Introduction

Despite the contestable economic woes of the nation Nigeria, there is no doubt that Nigeria remains a viable investment destination for foreigners. This is especially so where the naira is not playing well in the forex market. Investment opportunities in Nigeria ranges from Agricultures, Fintech, Manufacturing, Exports, Fashion, Music and Real Estate to mention a few. Of particular note is investment by acquisition of land in Nigeria as it is not a straight jacket affair. 1 Indeed, Land is unarguably a vital component of the sovereignty of an independent nation state. It is the territorial aspect of a nation state's sovereignty. Investments in housing, agriculture, natural resource utilization and national security are all anchored on the availability of land as well as access to such available land by its citizens and other residents of the sovereign state.

1. Firstly, there is need to clarify the difference between an Alien and a Foreigner as these words are often used interchangeably. Generally, a Foreigner is a general te rm for a person who comes from a different country wit h respect to a given circumstance per time. 2 So at a gi ven time, one is naturally a national/citizen or a foreigner. An Alien on the other hand is much more specific. It refers to a person who is not a citizen of the country in which they live or work 3 . Essentially, the difference between these two words is with reference to citizenship, residency and work. Thus, arguably a Foreigner may not always be an Alien in every re spect. In the context of this article, the use of Aliens thus is more appropriate because of the nature of investments to be discussed.

Asides from the Land Use Act 4 and other specific laws on ownership of l and, acquisition of real estate by Alien is specifically governed by the Acquisition of Lands by Alien Laws of respective States. For instance, The Acquisition of Lands by Alien Law (ALAL) of Lagos State 5 , defines an "alien" as follows:

"(a)any person other than a native of Nigeria; and (b) any company or association or body of persons corporate or unincorporated other than:

  1. a corporate body (in which the majority of the shares are held by nati ves of Nigeria) established specifically by or under any Act or Law which empowers that body to acquire and hold land;
  2. a corporate body incorporated under the provisions of the Companies and Allied Matter Act- Part C- Incorporated Trustees or any other Act or Law containing general provisions for incorporation where the corporate body is composed solely of natives of Nigeria;
  3. a corporate body established under any Law of the State relating to local government or education and empowered by that Law to acquire and hold land;
  4. a co-operative society the majority of the members of which are nat ives of Nigeria and which is registered under the provisions of any Law of the State relating to co-operative society;
  5. a company or association or body of persons corporate or unincorporated which the Governor may by order made under section 6(2) declare to be exempt from the provisions of this law". It is significant to note that Section 1 of the Land Use Act 1978, provides that all lands in Nigeria are vested in trust in the Governor of each state in the federation for the common benefit of all Nigerians. This brings to fore the significant questions as to whether Alien ownership of real estate is ever possible in Nigeria as acquisition by analien seems to deviate from the spirit of this law. Indeed, there is a mixed body of opinion on whether foreign ownership of land in Nigeria should be possible. While some believe that Land should be the exclusive preserve of Nigerians as rightly identified as a fundamental right 6 , others believe such restriction could greatly limit the extent of foreign investment into Nigeria and also discourage reciprocity of this advantage to be enjoyed by Nigerians abroad.

2. SPECIFIC LIMITATIONS ON OWNERSHIP OF LAND BY ALIENS

The locus classicus on this subject is the Supreme court's case of Gerhard Huebner V.Aeronautical Industrial Engineering and Project Management Company Limited. 7 In this case, it was held among others that Section 1 of the Land Use Act specifically limits the ownership of land in Nigeria to Nigerians. Therefore a non-Nigerian cannot apply for a statutory or customary right of occupancy. This further reaffirmed the position of Section 1 of the Land Use Act to the effect that it was promulgated for the benefits of Nigerians. The Supreme Court in the above case further held that the Land Use Act did not repeal any laws which limit the right of foreigners to own land.

