However, the governors can revoke the right of occupancy for “overriding public interests”.
The Act confers the right of occupancy of all non-urban land to local government chairmen – who are always handpicked by state governors.
Land grabs
The law has become a sticking point for potential investors as some state governors have appropriated people’s land for themselves and even revoked companies’ right of occupancy without notice.
Some state governors ignore a section of the law which mandates compensation for individuals or organisations whose land is taken over by the state.
Worse still, hostile communities have pushed out several investors who acquired land lawfully from them and have taken over their assets.
President of the Allied Farmers Association of Nigeria, Austine Maduka, tells The Africa Report that he partnered with Chinese investors to acquire several hectares of land for cassava and rice plantations in Nasarawa and Ebonyi states. But they abandoned their assets for fear of being lynched.
“In Nasarawa State, near the Federal Capital Territory, we acquired over 20 hectares of land for rice production. We acquired the land through an agent, but this agent was arrested four times by the police. The owners wanted us to leave before the expiration of our lease because they felt we were making a lot of money,” says Maduka.
“In Ebonyi State, southeastern Nigeria, they chased us away. We abandoned the land, including bags of fertiliser which were worth millions of naira,” he adds.
One day, an Imo State governor revoked 15 hectares of our cassava plantation. He used part of it for himself.
Maduka explains that more than 20 members of his association – who are commercial farmers – have fallen victim to land grabbing and forceful land takeover by state governors or communities.
Francis Okeleke, a cassava investor and managing director of Kenfrancis Farms, says his land titles were suddenly revoked by a governor of Imo State in southeastern Nigeria without notice or compensation.
“I am not a politician, but I have a friend who is. One day, an Imo State governor revoked 15 hectares of our cassava plantation. He used part of it for himself. We pursued the case in court for four years before getting some compensation,” he tells The Africa Report.
Community friction
Community politics have also become a burden for investors.
BUA Sugar acquired 137 hectares of land for sugar plantations and a refinery at Lafiagi, Kwara State, north-central Nigeria, in 2008.
After the land acquisition, dissenting landowners who did not feel properly compensated – by the company or the government – took their case to court, which took eight years to be resolved.
The land was only handed over to the company in 2014.
“After the acquisition in 2008, there were court and community issues, which needed to be resolved,” Yikasu Samuel, then general manager of BUA Sugar’s Lafiagi plant, told The Africa Report after the handover.
Investors running scared
Lawyers and investment analysts are worried that the situation is stalling investments in Africa’s most populous nation.
“We are losing a lot of investment in Nigeria because we are unable to amend the Land Use Act to meet the current realities,” says Benedict Obhiosa, an international trade economist and executive secretary of the Manufacturers Association of Nigeria Export Group.
Nigeria’s real estate investments were reduced by 53% between 2014 and 2022, according to a Manufacturers Association of Nigeria (MAN) document seen by The Africa Report.
Manufacturing investments slumped from N691.77bn to N323.98bn over the period, with investors blaming the poor business environment and the “high cost of borrowing, high cost of energy and low consumption during the period.”
Foreign investment inflows have followed the same pattern. The World Bank says foreign direct investment into Nigeria fell from $5.97bn in 2010 to $2.45bn in 2021, representing a 59% decline.
Registering property, dealing with construction permits and enforcing contracts are three of the 12 pillars of the World Bank Doing Business Index, a programme which ended in 2020. Nigeria was among the lowest globally on registering property.
“The government can solve this problem by following up with investors or companies buying land from a community,” says Obhiosa.
“The state governors can help them with documentation and give them the required titles. Also, investors must ensure they properly settle [payment] or compensate individuals or communities who sell their ancestral land to them,” he adds.
Implement or amend?
Lawyers are divided on the Act. Samuel Oyigbo, a human rights activist and lawyer, says there is nothing wrong with the 45-year-old law but the issue lies with implementation.
“We do not need to over-legislate. If someone wants land for developmental purposes, the government can acquire it, develop and re-share it,” says Oyigbo.
“All the governor needs to do is to allow landowners to negotiate and settle with them and acquire the land,” he adds.
However, another lawyer and university lecturer, Odinaka Okeke, says the Land Use Act should be amended to remove immunity from governors on land issues.
“Once a governor appropriates land for themselves, the law must permit someone to bring them to book. Unfortunately, the current laws do not allow for that,” says Okeke.
“The law should set time limits for land cases. Currently, it takes years to recover your land in court, which is not healthy,” he adds.
Declining food security
Nigeria has 70.8m hectares of land for agricultural purposes, according to the Food and Agricultural Organization (FAO), but some of them have been diverted for residential and other uses.
The FAO says that agricultural production is declining in Nigeria, making food access difficult for the vulnerable population.
Farmers’ group head Maduka says that legislators must amend the 45-year-old law to enable those who wish to acquire land for investment to do so as quickly as possible.
“There must be a legislation or an amendment of the land act that will compel state governors to open up land for investment,” he says.
“The government also needs to invest in land clearing because many smallholder farmers cannot afford it. It costs millions or even billions of naira to clear land for food production,” he adds.
