Electronic copy available at: http://ssrn.com/abstract=2157273

Nationalization, Expropriation or Confiscation: A Critical Overview of the Pro and Contra Arguments Regarding the Effect

of the Land Use Act on Land in Nigeria By

Duru, Onyekachi Wisdom Ceazar

(Email: onyekachiduru@gmail.com; Tel: +234-8037707496) View my research on my SSRN Author page: http://ssrn.com/author=1874278.

Please note that this essay is being provided for research purposes and is not to be reproduced in any way. If you refer to the article, please ensure you acknowledge both the publication

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Abstract

This paper examines the pro and contra arguments regarding the effect of the Nigerian Land Use Act on land. The paper argues that the terms ‘nationalization’, ‘expropriation’ and ‘confiscation’ inappropriately describes the effect of the Land Use Act on land in Nigeria. What is certain is that the Act only transfers the allodial title from the former allodial owners to the governor, leaving intact all lesser rights. However, the governor does not hold the land beneficially, but holds it in trust for the benefit of all Nigerians.

Introduction

The Land Use Act, 19781 is the major legislation regulating the

use of land in Nigeria. It is trite that no legislation promulgated in this

country has elicited so much controversy, so much criticism, so much

divergence in the interpretation of its provisions, and so much

discourse in academic and business/finance circles as the Land Use

1 Formerly Decree No. 6 of 1978, Land Use Act Cap. 202 LFN, 1990; but, now Land Use Act Cap. L5 LFN,

2004

Electronic copy available at: http://ssrn.com/abstract=2157273

2

Act.2 Indeed, criticism and evaluation of it have been numerous; some

have been mild while others have been in the extreme.3 It would seem

that new dimensions to the controversial Act are being discovered

everyday as more people feel its impact.4 The Act continues to attract

comments and criticisms from the academic, practicing lawyers,

judges and other stakeholders.5 To date, many of the import of some

provisions of the Act still remain largely unclear.6

This article discusses the pro and contra arguments describing

the effect of the Land Use Act as nationalization, partial

nationalization, expropriation and confiscation of land. The better

approach to this would be to consider the contextual connotation of

each of the above terms used to describe the effect of the Land Use

Act, with a new to ascertaining the appropriateness of such

description.

Has The Land Use Act “Nationalized” all lands in Nigeria?

Since the object of this segment is to determine whether the

Land Use Act operates as a “nationalization” of lands; it would not be

2 See A. Nnamani, “The Land Use Act – 12 Years After” (1991) II NLJ at 105.

3 B. A. Shogunle, “The Enactment of the Land Use on 29

th March, 1978: Nationalisation or Expropriation?”

in I. O. Smith (ed.), The Land Use Act – Twenty Five Years After (Lagos: Department of Private and

Property Law, Faculty of Law, University of Lagos, Akoka-Yaba, Lagos-Nigeria) at 49. 4 J. O. Akande, “The Land Use Act 1978 and the Nigerian Constitution” (1982) Journal of the Institute of

Advanced Legal Studies 329. 5 F. O. Adeoye, and H. Ogunniran, “The Socio-Economic Implications of the Consent Provisions of the

Land Use Act” (1991) 4(15) GRBPL 53. 6 C. O. Adekoya, “Land Use Act and Constitutional Matters Arising” in I. O. Smith (ed.), The Land Use Act

– Twenty Five Years After (Lagos: Department of Private and Property Law, Faculty of Law, University of

Lagos, Akoka-Yaba, Lagos-Nigeria) at 19.

3

out of point to precede our discussion by engaging in a definition of

the term ‘nationalization.’ To ‘nationalize’ has five meanings in the

Chambers Dictionary: “To make national; to make the property of the

nation, to bring under national management; to naturalize, to make a

nation.”7 For the Black’s Law Dictionary,8 “it is the act of bringing an

industry under governmental control.”

Therefore, in the context of the Land Use Act, ‘nationalization’

would mean to bring land under the management and control of the

government. It is the taking away of private land for public use. The

legal effect of nationalization would be to completely take over land

with a view to continued exploitation by the state, instead of

exploitation by private individuals, families or communities.

Nationalization of land amounts to determination of all pre-existing

private rights and interest leaving no room for the creation of future

ones. It suggests state ownership, with no individual interest in land

whatsoever.

