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Property Rights In Nigeria: An Untapped Tool For Economic Growth

“… Law, Liberty and Property are an inseparable Trinity.” – Friedrich Hayek.

There are three dimensions to property rights, they are: 1) legal and political environment, 2) physical property rights and, 3) intellectual property rights. The dimension which I will elaborate on and discussed in this article is the physical property rights.

Property rights here can be defined as the body of laws created by a country’s government to define how individuals can own, benefit from and alienate property. A property right is the definite and inalienable right to control the use of resources on a property. This right can be exercisable by either individuals in a state or the government of the state.

In addition to the right to use and control the use of the resources derivable from a property, the concept of property right also includes the right to delegate the right to use the resources, the right to sell, rent or otherwise alienate the property. Where there is the absence of private property rights, there is a general lack of interest in preserving the land, property or its resources. The individual sees no need to manage the land or crate value on it since he has no right to ownership on it. This apathy eventually leads to over-consumption of resources, waste, mismanagement and lack of development. Lack of property rights can also bring about destructive competition among individuals in the community for control of economic resources available on such properties.

In light of the foregoing, it becomes evident that private property rights and exclusive ownership by individuals rather than government is a desirable component in any country. There are several positive benefits derivable from private property rights. This view is backed up in the findings of the 2014 International Property Rights Index. According to the IPRI, countries with a high IPRI score are associated with high levels of household income per capita, receive more investment from foreign economic entities and have superior GDP growth rates compared to low IPRI scoring countries.

Sadly, African countries scored poorly on the International Property Rights Index with an average score of 4.8 out of 10. Though countries such as South Africa (6.7), Botswana (6.3) and Mauritius (6.3) performed reasonably well; of the ten bottom countries on the Index, seven were African. According to a World Bank Survey, if African countries can revolutionize the complex procedures surrounding land ownership and management in the continent, there will be a significant increase in the amount of food grown within the region and a transformation in development.

One of the greatest challenges of property rights in Sub-Saharan Africa is that most of the land has no registration of who owns it or has a right to use it.  According to the World Bank Report, it is estimated that as much as 90 percent of Africa’s rural land is undocumented.

In Nigeria, the stance on private property rights is quite obvious. It is firmly entrenched in the Section 1 of the Land Use Act (cap. L5 LFN 2004). This section vests ownership of all land situate in a state in the Governor of the state. All urban land is in the ownership, control and management of the Governor, while ownership, control and management of rural land is vested in the local government.

On the Global Property Guide Property Rights Index, Nigeria attained a score of 30 with 100 being the highest attainable score. This property rights index measures the degree to which a country’s laws protect private property rights, and the degree to which its government enforces those laws. Higher scores here mean that the property rights in such country are better protected.

The benefits which protection of property rights yields cannot be overemphasized. It brings about a complete overhaul of economic growth. In order to attain protection of private property rights, Nigeria must

  1. Call for a Law Reform to amend the first section of the Land Use Act which vests control and management of all land situate in a state, in the government of such state.
  2. Strive for better land registration policies and regulations. Land registration must be achievable with ease.
  3. Educate the rural populace on land tenure, land registration and private property rights.

If the foregoing is achieved, Nigeria will be sure to experience,

  1. Increase in economic growth and entrepreneurship; where proper land registration policies are put in place, individuals will have better access to title deeds which can be used as collateral to secure loans from banks and other financial institutions. Such loans can then be invested in business and entrepreneurship ventures.
  2. Increase in investor confidence and investment; where land use and tenure is secure, there will be an increase in foreign investment in the country by investors from within and outside Africa. This will arise as a result of the confidence investors will have to build and develop land, knowing fully that such land and tenure is secure.
  3. Healthy Competition and Proper Management of Available Resources; unlike the current clime of general apathy towards land preservation, land use reform will bring about healthy use of the land by individuals who know fully that they have a stake in the land and stand to benefit from it. This is contrary to the destructive competition for land and resources that happens when there are no specific owners.

The above is not in any way exhaustive. For Nigeria to attain a state where liberty and freedom is the order of the day, property rights cannot and should not be ignored. The words of Friedrich Hayek, seen above, ring true.

 “…Law, Liberty and Property are an inseparable trinity.”


Oyinkan is a Local Coordinator at ASFL. She is also the president, All Nations United Nations Students Association (ANUNSA) at the University of Ibadan, Nigeria where she is currently studying for a degree in Law. 

Republished form Africanliberty.org

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