Nigeria lags behind S/Africa in ease of registering property, doing business

Though by virtue of its GDP size valued at $510 billion, Nigeria is adjudged the largest economy in Africa, South Africa, another economic giant in the continent, is ahead of the country in a number of economic growth indices or parameters including ease of registering property.

Whereas, it takes 15 days and 23 days to register property in US and South Africa, respectively, but it takes 70 days to do same in Nigeria and, according to World Bank’s 2015 Housing Finance Africa Publication, property registration in this country takes 12 procedures as against four and seven in US and South Africa, respectively.

Olusola Olubode, former managing director, Refuge Homes Savings and Loans Limited (mortgage bankers), explains to BusinessDay that Nigeria also lags behind countries like Ghana, Thailand and New Zealand in ease of registering property, pointing out that in Ghana it requires just five procedures, 34 days and 1.3 percent of a property value to register the property.

Olubode hints that in New Zealand, property could be registered online in two days at a cost of 0.1 percent of the property value, stressing that Nigeria is one of the world’s most difficult places to register property, especially when, in Thailand, registering property requires just one step, less than a day and 1 percent of property value.

Similarly, Abudulrahman Kadiri, CEO of Lagos-based Arkgold Properties, also tells BusinessDay that in Dubai, United Arab Emirate (UAE), in less than 72 hours a buyer should have perfected his land titles, adding that “you don’t even have to pay through your nose to get building approval.”

Dapo Ojo of Estate Links Limited also tells BusinessDay that in UK, it takes 1-2 months, six procedures and 4 percent of the value of the property to register a property.

For a number factors including stringent regulatory policies and poor infrastructure base, Nigeria has one of the most difficult operating environments for businesses which explains its 169th position in the World Bank’s 2015 ease of doing business ranking where South Africa is ranked 43rd and US is ranked 7th.

This, arguably, explains why as against 80 inter-regional private equity firms looking to invest in South Africa’s real estate market, 30 in Egypt and 40 in Kenya, only 16 of such companies are interested in Nigeria’s real estate market due, as stated earlier, to difficulty in registering property and doing business generally.

The 2012 Report on Nigerian economy by the Nigerian Economic Summit Group (NESG) notes that, in Nigeria, there are10 domestic and private equity firms looking to invest in the country.

Private equity investments in Africa has seen phenomenal increase from $151 in 2002 to $3 billion in 2011 and, according to Emerging Markets Private Equity Association, South Africa accounted for the largest portion of these investments, leaving Nigeria with just 10 percent of the continent’s total.

In the Nigeria, the disparity between the country’s large GDP size and the high poverty level has always been a source of concern and a comparative real estate indices by Akintola Williams Deloitte shows that Nigeria’s population below national poverty line is 46 percent as against South Africa’s 34.4 percent and 14.8 percent in the US.

It is easy to understand from the indices why as high as 80 percent of adult Nigerians live in rented accommodation and spend about 50 percent of their income on paying house rent and this is because in this country, the price to rent ratio, especially outside the city centre is as high as 20.35 percent as against 8.73 percent and 11.4 percent in US and South Africa, respectively.