How to Buy Agricultural Land in Nigeria

Agriculture in Nigeria is a branch of the Nigerian economy. According to the FAO report, agriculture remains the backbone of Nigeria’s economy. It is a source of livelihood for most Nigerians. In general, more than 80% of the land is suitable for crop and livestock farming in Nigeria and it has a total area of 910,800 square kilometers. The total agricultural area of Nigeria is 70.8 million hectares.

It is divided into 34 million hectares of arable land, 6.5 million hectares for permanent crops, and 30.3 million hectares of meadows and pastures. Maize, Cassava, Guinea Corn, and Yam are the major crops grown in Nigeria and 70% of households cultivate crops. Land ownership in the agricultural sector of the Nigerian economy is primarily sectarian. The landholding group under this system is a family, village, or community.

How to Buy Agricultural Land in Nigeria — Image Source: Pixabay

An important process under communal ownership is the principle of land instability. The land is essential for agricultural production, and for any nation that wants to be self-sufficient. Nigeria has undergone various land reforms since 1960 aimed at facilitating access to agricultural land and making the nation self-sufficient in food production, but very few changes have been recorded.

The bureaucracy, with the practical approval of the authorities in the communities where the land is located, is still a barrier to acquiring land for agricultural investment. Wheat, Sugar, Fish, and Milk, while major agricultural exports include Sesame, Cashews, Cocoa Beans, Ginger, and Cotton are Nigeria’s major agricultural imports. Sesame, Cashew, and Cocoa account for more than half of the agricultural exports in Nigeria. In developing countries like Nigeria, land acquisition and utilization are major issues of policy compliance.

Guide on how to buy agricultural land in Nigeria, land tenure system in Nigeria, where to buy, tips, important factors, steps to take

Can foreigners buy agricultural land in Nigeria?

The Nigerian Supreme Court ruled that foreigners cannot legally and validly own land in Nigeria. Generally, only Nigerian citizens have the right to buy land in Nigeria as all land in the country is owned by state governors for the benefit of Nigerian citizens only.

The land is slowly being recognized as a major governance issue. In traditional Nigerian society, the land is an indispensable element of production and the source of all material wealth. This is one of the three major factors of production in classical economics (with labor and capital). The land includes other natural resources such as water and trees, and the use of the land includes human activities on the land that is directly related to it. It is a combination of land cover and land use.

Land-use changes as a result of changes in the natural ecosystem’s permanent crops. Transformation of the natural ecosystem for crop transformation; Transforming the natural ecosystem into pasture; leaving croplands; Leaving pastures; Logging and tree planting Land acquisition is broadly defined, which includes not only the acquisition of property rights but also the acquisition of consumer rights, for example through leases or concessions, whether short or long term. The land tenure system can be defined as the rights and institutions that control access to and use of land.

Land tenure system in Nigeria

The land tenure system includes a system of rights, duties, and responsibilities related to the use, transfer, alienation, and protection of property of land and its resources. Continuing, it is clear that land acquisition and use cannot be widely discussed without the inclusion of a land tenure system. Therefore, this chapter provides a comprehensive overview of the literature on the acquisition and use of land in Nigeria and the implications of sustaining food and livelihood security in the country.

Buying agricultural land in Nigeria can be a profitable business. But the land comes in different shapes, sizes, and shapes. Farming or agricultural land is a type that is regularly overlooked. Investors can see significant benefits from investing in farmland, such as commercial or residential, depending on where and what type of farmland you buy.

Farmland is often regarded as one of the best long-term real estate investments there (due to the growing global demand for food). An easy way to earn money from farming is to buy important agricultural land and lease it back to local farmers. However, there are other potential ways to generate revenue.

In Nigeria, the land tenure system varies with tribes, clans, states, and communities. However, after land fragmentation, the population increases from generation to generation, resulting in a reduced availability of land. Land reforms through the land tenure system harm the poor and disadvantaged groups through the unequal power of those in charge of land governance.

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Land tenure system in Nigeria — Image Source: Pixabay

This intervention ultimately determines access to land at the expense of the majority and food production. For some people with power and resources, the institutional framework of reform increases access to land and debt. Land is the most important resource in Nigeria’s agriculture and therefore the policies that affect it affect the farming population more than any other member of the community.

Why invest in agricultural land?

Agriculture land investments can be profitable for many reasons, mainly because agriculture is an essential part of our lives: the food we eat every day comes from farming. Agriculture is all the processes involved in the production of food, fiber, feed, and other essential products by raising various crops and raising livestock. Without it, animals cannot be reared and plants/crops cannot be grown in adequate quantities. Since life depends on agriculture, the demand for good agricultural land will increase as the global population grows.

