The informal land market in Nigeria is increasingly favoured by real estate investors due to its speed, affordability and flexibility, according to a report by Northcourt Real Estate. While the formal land system is governed by state law and requires registration, the informal market operates outside government oversight and remains unregistered. Only 5 percent of land in Nigeria is officially registered, leaving 95 percent outside the formal economy and unusable as collateral. The report attributes the shift to inefficiencies in the formal system, including slow processes, outdated regulations and rigid planning controls.
Investors find the informal market more accessible, with wider location options and lower costs. In Lagos, farmland has sharply declined from 1984 to 2024, decreasing by 22,538.34 hectares as urban development expands. A study by Federal University Ekiti, Federal University of Technology Akure and Obafemi Awolowo University shows that from 2013 to 2024, farmland was lost at an annual rate of -2.42 percent, up from -0.45 percent between 1984 and 2013. Light forest, open spaces, shrub and waterbodies also saw accelerated losses during the same period.
Meanwhile, developed areas grew at 4.94 percent annually from 1984 to 2024, with wetlands expanding at 2.06 percent per year. The report notes that customary land actors play a growing role in shaping urban development patterns where formal systems fail. Urban farming in Lagos is declining due to land conversion for housing and infrastructure, despite its potential as a livelihood source. The report highlights that informal land transactions often gain legitimacy through government-backed regularization programmes after purchase.
The government promotes land registration while its weak enforcement drives investors into the informal sector it fails to regulate. With 95 percent of land unregistered, the formal system's rigidity benefits few but forces most Nigerians into legal limbo. Investors exploit this gap, converting farmland and natural spaces into profit-making developments without accountability. The loss of 22,538.34 hectares of farmland in Lagos signals not just urban growth but the state's retreat from sustainable land planning.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
