Nigeria: the Land Use Act, statutory rights and what a RAP has to add

Nigeria's land framework rests on a single structural choice: land is vested in the state, and what a holder has is a right of occupancy granted or deemed. When land is revoked for a public purpose, compensation attaches principally to what was built or grown on it rather than to the land itself.

That produces a compensation basis materially below replacement cost in most cases, and it is the gap a RAP has to close. Confirm the operative statute, state-level practice and current rate schedules before relying on specifics — application varies considerably between states.

The structural gap

Where compensation is directed at unexhausted improvements — structures, crops, installations — a household losing farmland receives the value of what was standing on it and nothing for the productive capacity of the land.

PS-5 requires compensation at full replacement cost and, where livelihoods are land-based, a preference for replacement land.[1] A project paying only for improvements has satisfied the statute and left the substantive obligation open. Bridging that is not a technicality; on an agricultural corridor it may be the largest single line in the budget.

A lawful revocation with a lawful award can still leave a household with no land, no money to buy land, and a receipt for its cassava.

Rate schedules and their age

Crop and economic tree compensation is commonly assessed against state rate schedules, and those schedules are revised irregularly. Where a schedule is several years old in an inflationary environment, the shortfall against replacement cost compounds with every year that passes.

The discipline is the standard one: benchmark the principal crops and structure types against independently built replacement costs, document the comparison, and bridge the gap as project policy with a stated derivation.[2] Adopting the schedule without the benchmark is the most common finding in the country.

Community, family and who receives payment

Much land is held under community or family arrangements, with a head or a council exercising authority over land that individual members farm. Payment to the holder of record can therefore discharge the legal obligation while the people who lost the farming receive nothing.

Separating the entitlement from the payee is what addresses this: record who is entitled by reference to use and claim, record separately who is authorised to receive and on what basis, and document what was communicated to family members about their share.[3] It will not resolve intra-family disputes, but it establishes what the project knew and disclosed.

State-level variation

Governors exercise the relevant powers over most land, and practice differs substantially between states — in rate schedules, in the valuation process, in how quickly awards are paid and in the role of local government. A project operating across several states is operating under several regimes.

For a multi-state programme, the workable approach is a single project compensation policy set at the standard's level, applied uniformly, with statutory processes followed state by state underneath it. The alternative produces neighbouring communities compensated differently for the same loss on the same project.[4]

Where lender leverage actually sits

Many projects here are commercially financed rather than sovereign, which brings the Equator Principles into play and with them the IFC standards as the reference framework for projects outside designated countries.[5] That matters practically: the obligation to bridge the gap to replacement cost arrives through the finance documents, and it is enforceable through them.

What a Nigerian RAP has to carry

• An explicit replacement-cost benchmark against the applicable state schedule.
• A funded top-up mechanism with a documented derivation and an approval.
• Land value addressed on its own terms where livelihoods are land-based.
• Entitlement and payee recorded separately on community and family land.
• One project-wide policy where the programme crosses state boundaries.