Where to buy agricultural land in Nigeria

The land has been praised in Nigeria in recent years. This is especially true for agricultural land. That said, not all farmland is the same. Various factors make land valuable for agriculture (or not). These factors include;

Soil quality
The climate of the region
Location
Fertile land most suitable for agricultural purposes and that which sits closer to cities, commands more value.

The more fertile the land, the higher the yield per acre. The closer farmland is to a population, the more likely it is to develop shortly: to give it more potential through value addition.

Overall, Nigeria as a country has an excellent climate and soil structure for growing and rearing almost any type of crop or animal. However, what varies across the country is the quality of the location. The best place to buy agriculture in Nigeria is near urban areas because it has more economic significance. Proximity to urban areas means easy access to the goods and services needed to grow a farm, as well as the market where you will eventually sell produce.

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The country’s two largest urban centers are Abuja and Lagos. These two cities have a large market for both export and local consumption, as they have good infrastructure. Therefore, it makes sense to buy a farm in and around Abuja or Lagos. There is always a demand for land in Abuja and Lagos and therefore it will be easier to sell in the future.

Compare Abuja with Lagos, when it comes to where to buy agricultural land, Abuja is the clear winner. This is due to several reasons;

Abuja is a developing city whereas land in Lagos is more limited.
The location of Abuja, in the north-central part of Nigeria, means that it has the best climate for growing a variety of crops.
Good places to buy farmland in Abuja include Gwagwalada, Kuje, and Kwali among others. You can use the services of real estate agents to find the best deals in these areas.

Tips for buying agricultural land in Nigeria

Acquiring land for agricultural production is like getting any land for other purposes, but certain factors need to be considered.

1. The first thing to consider is to find a standard agricultural land in the place of your choice. The best places for farmland are the rural areas. However, keep in mind that since this is a farm, you will need to find a real estate agent who will take the time to obtain important information, who knows about farming and the details that are important, such as soil types, land space, etc. Many real estate agents only know about city property, so find a good agent who is experienced in buying land for the necessary investments.

2. Infrastructure is another thing to note. You should consider the neighborhood road network for agricultural land, how far is the human settlement, water, phone reception, etc. These are all important entries, even some minor ones like network reception.

3. Proximity to markets – When acquiring farmland, consider how close the farm is to your local markets and distribution channels. This is important for relieving stress from long-haul transport, as it saves time, cost, and energy.

4. Soil assessment on the proposed agricultural land is also a good idea. Information related to the soil, its classification, type, drainage class, various crops that can be planted on the soil, etc. Before buying your land, it is important to know what the boundaries of your land may be. In organic production, it would be wise to test your soil for residues and other heavy metals that may impede your ability to grow organically. And, it can be expensive but worth the investment.

Important factors when buying agricultural land in Nigeria

Finding and accessing cultivable land in Nigeria is the most flexible part of farming for a new farmer, especially those who have any of the inherited varieties. As a farmer, you need to find the right land, find the right factors that surround the land that support your crop yields, give you the maximum yield of your crop and in general, make sure that your farming operation session is uninterrupted.

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Where to buy agricultural land in Nigeria — Image Source: Pixabay

With the 1978 land-use order, the government is the only source of land acquisition in Nigeria in terms of legal rights of occupation, however, statistics show that more than 50% of Nigerian farmers inherit their land. Get through Some large-scale farmers either buy or rent more land to increase their inherited land. Buying or leasing agricultural land is not a one-stop deal. Finding the right field requires patience and determination. Some of the key ways in which land can be easily acquired in Nigeria are;

Government acquisition

At least one million hectares of government land is available in rural Nigeria. These plots of land are usually offered to local and foreign investors at very affordable prices. It is just as easy for farmers to access such lands to start or expand their farms.

Acquisition from village chiefs

In some parts of Nigeria, mostly in rural areas (villages), land acquisition is generally called traditional, that is, through oral agreements with community representatives. This is due to the abundance of land; the villagers are mostly farmers and the land is relatively fertile. In general, potential farmers can contact the village head and request an allotment of land. This is mostly achievable if the farmer has family ties to the village. The rural land market is informal, and in most cases undocumented.

Acquisition from organizations or investors

Investors, individuals, and organizations who have unused land usually partner with farmers who will use their land as long as it is for their intended purpose. Alternatively, the partnership can be designed to give a return on investment to the investor or organization after each farming session.

You need to make sure you know how much land you are buying. Also, always confirm the size before buying or leasing, this can be done with the help of a surveyor. Find out the exact market value of similar land around the area. The decision to buy or lease farmland should depend on your duration and choice of farming. Before buying or leasing this land, there are important factors to consider;

Soil condition

The type and soil condition can affect farming activities. Perform appropriate soil testing tests on the area, determine its type, characteristics, and drainage class. Also, check for heavy metals and other unwanted buried residues that may impede your crop growth. In addition, it is important to understand the flood pattern in the area.