An acceptance of the view that the word ‘nationalization’ means

to bring under national management and control presupposes a

favourable disposition to the purport of the preamble to the Act, which

states that the Land Use Act is;

7 Quoted from B. A. Shogunle, op. cit. at 53.

8 B. A. Garner, Black’s Law Dictionary Eight Edition (USA: Thomson West Inc., 2004) at 105.

4

An Act to vest all land comprised in the territory of each state (except land vested in the Federal Government or its agencies) solely in the Governor of the state, who would hold such land in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals resident in the state and to organizations for residential, agricultural, commercial and other purposes while similar powers with respect to non-urban areas are conferred on Local Government.

It also presupposes support for the view of Kayode Eso JSC in

Nkwocha v. Governor of Anambra State9 to the effect that;

The Tenor of the Act as a single piece of legislation is the nationalization of all lands in the country by the vesting of its ownership in the state leaving the private individual with an interest in land which is a mere right of occupancy, and which is the only right protected in his favour by law, after the promulgation of the Act.10

Again, if we agree that the word ‘nationalization’ means to bring

under national control and management, then the provisions of section

2 of the Land Use Act which provides for the control and management

of land cannot but emphasize the fact that the Land Use Act operates

as a nationalization of all Lands in Nigeria.

The implication of the foregoing line of reasoning is the

argument that the vesting of the allodial title to land in the Governor

9 (1984) 6 SC 362

10 Ibid. at 404. Immense controversy has followed the above dictum. In fact, it has been argued that ‘such

dictum which suggests that the Act transfers beneficial rights in land to the Governor is at best misleading

and at the worst dangerous’: Omotola, “Does the Land Use Act Expropriate?” (1985) 3 JPPL 1.

5

under section 1 of the Land Use Act has nationalized land in the literal

sense because the ownership and control of land are now in the

government, with private individuals having only a mere right of

occupancy. The argument that the Land Use Act nationalized land is

further reinforced by the provisions of the Act which makes the right of

occupancy the highest interest that can subsist in any person and on

devolution whether by will or not, the best interest transferable.11

However, legally and stricto sensu, land has not been

nationalized under the Land Use Act, because pre-existing private

rights and interest still exist in land and future ones can be created.

The rights of the citizen in land, although regulated is in no way

destroyed. The right to enjoy remains, the right to dispose is only

impaired except the transaction relates to land coming under section

36 of the Act which bars completely transactions in land. As a matter

of factly, the letter and spirit of the Land Use Act do not suggest

abolition of existing titles and rights to possession in favour of the

state.12

This position finds support, not only in the dictum of Nnaemeka-

Agu JSC in the case of Abioye v. Yakubu13 to the effect that the Land

11

See generally, section 26 of the Land Use Act which provides that “any transaction or any instrument

which purports to confer on or vest in any person any interest or right over land other than in accordance

with the provisions of the Act shall be null and void. See also, sections 1, 5, 6, 8, 25, 34 and 36 of the Land

Use Act. 12

I. O. Smith, Practical Approach to Real Property in Nigeria (Lagos: Ecowatch Publications, 1999) at 305. 13

(1991) 5 NWLR (Pt. 90) 130 at 214

6

Use Act “intended to preserve existing interests in land subject to the

provisions of the Act. As the Act made no contrary provisions, there is

nothing to prevent such interests from having their full force and

effect”; but also, in the words of Nnamani JSC in Savannah Bank

Nigeria v. Ajilo14 as follows;

I would not of course subscribe to the view that the Act nationalized land in Nigeria for there are provisions which protect individual dealing with land subject to the provisions of the Act which is inconsistent with the concept of nationalization.15

Not only that, Section 34(4) of the Land Use Act recognises the

encumbrances of legal and equitable mortgages or other interests

valid in law on Land before the commencement of the Land Use Act,

unless the continued operation of the encumbrance or interest would

in the opinion of the Governor be inconsistent with the provisions or

general intendment of the Act.

The Act also allows individuals to deal with land by creating

other lands, subject to the consent of the Governor as provided for in

sections 22 and 26 of the Act. Also, under the Act, no compensation is

payable to allodial owners as would have been the case under

Nationalization. Section 29 of the Act provides that compensation

14

(1989) 1 NWLR (Pt. 97) 305. 15

Ibid. at 352.

7

would only be made for unexhausted improvement on the land and

not for the full value of the land.

Accordingly, while the Land Use Act has harmonized the land

tenure systems of the northern and southern parts of Nigeria, it cannot

be said to have absolutely nationalized all lands in Nigeria. Therefore,

the view that is suggestive of this is unacceptable. The purport of the

Act is to vest the radical title to land in the Governor, devoid of the

possessory interest of erstwhile landowners, upon trust.16 This means

that the Governor is not beneficially entitled to the land so vested in

him; but he is constituted a trustee of the land for the benefit of all

Nigerians.17

If not Nationalization, is it Partial Nationalization?

