Promulgated as a decree on 29 March 1978, the Land Use Act vested all land in each state in the state's Military Governor (now Governor), to be held in trust for the people. It abolished existing freehold and much customary tenure and replaced them with a nationwide leasehold system of statutory rights of occupancy, granted by the Governor in urban areas and by local governments elsewhere. Every transfer, mortgage or subdivision requires the Governor's consent and a certificate of occupancy, and the state may revoke occupancy rights for overriding public interest with compensation limited to unexhausted improvements rather than land value. The Act was entrenched in the Constitution, making amendment extremely difficult.
The Act made the Nigerian state the sole gatekeeper of urban land, so that access to land in Lagos, Kano or Abuja depends on administrative discretion rather than market or customary title. It made the Abuja federal capital project legally possible, but the cost, delay and rent-seeking around certificates of occupancy pushed the great majority of urban land transactions into informality, and it is the single most debated statute in African urban land policy.
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