Water supply

Make sure there is a source of clean water available on or around the land before acquiring land. A distant source of water can be labor-intensive and time-consuming which can result in unnecessary expenses.

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Water supply in Nigeria — Image Source: Pixabay

Proximity to market and good road network

Proximity to local markets and distribution channels is very important, especially if your crop is about to be destroyed. Land access to major roads will make it easier for distributors to access your farm location.

Entrance to your farmland

Always check the entrance to your land before acquiring it. The entrance should be wide enough to carry farm machinery and not from any other farm. If there is no road access to the farm, then there is a greater risk of threading and perhaps a sign to back out of the deal.

Land use act in Nigeria

One of the key and complex issues in agricultural land acquisition in Nigeria is the title and duration of land which defines the conditions and rules governing the right to own a piece of land for any purpose. The term land is an institution or relationship, whether legally or traditionally, between people, between individuals or groups, while land governance is a series of political, cultural, institutional, and administrative processes. Make sure that their inputs are considered and integrated during the implementation.

This includes formal and informal actors in decision-making, the implementation of resolutions, and the establishment and management of the necessary infrastructure for such purposes. Although the use of the Land Use Act in Nigeria has weakened traditional term institutions, many people still rely on such arrangements for land delivery.

These institutions retain their traditional power and social responsibility for allocating land use rights, resolving disputes, and performing overall land management. So far little attention has been paid to whether the activities of these local bodies meet the objectives of good governance in land management.

Steps to take for buying agricultural land in Nigeria

1. Determining the type of land

What type of land are you interested in? And where? Tell your agent what you want. It is advisable to state that you do not want any land under government acquisition.

2. Budget

You also need to determine your budget. The price of land varies with the location of the land. You need to decide how much you want to spend on land and direct your agent.

3. Inspection

When you or your agent find a potential piece of land that meets your specifications, it is best to do a physical inspection of the site to determine if the property.

4. Search

Once you find the land that meets your specifications, the next step is to search the relevant land registry. The search is necessary to determine if the seller is the rightful owner of the land if the title offered is genuine and the property is not disputed and is not the subject of any government acquisition.

Unfortunately, there have been occasions when the property has been sold to an unsuspecting buyer while the title of the property is still in dispute, especially where the land is family land. To search, a person usually applies to the appropriate land registry, accompanied by an affidavit stating the status of the applicant and the purpose of the search.

5. Completion of the deed of assignment/conveyance

Once you are satisfied that the vendor title is good, you can now complete the Deed of Assignment. Execution occurs when both parties (buyer and seller) complete and sign the Deed of Assignment and the land is paid.

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Completion of the deed of assignment/conveyance in Nigeria — Image Source: Pixabay

6. Certified copy of title document and survey plan

Your next step is to get certified original copies of the vendor’s title document and survey plan. You will need these two documents when you apply for the governor’s consent. Clear proof of land plot identification is required, so a certified original copy of the survey plan approved by the town planning authority is required. The survey plan gives plot points and should fit into the state’s official map. It also indicates the boundaries of the property. To obtain a CTC, you must apply with an affidavit stating your purpose in the land registry.

7. Encumbrances

An Encumbrance is a burden, a hindrance, or a claim against a property by a party who does not own it. It can also be a financial obligation such as a mortgage, attached to the title to the land and transferred with that right. Before buying land, one should make sure that such land is free from such encumbrances.

8. Obtaining the title from the Land Services Department and stamping the Deed of Assignment

The Honorable Attorney General and the Commissioner of State signed the transfer deed submitted by the Governor. The deeds are then presented for stamping in the stamp duty registry which includes the receipts confirming the payment of stamp duty.

9. Deed and title registration

The stamped deed will then be submitted to the Land Registry with the cashier along with the receipts and payment slips with proof of payment. A Land Officer will be assigned to enter the deed in the registry record.

Domestic agricultural land buying laws in Nigeria

Determine the domestic laws that apply to their acquisition;

Agricultural land-use rights.
Ownership of agricultural land.

The Nigerian Constitution and Land Use Act 1978 (LUA) guarantee the rights of every Nigerian. To start an agribusiness, this can be done by obtaining an occupancy certificate from the state governor or local government. Non-urban agricultural land is controlled: a traditional landowner cannot sell or lease the land. Transfer of possession of other land requires the consent of the state governor or local government.

