The Land Use Act at 48: Why Property Rights Remain Uncertain in Nigeria – Fope Agbede

In March 1978, Nigeria’s military government enacted what would become one of the most controversial piece of legislation in the nation’s history. The Land Use Act, promulgated as Decree No. 6 of 1978, fundamentally transformed land ownership in Nigeria by vesting all land in each state in the Governor, who holds it in trust for the people. Forty-eight years later, as debates over constitutional amendment intensify, one question persists: has the Act achieved its stated objectives of simplifying land administration and ensuring equitable access to land, or has it created more problems than it solved?

Before 1978, land ownership in Nigeria was governed by a complex mixture of statutory law, received English law, and customary land tenure systems. In southern Nigeria, individuals and families could hold freehold title to land. In the north, the Land Tenure Law already vested land in the Governor, but customary rights remained strong in rural areas. This diversity created inconsistency, land speculation drove prices beyond the reach of ordinary Nigerians, and securing land for public infrastructure became increasingly difficult. The military government, citing these problems, enacted the Land Use Act with three stated objectives: to make land readily available for development, to ensure equitable distribution of land resources, and to simplify the chaotic land tenure system.

Section 1 of the Act achieved this through a dramatic legal innovation. It provides that all land in each state is vested in the Governor of that state, to be held in trust and administered for the use and common benefit of all Nigerians. Overnight, the Act abolished freehold land ownership in Nigeria. What citizens now hold are not ownership rights but “rights of occupancy”, essentially long-term leases from the state. The Supreme Court confirmed this revolutionary change in Nkwocha v. Governor of Anambra State (1984), holding that the Land Use Act extinguished all pre-existing freehold titles and replaced them with rights of occupancy. These rights come in two forms: statutory rights of occupancy granted by the Governor for urban land, typically for ninety-nine years, and customary rights of occupancy granted by Local Government authorities for rural land used primarily for agriculture.

The practical consequence of this vesting is captured in Section 22 of the Act, which provides that no holder of a statutory right of occupancy may alienate his right by assignment, mortgage, transfer of possession, sublease or otherwise without the consent of the Governor first obtained. Section 26 reinforces this requirement by declaring that any transaction purporting to transfer land without such consent is null and void. The Supreme Court’s decision in Savannah Bank v. Ajilo (1989) dramatically illustrated the severity of this provision.

The requirement of Governor’s consent has become one of the most contentious aspects of the Land Use Act. In practice, obtaining consent is a bureaucratic maze requiring multiple applications, payment of consent fees typically amounting to three to five percent of the property’s value, and waiting periods that can extend for months or even years. The Governor’s absolute discretion to grant or withhold consent, combined with delays in the consent process, has created what commentators describe as the greatest bottleneck to real estate transactions in Nigeria. In Yakubu v. Simon Obaje (2023), the Supreme Court attempted to ameliorate some of this harshness by holding that Governor’s consent is not required for transactions between private individuals where there is no overriding public interest or conflict. However, this decision has itself generated confusion, as it appears to contradict the express provisions of Sections 22 and 26 of the Act and the long-standing precedent in Savannah Bank v. Ajilo.

Even more troubling is the Government’s power of revocation. Section 28 of the Act empowers the Governor to revoke any right of occupancy for “overriding public interest.” This phrase, defined broadly in Section 51 to include purposes such as mining, oil pipelines, public roads, public buildings, townships, and numerous other categories, gives the state immense power to terminate property rights. The compensation regime under Section 29 compounds the problem. When the Government revokes a right of occupancy, the holder is entitled to compensation only for “unexhausted improvements”—that is, buildings, crops, or other developments on the land. No compensation is paid for the land itself, since under the legal fiction of the Act, the landowner never owned the land in the first place. This limitation was highlighted in Olateju v. Commissioner for Lands and Housing, Kwara State (2024), where the Supreme Court held that while prompt payment of compensation is mandatory for valid compulsory acquisition, that compensation is limited to improvements and does not extend to the bare land.

The practical effect has been devastating for property rights. Cases such as Goldmark (Nigeria) Ltd v. Ibafon Co. Ltd (2012) illustrate the tension between the Government’s power of eminent domain and citizens’ constitutional right to property under Section 44 of the 1999 Constitution. The Supreme Court in that case reaffirmed that the Government cannot validly acquire land without giving proper notice and paying prompt compensation, yet the compensation regime itself remains fundamentally inadequate. A family that has owned and cultivated land for generations receives compensation only for crops and structures, not for the land itself. This has bred resentment, particularly in communities where land holds not just economic but cultural and spiritual significance.

Forty-eight years after enactment, the Land Use Act remains entrenched in Section 315 of the 1999 Constitution, which gives it constitutional status. Any amendment to the Act requires not just a two-thirds majority in the National Assembly but also approval by at least two-thirds of state Houses of Assembly, a threshold that has proven insurmountable despite decades of complaints. In Ogunleye v. Oni (1990), Justice Belgore of the Supreme Court captured the frustration surrounding the Act, noting that it is neither the magic wand it was portrayed to be nor the destructive monster that critics feared. Rather, it is simply a law with significant flaws that persist because political will to reform it remains absent.

The consequences extend beyond legal technicalities. Foreign investors hesitate to invest in Nigerian real estate when property rights remain uncertain and can be revoked at the Governor’s discretion. This is now more evident as investors, including diasporans and foreign nationals, who acquired properties along the Lagos–Calabar Coastal Road have been left without adequate compensation following the government’s alteration of the original project alignment, which encroached upon largely undeveloped but high-value land. Banks struggle to accept land as collateral for lack of Governor’s consent. Young Nigerians seeking to purchase their first home face not just high prices but also the prospect of years-long battles to perfect their title. The World Bank’s Doing Business indicators consistently rank Nigeria 183rd on property registration, with a 29.5 score, citing fragmented registries, uncertain title, and the Land Use Act’s complications as major deterrents to investment.

As Nigeria approaches five decades under the Land Use Act, the fundamental question remains unanswered: can property rights ever be truly secure when they exist at the sufferance of the state? The Act was intended to democratize land ownership and make land available for development. Instead, it has concentrated enormous power in the hands of state Governors, created bureaucratic bottlenecks that benefit only the well-connected, and left ordinary Nigerians with rights of occupancy that can be revoked at will. Whether Nigeria’s constitutional amendment process will finally address these failings remains to be seen, but one thing is certain—the Land Use Act at forty-eight has outlived whatever justification it may once have.