Nigeria’s Property Registration Among Longest, Most Expensive Globally

Chuka Uroko

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espite recent improvements and innovations in terms of technology that have been introduced in land administration in some parts of Nigeria, the whole process is still lacking in speed, convenience and relative cheapness, compared to what obtains in other parts of the world, BusinessDay investigation has revealed.

The country lags behind Ghana, South Africa, Thailand and New Zealand among others, in ease of registering property, just as its mortgage sector has the least contribution to Gross Domestic Product (GDP) at less than 1 percent.

Registering a property in Nigeria takes an average of 12 procedures, lasts nearly four  months (except in some states like Lagos, Kano and Ogun, which have improved on this) and costs about 15 percent of the property value, as against neighbouring Ghana, where it requires just  five procedures, 34 days and 1.3 percent of the property value.

Olusola Olubode, former managing director of Refuge Homes Savings and Loans Limited (mortgage bankers) says that in New Zealand, a property could be registered online in two days, at a cost of 0.1 percent of the property value.

Quoting a World Bank report on Doing Business in Nigeria, which showed Nigeria as one of the world’s most difficult places to register property, Olubode hinted that in Thailand, registering property requires just one step, less than a day and 1 percent of property value.

Similarly, Abudulrahman Kadiri, CEO, Oak Properties, told our correspondent in Lagos that in Dubai, United Arab Emirate (UAE), in less than 72 hours a buyer should have perfected his land titles, adding that “you don’t even have to pay through your nose to get building approvals”.

Kadiri, a Dubai-based property vendor, explained that the unprecedented boom that was witnessed in that country’s property market was due to its relaxed land laws which in 1982, gave foreigners 99 years leasehold and freehold on land, leading to the explosion in property development.

Dapo Ojo of Estate Links Limited, cited South Africa, of which he said, depending on the size and value of the property, it takes between one and two months to perfect land title documents, explaining that it takes one day and zero percent cost to register a property valued at R0 – 600,000, and 3 percent for a property valued at R600,001 – R1.000,000.

In the UK, he said, it takes 1-2 months, six procedures and 4 percent of the value of the property to register a property, while it takes the same 1-2 months, six procedures and between $1,000–$8,000 to do the same thing in the USA.

Citing data from the Central Bank of Nigeria (CBN), Olubode said that the impact of mortgage banking in Nigeria remains unfelt by the populace, as indicated by the low percentage of mortgage loans to the Gross Domestic Product (GDP) at 0.12 percent.

“Just compare this to what obtains in other countries such as US, 63 percent; Britain, 64 percent; Germany, 55 percent;  Thailand, 15 percent; South Africa, 20 percent, India, 5 percent and Ghana, 3 percent”, he said.

Olubode however, pointed out that housing delivery in Nigeria is fraught with challenges including an unstructured and informal housing market, legal and regulatory issues, poor institutional framework and the need for relevant government interventions.

“The Nigerian housing finance market is largely characterised by difficulty in accessing land and title, due to shortcomings in the provisions of the Land Use Act of 1978 which requires mandatory Governor’s Consent”, he noted.

He added: “Inadequate skilled labour and high cost of building materials, inadequate or absence of clear property and security rights, land management system, lengthy, rigid and ineffective foreclosure procedures, unstructured and informal housing delivery system, lack of basic infrastructure and inadequate urban planning system, have all conspired to make the system highly dysfunctional”, he lamented.

Another challenge, he said, is the affordability gap, which he explained as the difference between the monthly mortgage repayments and maximum 30 percent that could be deducted from the total take home pay of a potential homeowner.

According to him, this is the most significant problem faced in delivering affordable housing to low and middle income families. He added that often, low and middle income groups are viewed by developers as having higher risk ratings, hence the higher pricing, which widens the affordability gap.

“The role of government therefore, is to emphasise creating an enabling environment that stimulates private sector participation in the long-term. These will include provision of physical infrastructure, enhancing the soundness and competitiveness of institutional frameworks, ensuring standard building codes and developing property rights”, he suggested.

Source: BusinessDay