The Nigerian Finance Ministry has disclosed that fewer than 10 per cent of properties across the country possess valid land titles. This massive documentation gap prevents millions of Nigerians from leveraging their real estate holdings to generate economic value or access essential credit.
The deficiency creates a scenario where vast amounts of national wealth remain locked in undocumented assets. Without formal titles, such as a Certificate of Occupancy (C of O), property owners are effectively excluded from the formal financial system, as they cannot use their land as collateral for bank loans or business expansion capital.
The Finance Ministry revealed the scale of this documentation gap in a statement regarding the underutilisation of national assets, pointing out that the lack of formalisation stunts broader economic growth.
The impact on credit access and wealth creation
According to the Ministry, the current state of land ownership in Nigeria leads to a situation where citizens own assets but cannot capitalise on them. “Less than 10 percent of the properties nationwide have proper titles. So we invariably are creating a scenario where people own assets but are not able to use those assets for things that could deliver more value,” the Ministry stated.
This lack of title documentation has direct consequences for the small and medium-sized enterprise (SME) sector. Most small business owners in Nigeria rely on physical assets to secure the funding necessary for operations and scaling. When land cannot be legally verified or transferred easily due to missing titles, the real estate market becomes sluggish, and the banking sector faces increased risks associated with property-backed lending.
The issue is compounded by the complexities of the Land Use Act of 1978, which vests land ownership in state governments. The administrative processes required to perfect titles through state land registries are often characterised by high costs, lengthy delays, and bureaucratic bottlenecks. These hurdles discourage many property owners from completing the legal registration of their holdings.
Economists have frequently noted that formalising land titles is a prerequisite for increasing the country’s tax base and improving ease of doing business. When land is documented, it enters the formal economy, allowing for more transparent transactions and providing governments with a more reliable method of property-based taxation.
As the government seeks to improve the national credit rating and encourage domestic investment, the reform of land administration remains a critical requirement. Addressing the title deficit will require significant digitisation of state land registries and a streamlining of the perfection process to ensure that property owners can move their assets from the informal to the formal sector.
Explore more News stories from Business Elites Africa.