By partial nationalization we mean nationalization in part. This is

because the word partial means “not complete or whole.”18 A major

proponent of ‘partial nationalization’ as an effect of the Land Use Act

on land in Nigeria is Justice Nnamani. He agrees that the land use Act

16

For a legal account, appraisal and analysis of the concept of trust under the Land Use Act, see E. E.

Essien, “The ‘Trust’ Created by the Nigerian Land Use Act, 1978” (1998) 2 Uniuyo L.J. 97; M. A. Banire,

“Trusteeship Concept under the Land Use Act: Mirage or Reality?” in I. O. Smith (ed.), The Land Use Act –

Twenty Five Years After (Lagos: Department of Private and Property Law, Faculty of Law, University of

Lagos, Akoka-Yaba, Lagos-Nigeria) at 90 and T. Ajala, “Third Party Right under the Land Use Act” in I. O.

Smith (ed.), The Land Use Act – Twenty Five Years After (Lagos: Department of Private and Property Law,

Faculty of Law, University of Lagos, Akoka-Yaba, Lagos-Nigeria) at 390. 17

D. E. Nelson, “The Land Use Act 1978 and Real Property Management in Nigeria” (2010) 1 Uniuyo JCPL

34 at 37. This accords with the view that ‘there would appear to be no objection to the view expressing the

Governor’s title as one of trustee – ownership’: R. W. James, Nigerian Land Use Act: Policy and Principles

(Ife: University of Ife Press, 1987) at 37. Compare the view in J. F. Fekumo, “Does the Land Use Act

Expropriate – A Rejoinder” (1988) 10 & 11 JPPL 5 18

A. S. Hornby, Oxford Advanced Learners Dictionary New Special Price 7th

Edition (Oxford: Oxford

University Press, 2005) at 1062.

8

has not nationalized land, but however, describes the effect of the

Land Use Act as partial nationalization.19 According to him;

It seems that while the Land Use Act may not have nationalized land in the proper sense of that term, it certainly did enough to terminate the concept of private ownership of land for there is no sense in which a mere right of occupancy which is granted and can be revoked by the Governor can be compared to a fee simple title absolute in possession.20

Whatever is the case, one can say that if something is not

panadol, it cannot be like panadol. Thus, it is either there is

nationalization or there is no nationalization. If there is partial

nationalization, then there is no nationalization.

Does the Land Use Act Expropriate?

In keeping with the approach of commencing each segment with

a definition; the word expropriate “means to take away private

property for public use or to take something from someone illegally in

order to use it”21 According to the Black’s Law Dictionary,22

‘Expropriation’ means

A governmental taking or modification of an individual’s property rights, esp. by eminent domain; a voluntary surrender of rights or claims: the act of renouncing or divesting

19

A. Nnamani, op. cit. at 37 20

Ibid. 21

Longman Dictionary of Contemporary English, New Edition quoted from B. A. Shogunle, op. cit. 53. See

also, the definition of the word in A. S. Hornby, op. cit. at 516, where the word was defining as

government’s official taking away of private property from its owners for public use. 22

B. A. Garner, op. cit. at 621.

9

oneself of something previously claimed as one’s own.

Again, the word ‘expropriate’ means;

Compulsorily depriving a person of a right of property belonging to him in return for a compensation. The term has been introduced from its use in foreign countries to denote a compulsory purchase of land for public purposes.

Thus, the noun ‘expropriation’ or the verb ‘to expropriate’

connotes the inherent power of a governmental entity to take privately

owned property, especially land and convert it to public use, subject to

reasonable compensation for the taking.

The words, ‘expropriation’ and ‘nationalization’ could in certain

respect be used interchangeably in relation to real property to connote

the impairment of the freedom to exercise those main rights which

determine ownership of property, such as the right of management,

rights of physical and exclusive possession and use and right of

unfettered alienation.23

However, the truth is that the two concepts do not mean the

same thing. Nationalization is wider in scope than expropriation. The

expression “taking something from someone illegally in order to use

it”, which is another dictionary meaning for ‘expropriation’ cannot by

any stretch of rhetorical or semantic extension, be subsumed under 23

I. A. Umezulike, “Does the Land Use Act Expropriate?” (1986) 5 JPPL 61 at 62. See also, A. Emiola,

“Land Use Act 1978: The Unanswered Questions” (1984) Nigerian Current Law Review 172.

