MARCH 2011 Public Disclosure Authorized Pilot Land Reforms in Nigeria: Think Big, Start ABOUT THE AUTHORS Small, Move Fast! …but Where Do We Start? NOUMA DIONE-MBAYE an Operations Analyst for Access to Finance Advisory When it comes to strategy, the Chinese have a saying: “Think big, start small, Services, previously worked for but move fast.” This has been our guiding philosophy for the pilot land the Investment Climate Advisory Service, focusing on reforms of the World Bank-DFID1 Subnational Investment Climate Program issues affecting land markets. She served as the Nigeria (ICP) in Nigeria. The challenge was to find a “small” reform entry point from Subnational land team leader which to “move fast” on this sensitive and difficult topic, which is more for the Nigeria Subnational ICP project. Nouma has worked in complicated than it might appear. After some research, the ICP team found many Sub-Saharan Africa countries, in particular that the most effective and efficient entry point was the mapping and postconflict countries, streamlining of land procedures. Over the last four years, the team worked specifically on business entry issues. on implementing this approach in four Nigerian states (Cross River, Kaduna, Public Disclosure Authorized CATHERINE MASINDE Kano, and Lagos). This SmartLesson shares some of our experiences in an Program Manager and Task finding practical solutions for the successful implementation of streamlining Team Leader of the ICP pilot, also manages the Sudan activities at the subnational level. National Investment Climate Program and the Southern Sudan Subregional Investment Climate Program. Catherine has Box 1: The Challenge of Land Reform worked in Africa, Washington (global mandate), and Europe Land reform is a sensitive topic—especially in the developing world, where customary land tenure overlaps and Central Asia on similar with statutory land tenure, and barriers to land titling prevent large sections of the population from benefiting programs. Prior to joining IFC, from full ownership rights. she was a Senior Private Sector In urban areas, where demand for land is increasing, the prohibitive cost of property registration has created Development Advisor with DFID for 10 years. dysfunctional land markets dominated by informal transactions. The result is a growing number of large illegal settlements— “ticking time bombs” from the legal and urban-planning points of view. And policymakers seldom choose to fully address them. Public Disclosure Authorized APPROVING MANAGER David Bridgman, Regional Dysfunctional land markets affect not only investment flows but also access to finance and to affordable Manager, Investment Climate housing for the most vulnerable populations. Advisory Services in Africa, World Bank Group. Background sector associations in the four pilot states (Cross River, Kaduna, Kano, and Lagos) Nigeria has long struggled with the challenging revealed that the primary land market issue of land reform (see Box 1), but without (government land acquisition) was problematic significant success. The issue is complex. It’s and the secondary market was inefficient. The not just about land; it’s also about someone’s central issue was the Land Use Act of 1978. right to build assets and pass them on to (See Box 2.) future generations. This makes the process of land reform long and difficult, and it gives Because the ICP piloted land reforms at the reforms the power to effect dramatic shifts in subnational level, it was not feasible to the balance of winners and losers in a society. attempt an overhaul of the Land Use Act. In fact, the project’s main goal was to use the Public Disclosure Authorized When the World Bank–DFID Subnational improvements of land administration systems Investment Climate Program in Nigeria was and procedures under the Land Use Act to set launched in 2006, land access and site the reform wheels in motion and advocate for development quickly became one of the top a national dialogue on land-policy reform. reform priority areas, along with tax policy and administration. Consultations with private In order to achieve this goal, it was necessary 1 Department for International Development (United Kingdom), to adopt an appropriate tactic - Think Big, the government department responsible for promoting develop- Start Small, Move Fast. However the challenge ment and the reduction of poverty. was “where to start”. SMARTLESSONS — MARCH 2011 1 In Nigeria, for the mapping and streamlining subcomponent, Box 2: Operating Under Nigeria’s Land Use Act a team of four local consultants covered different states. They had world-class expertise and a good rapport with the According to the Land Use Act of 1978, all land belongs to the states’ counterparts. And once the local team understood [military] governor of the state, and “such land shall be held in the methodology introduced by the international trust and administered for the use and common benefit of all consultant, they customized it to suit the local context and Nigerians.” By replacing existing land