitate the development of the mortgage sector and generally encourage the reliance on properties as security for credit; 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.
It will also create greater fluidity and confidence in our land market and reduce or eliminate communal or individual conflicts overland through proper delineation and land titling.
The Managing Director, NISH Affordable Housing Limited, Dr. Yemi Adelakun, said if this dead capital could be unlocked and invested appropriately, Nigeria stands to leapfrog its economic growth, rapidly develop its infrastructure and improve the quality of life of its citizens.
“More importantly, the real estate sector will experience phenomenal and geometric growth such that the intractable housing deficit may become a thing of the past.”
He said the federal and state governments as a matter of urgency need to simplify processes and accelerate the issuance of title documents as well as implement an electronic title registry for storage, retrieval of such titles for continuous update and easy verification.
Adelakun said governments should promote mortgage financing through special and revolving funding and provide a legal framework that will enhance mortgage transactions and commoditisation of real estate in the country.