The most consequential single effect of the Land Use Act 1978 has been to make Nigerian land, for most Nigerians, unmortgageable in practice. The instrument by which the Act killed mortgage lending is Section 22: no statutory right of occupancy may be mortgaged, transferred, assigned or sub-let without the prior written consent of the Governor. The Supreme Court applied the section to mortgages in *Savannah Bank v. Ajilo* [1989] 1 NWLR (Pt. 97) 305, holding that any mortgage executed without the prior governor's consent was null and void — voiding tens of billions of naira of bank mortgage portfolios overnight and requiring a federal circular from the Central Bank in 1990 instructing banks to re-execute every outstanding mortgage with retrospective consent.
## What the consent process looks like
A Nigerian seeking to mortgage a residential plot in Lagos in 2024 must:
- Obtain a Certificate of Occupancy from the Lagos State Lands Bureau — average time: 18 months; average cost in informal and formal payments: 5–8 per cent of the land's market value.
- Apply for Governor's Consent to the Mortgage at the same Bureau, paying 3 per cent of the property's value as consent fee, plus a 0.5 per cent capital gains tax, plus a 0.5 per cent stamp duty, plus a charting fee, plus a deed registration fee — collectively roughly 8–10 per cent of the property's value as transaction tax before any loan is disbursed.
- Wait 6–18 months for the consent letter.
- Re-execute the deed of mortgage on completion.
The 2023 World Bank *Doing Business in Nigeria* sub-national report ranked the cost of registering property at 11.1 per cent of the property's value — among the highest in the world, against an OECD average of 4.5 per cent. The time to register property in Lagos was reported as 107 days (against an OECD average of 23). In Kano the comparable figures were 22 days and 9.7 per cent; in Rivers, 84 days and 14.2 per cent.
The consequence is that the formal Nigerian mortgage market is approximately ₦300 billion in outstanding loans as at end-2023 (CBN data) — under 0.4 per cent of GDP. The comparable figure for South Africa is 31 per cent of GDP, for Morocco 18 per cent, for Kenya 2.5 per cent. The Federal Mortgage Bank of Nigeria holds approximately 80 per cent of the national portfolio; the residential mortgage banks supervised by the CBN hold the balance. Nigeria has roughly 30 million households; the formal mortgage market serves perhaps 40,000 of them at any time. The remaining 99.87 per cent of Nigerian households finance housing — when they finance it at all — from personal savings, family contributions, remittances from abroad, or *esusu* rotating-credit clubs.
## Why every state governor is the largest landowner in the state
Section 28 of the Land Use Act empowers the Governor to revoke any right of occupancy in his discretion for 'overriding public interest', with compensation limited to the value of unexhausted improvements. Section 5 empowers the Governor to *grant* statutory rights of occupancy in urban land. The combined effect is that the Governor is the sole grantor and the sole revoker of urban land title in the state.
The documented record across the Fourth Republic is that this power has been used not principally for public works but as a routine instrument of political patronage, revenue generation, and post-tenure self-provision. The Lagos State Government's own audited returns show that between 1999 and 2023, the State has issued, revoked, re-issued or regularised certificates of occupancy on roughly 3.2 million plots — generating over ₦400 billion in consent fees, capital gains taxes, stamp duties and regularisation charges. The Federal Capital Territory Administration has, since 1979, allocated approximately 180,000 plots in Abuja, with the principal beneficiaries documented in the 2008 Senate Public Hearing on FCT Land Allocations as overwhelmingly serving and retired military officers, politicians, judges, and senior civil servants. The 2007 *El-Rufai vs Atiku* exchange (in which the then FCT Minister revoked the Vice-President's Abuja allocations) was the most public iteration of a pattern that has been repeated in every state.
See *The Governor's Pen — Land Revocations Across Nigerian States* for the catalogue.
## What customary holders actually got
For the perhaps 70 per cent of Nigerian land that is non-urban, the Act provided for customary rights of occupancy granted by Local Government Councils. In practice, fewer than 10 per cent of customary holders have ever obtained a written customary right of occupancy from any local government. The land they occupy is held under the same customary tenure their families have held for generations — except that the legal radical title now lies with the state governor, not with the family. Where the governor designates the land as 'urban' (a power exercised liberally during the Lagos, Abuja, Port Harcourt and Kano expansions), the customary holders have, in case after case, been displaced with compensation paid for buildings and crops only. The Magodo–Shangisha case in Lagos, the Otodo Gbame evictions of 2017, the Mpape demolitions in Abuja, and the Bayelsa Yenagoa expansion of 2020 are catalogued examples.
The Act gave Nigerian governors a sovereign asset. It gave Nigerian families a presumption of tenure they cannot bank. The credit vacuum the Idigbe Panel was appointed to fill in 1977 is, in 2024, deeper than it was when the Panel was appointed.
Figure 1
Mortgage debt as a share of GDP, 2023: Nigeria vs comparators
Section 22 of the Land Use Act 1978 requires Governor's Consent for every mortgage. The result, four decades later: Nigerian mortgage debt is less than 1% of GDP — a hundredth of the developed-economy norm.
Figure 2
Median days to obtain Governor's Consent on a land assignment, 2023
The constitutional cost of s.22. Even Lagos — the best-resourced State Lands Registry — averages 180 days to consent a routine assignment; in most states the practical median exceeds six months.