10

the definition of the word ‘nationalization’.24 From a formal legal view-

point, nationalization does not connote illegality.25 Quite apart from

this, while ‘nationalization’ connotes taking away private property for

public use, the property or thing taken away in ‘expropriation’ is

usually done for some interior motives.26

Professor Bradley,27 noted that the significance of these

formulations is that nationalization may be distinguished from

expropriation or compulsory purchase of particular pieces of property,

of which the typical example would be the acquisition of land by a

public authority for public purposes. That is to say that the act of

expropriation is directed at particular persons; it is not general,

whereas where land in a particular region is nationalized, no individual

is exempted.

Be that as it may, it has been posited that section 1 of the Act

hints at only one radical possibility; namely, the expropriation or

nationalization of land.28 Thus, by virtue of section 1 of the Land Use

Act the system of private ownership of land in which land was owned

by families, individuals or communities in freehold, such land having

come to them either by inheritance, outright purchase, gift, conquest,

24

B. A. Shogunle, op. cit. 53. 25

Ibid. 26

Ibid. 27

A. W. Bradley, “Legal Aspects of the Nationalization in Tanzania” (1967) EALJ 149 at 151-152. 28

I. A. Umezulike, op. cit. at 61.

11

or first settlement, became extinguished. The argument here is that

the provision expropriates the radical title or the concept of absolute

ownership in favour of the Governor in the light of the sections of the

Act.

This semblance of expropriation is further accentuated by the

fact that when the whole of the 49 substantive sections of the Land

Use Act are closely examined, it would be apparent that the only lands

affected by the vesting provisions are lands held by individuals,

families and private corporations and what is more, section 5 of the

Act empowers the governor to grant statutory right of occupancy to

any person for all purpose, and any such grant by the Governor

operates to extinguish all existing rights to the use and occupation of

the land.

Furthermore, sections 21-23 of the Act, firmly established the

Governor’s supervision and control over all land in the state such that

no transaction or alienation would take place in property without his

consent having first been sought and obtained. Thus, in place of the

citizens’ prior ownership right is now transposed a mere right of

occupancy issued by the Governor or local government.

This seemingly expropriatory character of the Land Use Act is

also evident in the dilemma of the family within the context of the Act.

As pointed out earlier, under customary law, three categories of

12

persons are capable of holding land - individuals, community and the

family. In fact, the family is the focus of land holding in Nigeria under

customary law. As such almost every inch of the Nigeria soil now

purportedly vested in one Governor or the other apparently belongs to

a Nigeria family.

Lamentably enough throughout the 49 substantive sections of

the Act, not once was the word “family” mentioned; nor is there

anything to suggest that a family is recognized as having capacity

under the Act to hold land. Furthermore, although ‘occupier’ or

‘customary right of occupancy’ is defined in section 50 of the Act in

terms of a ‘person or community lawfully occupying land’, nowhere is

reference made to ‘family’ in the Statute. Even if this is possible, the

problem posed for the family is the size of land which it can hold as a

person in view of the provision of section 6(2) of the Act which

provides that “no single customary right of occupancy shall be granted

in respect of an area of land in excess of 500 hectares if granted for

agricultural purposes….”29

Obaseki JSC alluded to the seemingly, expropriatory character

of the Act when he opined as follows;

It is an understatement to say that this Decree or Act abrogated the right of ownership of land

29

The foregoing views are in tandem with that in B. A. Shogunle, op. cit. at 54-55. It is noteworthy that the

latter argued, drawing support from section 18 of the Interpretation Act, 1964 that the interest of the family

can be accommodated under the Land Use Act.

13

hitherto enjoyed by all Nigerians. Whereas a Nigerian would own land absolutely anywhere in the southern states of Nigeria, this took away from him that right of ownership, limited the area of land he can acquire for his residence and farming and limited the interest he can acquire to a mere right of occupancy either statutory or customary and worse still, made him perpetually liable to pay rent for occupying his own land and the land of his forefathers.30

Conversely, the contention that the Land Use Act operates as an

expropriation of lands in Nigeria cannot stand. In other words, the

effect of the Land Use Act cannot be described as expropriation. This

is because when land is expropriated compensation is paid for the

value. Expropriation operates as compulsory purchase. Thus, while it

may be argued that divesting individuals of the allodial title to land and

vesting same in the Governor amounts to expropriation of land in

Nigeria; such an argument cannot stand because the act of

expropriation is directed at particular persons and as can be seen, the

Land Use Act affects all lands in Nigeria.