laws, the Act intended to moved quickly to implement it over several months. remove corporations, families, and chiefs (especially in Southern Nigeria) from the management of land and to replace them with 2) To transfer ownership, get your government the state governor. counterpart involved in the mapping process. Although the intention behind the Act was noble, it ended up depriving Nigerians of the benefits of the land’s economic value, It is easier for the process owners to experience the because it grants statutory rights of occupancy only, and not of constraints investors face when they are standing on the ownership. Because ownership interests in land are restricted to other side of the counter. As they participate in the data improvements made on the land, the Act provides for collection, they can see the range of difficulties and gain a compensation only on unexhausted developments on the land.2 comprehensive view of the approval process. The result is But more important, it limits land transactions by imposing a greater momentum for change, which is necessary during requirement for a mandatory letter of consent from the the solution design and implementation stage. governor. The situation has been further aggravated by systemic corruption. In October 2008, we launched the mapping of four key land It’s not uncommon to wait six to nine months to register property, procedures in Kano. These procedures dealt with: obtain a building permit, or acquire government land. Also, land prices can be extremely high—for example, $216 per square s the direct grant (government land acquisition) meter in Lekki, a new developing area of Lagos State, or $243 per 3 square meter in Kano State’s financial district. Land transaction s assignment of the Certificate of Occupancy fees also are prohibitively high, especially in Lagos State, where they average 15 percent of the property value. s mortgage of the Certificate of Occupancy, and s conversion of the customary title to Certificate of The objective was clear but the “where to start” part was Occupancy. more difficult. Ultimately, the best entry point was the mapping and streamlining of land procedures, and the Initially, an international expert conducted the mapping, results have been positive. All four states have registered using Microsoft Visio software. The results—a detailed some measurable improvements in dealing with land- flowchart and a report with streamlining recommendations— related procedures—achieving reduction of processing were presented at a workshop attended by the senior time, of steps, and in many instances of transaction fees. officials from the Ministry of Lands and Physical Planning. Figure 1 summarizes the main results registered for this However, there was a buy-in issue. Although they were component. grateful for the report, they didn’t understand the need for the mapping. One official said, “We already know we can Lessons Learned do better. Why can’t the Bank provide us with the technology [computers and networking capability] to automate all 1) Always use local capacity for mapping. these processes?” Consequently, the counterparts didn’t adopt any of the report’s recommendations. The approach Using local capacity has several advantages. For example: was not working. s It builds sustainable reform momentum and local In February 2009, we relaunched a mapping exercise, but expertise. this time the government counterparts were involved in the data collection. The team successfully organized a closed- s It cuts down on travel expenses and high fees for door meeting with all department heads and completed international consultants—some of the biggest costs the mapping of all four procedures. The results were associated with our projects. astonishing—with numbers going up to 196 working days and 54 steps, for example, for the conversion of a customary s Local counterparts bring country-specific experience. title to a Certificate of Occupancy. The directors were shocked when they saw the details of their own work. s Local counterparts can be dispatched quickly to assist clients. 3) Identify the barriers that limit the motivation for reform—and adapt the mapping methodology. s More onsite presence helps the team build rapport with the clients and maintain the dialogue—thus avoiding Flexibility in the mapping approach is necessary—the “cookie the “out of sight, out of mind” rule, which can be cutter” approach should be the exception, not the rule. translated to “nothing is done until the following However, in practice it can be difficult not to follow a proven mission.” 3 The Certificate of Occupancy provides authorization from the local government for 2 Developments that are not in an obsolete state. a building to be used as a public edifice or as a private residence. 2 SMARTLESSONS — MARCH 2011 Figure 1: Mapping and Streamlining Results in the Four ICP Pilot States Mapping and Streamlining : Results Kaduna Cross River Reduction of time from 23 to 17 days for the governor’s Reduction of time from 29 to 23 days for the consent for assignment.