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Occupancy Right – Nigeria has an elected governor of each state. To acquire land, an individual or corporate entity must apply to the Governor for a land grant and meet other conditions of the grant. The standard procedure in most states is to set up a land bureau or registry under the governor’s office where individual applicants can apply for the issuance of land allotment and certificate of possession. Terms for grant land include;

Production of income tax receipts for 3 years.
Payment of default fees such as survey, ground levy, stamp duty, and registration fee.

There is no uniform rate payable and the value of the land depends on the location and size of the land allotted to the applicant. Some state governments, for example, Osun and Kwara, are willing to give land to foreign companies engaged in agricultural activities with higher speed and less stringent conditions by attracting foreign farmers.

The land grant does not give the holder the right of absolute ownership, but the right of the consumer through the right of possession. The absolute title goes to the governor of a state, trusts the land to the people, and is responsible for allocating land in all urban areas to individuals residing in the state and to organizations for agricultural purposes.

Lands in non-urban areas are most suitable for agricultural purposes, are subject to local government control. A local government may grant any person or organization the traditional right to occupy non-civilian land within its jurisdiction for agricultural, residential, and other purposes. Land acquisition from the local government can be obtained from the governor with a fee waiver, which may be less than the legal right of possession.

No individual can be given the traditional right to occupy more than 500 hectares for agricultural purposes and more than 5,000 hectares for grazing purposes, except with the consent of the Governor. There are no restrictions for businesses. Transfer of possession of agricultural land in non-urban areas by a traditional landowner through sale or lease is legally prohibited and penalized.

Registration – Occupancy certificate issued by the Registration Governor or local government usually states that the grant is for agricultural purposes. The public land registry is intact. Each state’s Registration of Instruments Act imposes an additional requirement to register a land transfer device if it is to be admissible in evidence and to give preference to the holder.

Does maximum lease apply to agricultural land?

Generally, the maximum lease period that can be granted to a non-Nigerian varies from state to state. Where the governor or local government grants the right of possession to a Nigerian company incorporated for commercial or agricultural purposes, the maximum period is 99 years, subject to the fulfillment of the terms and conditions of the right of occupancy.

Procedure for mortgaging agricultural land rights

Briefly describe the procedure for mortgaging agricultural land rights to obtain domestic financial assistance.

Pledges and mortgages

The pledge and mortgages of agricultural land are recognized security arrangements under Nigerian law through which companies can raise funds for agricultural activities.

Pledge

The practice of pledging land as collateral for a loan is common among local farmers and this practice is governed by customary land law. Under this law, a pledge is indemnified indefinitely, no matter how long it may take.

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Mortgage

Mortgage of land is most common among registered companies and individuals. The mortgage must be made by deed or written proof and must be registered in the appropriate land registry. Different state laws, depending on the location of the land, regulate the procedure for creating a mortgage;

In states where the Property and Convention Act of 1959 is applicable or has been adopted, a legal mortgage is a long-term lease that can be made through or a legal charge expressed through a deed. If the mortgagor’s interest is a lease, a sub-lease may be used to make a legal mortgage for a period shorter than the original lease, or a legal charge expressed as a deed.
In some states, legal mortgages can only be made through conveyance.

Relevant laws for mortgages are the Companies and Allied Matters Act and the laws relating to a property, such as the Property and Conveyancing Law, the Law Reform (Contract) Law, the Mortgage Law, the Land Instrument Registration Law, and the registration of each state’s titles law.

Legal restrictions on buying agricultural land in Nigeria

Are there any legal restrictions on buying agricultural land or rights of use by a foreign (or foreign-invested) party?

Generally, a non-Nigerian (whether individual or corporate entity) may not have a definite interest in the land under the applicable local land acquisition laws of each state in Nigeria, but the leasehold may earn interest. The term of the leasehold interest varies from state to state, for example;

In Nigeria, some southwestern states like Oyo, Ogun, Ondo, Ekiti, Edo, and the Delta States are the maximum leasehold interest that can be granted to a non-Nigerian is 99 years.
In the northern states of Nigeria, except for the state of Lagos, the term is limited to 90 years, where it is limited to 25 years.

Under the Companies and Allied Matters Act 1990 (CAMA), if a foreign agricultural company is registered as a Nigerian company (private or public) these restrictions can be avoided, in which case it will enjoy the rights and privileges of natural persons. Obtaining interest in land from public or private entities.

The minimum authorized share capital in the case of private companies is NGN10,000 or in the case of public companies NGN500,000. However, companies requiring business license / Nigerian Investment Promotion Commission (NIPC) registration, expatriate quota, or pioneer status require a minimum share capital of NGN10 million.

1 COMMENT

Seun Adewale January 17, 2023 At 10:16 pm

Can you please educate me on how to gain access to federal government arable land for farming?