VZCZCXRO5771
PP RUEHMA RUEHPA
DE RUEHUJA #1344 1770859
ZNR UUUUU ZZH
P 260859Z JUN 07
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 0017
INFO RUEHOS/AMCONSUL LAGOS PRIORITY 7233
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ABUJA 001344 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT PASS TO USTR AND OPIC (ERB) 
TREASURY FOR LUKAS KOHLER/DAN PETERS 
USDOC FOR 3317/ITA/OA/KBURRESS 
USDOC FOR 3130/USFC/OIO/ANESA/DHARRIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV PGOV NI
SUBJECT: STATUS OF REFORMS IN THE NIGERIAN HOUSING SECTOR 
 
 
¶1. Summary. Key elements of the Land Use Act, which are major 
obstacles to housing reforms, will require a constitutional 
amendment to change. President Yar'Adua is eager to create an 
enabling environment for the housing sector.  Key amendments 
proposed to housing-related legislation were not passed by the last 
parliament and will have to be re-introduced.  While no 
cabinet-level appointments have been made yet, there are supporters 
of housing reform already in the Yar'Adua administration.  A key 
contact, Tanimu Yakubu, an advocate for housing and the head of the 
Federal Mortgage Bank of Nigeria (FMBN) is a confidant of the 
president and might get a senior position in the new administration. 
End summary. 
. 
Land Titling Reforms 
-------------------- 
. 
¶2. Key elements of the Land Use Act of 1978 are included in 
Nigeria's constitution, covering title to all land in Nigeria. The 
Act vests all land in the government, and requires a state 
governor's approval before land transactions can be concluded, which 
has been a major obstacle to creating mortgages, hindering growth in 
the housing sector. Amending the Land Use Act/constitution  would 
require a two-thirds majority in the National Assembly (House of 
Representatives and the Senate) and in each of the 36 state houses 
of assembly for approval.  The new president recognizes the problems 
with the act, and has indicated he plans to seek amendments that 
would make land ownership much easier. 
. 
Status of Reform, Foreclosure, Securitization Bills 
--------------------------------------------- ------ 
 
¶3. Proposed amendments to other housing-related legislation such as 
the Federal Mortgage Bank of Nigeria Act, Mortgage Institution Act, 
National Housing Fund Act, Land Use Act, Investment and Securities 
Act, Trustee Investment Act, Insurance Act, Nigeria Social Insurance 
Trust Fund Act, and the Federal Housing Authority Act were not 
passed before the new administration took office and will have to be 
re-introduced to both houses of the National Assembly.  Foreclosure 
and securitization were to be covered by new bills that have not yet 
been introduced.  The Honorable Osita Izunaso, a champion of 
legislative reforms for housing, was in the House during the last 
administration and is now in the Senate.  Izunaso is likely to 
re-introduce the bills and gather support for them. 
. 
New Housing Policy Direction 
---------------------------- 
. 
¶4. A strong supporter of the bills, Tanimu Yakubu, Managing Director 
of the Federal Mortgage Bank of Nigeria (FMBN), is a close associate 
of President Yar'Adua, and is likely to elicit the president's 
support.  Yakubu took leave from the FMBN to assist the president 
during his election campaign and has remained with him since.  The 
President has yet to appoint a new cabinet, however, Yakubu is 
likely to be appointed to a senior position.  Based on Yakubu's past 
efforts, we expect him to champion housing reform and improve the 
mortgage situation. 
. 
State Focus 
----------- 
. 
¶5. Land issues are handled mainly by the states. At the moment the 
states where there is a dire need for housing because of rapid 
urbanization are Lagos, Rivers (Port Harcourt) and Abuja.  Rivers 
State which is in the Niger Delta is experiencing high levels of 
violence including regular kidnappings of expatriates. Official USG 
travel is prohibited to the state, except in exceptional 
circumstances. 
 
¶6. Currently, because of the costs involved in titling, banks and 
borrowers often come up with "creative solutions" that sidestep the 
necessity of transferring title to the bank (at a cost of 15% or so 
of the property value) and transferring the title back to the owner 
once the mortgage has been paid.  A practical solution for most 
transactions becomes problematic when borrowers are in default. 
 
CAMPBELL