The fact that no compensation is paid for the land also shows

that the Land Use Act did not expropriate land. Section 29 of the Land

Use Act only provides for compensation to be paid for unexhausted

improvements on the land and not for the value of the land.

30

Obaseki, A Paper Delivered at the Association of Law Teachers Conference (1988) quoted in B. A.

Shogunle, op. cit. at 56-57.

14

It is implicit in the provision of section 44(1) of the 1999

Constitution (as amended) that once a citizen has acquired a right or

an interest in any moveable or immoveable property, it will not be

taken from him unless as prescribed by law. The Supreme Court in

Abioye v. Yakubu (Supra) has categorically held that the Land Use Act

did not expropriate and that “to say that the Act had abolished the

contractual relationship between customary owners and customary

tenants is to say that with that legislation, the customary owner is

deprived of his property without a hearing” and that “the fundamental

right to own property cannot be supplanted without adequate provision

for compensation”

Again, Section 22 and 26 of the Act allows individuals to alienate

their right of occupancy or create lesser rights with the consent of the

Governor. Also, section 34(4) protects all other existing lesser rights

before the enactment of the Act; as long as they are not in consistent

with the Act. The fact that these conditions exists show that the Act did

not expropriate land in Nigeria.

What is more, the concept of trust explicit in Section 1 of the

Land Use Act automatically knocks the bottom out of the whole of the

argument concerning the so called expropriatory character of the Act.

It is clear from that section that the Governor is a mere trustee of the

land vested in him and Nigerians in the state are beneficiaries.

15

Nigerians in the state are the real owners, while the governor is a

mere nominal owner as trustee.

It is further submitted that the requirement of consent before

alienation under especially, section 21 and 22 of the Act does not

strengthen the case of real ownership (or expropriation), but that of

administrative control as a trustee of the land. What the Governor

really posses are the ultimate or radical title qualified by the

usufructuary rights of the citizen which cannot be disturbed merely by

the transfer of sovereignty in absolute terms.

Has the Land Use Act Confiscated Land?

As usual this segment begins with conceptual clarifications.

Thus, according to the Black’s Law Dictionary,31 the word ‘confiscate’

means to appropriate (property) as forfeited to the government; to

seize property by authority of law. Confiscate is to officially take

something away from somebody, especially as punishment.32 Thus,

confiscation is penal in character.

Section 34(5)(a) which provides for the half heater rule has been

described as confiscatory. It is said that the section has confiscated

land in excess of half hectare without payment of any compensation.

The argument is that it will not be fair to the former owners who will

lose their many portions of land to the government without any 31

B. A. Garner, op. cit. at 319. 32

A. S. Hornby, op. cit. at 305.

16

compensation in return. However, this it is submitted, is not the case.

The idea behind the rule is to revert the land in excess earlier held by

the former owners in urban areas to the government, leaving such

former owners with a plot not more than half hectare. The excess

lands, so reverted are administered for the common benefit of all

Nigerians.

Additionally, an application of the foregoing definitions to the

question whether the Land Use Act has in effect confiscated land in

Nigeria, reveals that it has not. Confiscation is in the realm forfeiture of

property which connotes seizure of property for a breach of conduct or

infraction of law. Thus, the effect of the Land Use Act cannot be

described as confiscatory, since the Act makes provisions for the

payment of compensation on unexhausted improvements on land.

Lastly, the aim of the Act is not punishment, but the

administration of land for the benefit of Nigerians. Even when a right of

occupancy is revoked, it is not always done as a punishment as

section 28(2) provides that the right of occupancy could be revoked for

overriding public interest.

Conclusion

All in all, it can be said that none of the above terms

appropriately describes the effect of the Land Use Act on land in

Nigeria. What is certain is that the Act only transfers the allodial title

17

from the former allodial owners to the governor, leaving intact all

lesser rights. However, the governor does not hold the land

beneficially, but holds it in trust for the benefit of all Nigerians. It is

doubtful if the Act has indeed guaranteed the rights of Nigerians to

land or succeeded in settling boundary disputes and endless litigation

on the ownership of land.

It is suggested that instead of repealing the Act in its entirety and

thus creating a new set of confusion and controversy, concerted

efforts should be made for a national conference on the review of the

Act. This will enable all shades of opinion to be taken and considered

and accordingly effectively address all ills plaguing the Act. The

judiciary alone cannot effective tackle the many problems bedeviling

the Act’s realization of its objectives.