3. HOW CAN A FOREIGNER ACQUIRE PROPERTY IN NIGERIA?

Considering the above limitations, Aliens may still be able to acquire lands or landed properties in Nigeria. In Lagos State, the combined reading of Sections 1-3 of the Acquisition of Lands by Aliens Law (ALAL), limits the acquisition of land or interest in land by Aliens except in two circumstances: the acquisition of land by an alien is approved in writing by the Governor,or where the interest in land sought is for less than three years which includes any option to renew. It provides thus 8 :
Except as provided by this law and any regulation or orders made under the law.
An alien may not acquire any interest or right in or over land from a citizen of Nigeria unless the transaction under which the interest or right is acquired has been previously approved in writing by the Governor. b. Provided that where any such interest or right to be acquired by an alien is less than three (3) years including any option for renewal, the provisions of the law will not apply and
c. Where such interest or right has been lawfully acquired by an alien, that interest or right will not be transferred, alienated, demised or otherwise disposed of to any other alien or be sold to any other alien under any process of law, without prior approval in writing by the Governor of the transaction or sale as the case may be.
d. Any agreement and any instrument in writing or under seal by or under which an alien purports to acquire any interest or right in or over any land (other than any interest or right acquired pursuant to the provisions of this law and regulations and orders made under this law) and which forms part of or gives effect to a transaction that has not been duely approved in accordance with the provisions of this law will be void and of no effect. The law went further to state that where an Alien has lawfully acquired an interest or right of ownership in or over any land from a citizen of Nigeria and such interest or right becomes liable to be sold under any process of law, then such sale will be ordered to be made to the State Government in the first instance, and if the Government declines, then to a citizen of Nigeria. 9 Thus, the State Government has some sort of preemptive right of first refusal upon transfer of interest in such land. The law also made it a crime punishable by fine ofN180,000.00(One Hundred and Eighty Thousand Naira) or imprisonment for 12 (twelve) months for any alien or a person claim ing through such an Alien to unlawfully occupy any land belonging to a citizen of Nigeria 10 . It is therefore beyond a civil infraction remediable by declaration and order for damages. Such an alien will only be exempt from punishment where such occupation was as a result of a transaction which had received the prior consent of the Governor in accordance with Section 1 of the law, or was acquired in accordance with any regulation or order made in pursuance of the law; was acquired by the evidence of an instrument which had been approved by the Governor under any statute; was acquired before the commencement of the law or that such acquisition was authorized by any other enactment. 11 The implication of these wide restrictive provisions is that there cannot be a private valid land transaction between a Nigerian citizen and an Alien that is for a period exceeding three (3) years without the prior beaming of the security searchlight of the Governor upon such a transaction. Furthermore, it is significant to note that the acquisition of land by Aliens Regulation made under the Law provides for a maximum period of 25 (twenty-five) years for all acquisitions of land by Aliens 12 . This Law is more extensive on its restriction on the right of foreign nationals to own land than the Land Tenure Law of Northern Nigeria. While the Land Tenure Law of Northern Nigeria does not limit the term of years of right to Land that could be granted to an Alien with the relevant consent of the minister, the Acquisition of Land by Aliens Law of Lagos State has by regulations made pursuant to the Law, limited the right of occupancy that could be granted to an alien or foreign national to a maximum of 25 (twenty-five) years. 

Summarily, an Alien can acquire land or interest in land from a Nigerian, provided the written approval of the Governor is first sought and obtained before the relevant instruments are executed.

4. PROCEDURE TO APPLY FOR APPROVAL BY AN ALIEN IN LAGOS STATE

  1. Application for the Governor's written approval shall be made in the prescribed form set out in first schedule of the ALAL and it is submitted to the State's Land Commissioner for approval.
  2. The application shall be accompanied by a Treasury Receipt evidencing payment of the statutory fee.
  3. The granting of Governor's written approval shall be at the discretion of the Governor.
  4. Governor's written approval is not required with respect to alien's acquisition of interest or right in Land where such interest or right in the land is less than 3 years or where it concerns an interest or right in land subject to the State land Laws
  5. Upon the procurement of the Governor's written approval, parties may go on to evidence the transaction by executing a registrable instrument.
  6. The interest or right to be acquired shall not be greater than a term of (25) twenty-five years, including any option to renew
  7. The Governor has the discretion to waive or modify the conditi ons stated above, including the condition concerning term of years to be granted.
  8. The Governor's written approval shall be conveyed to the applicant in the form set out in the ALAL Regulation

It is important to note that it is within the discretionary power of the Governor to grant the written approval.

Finally, it is pertinent to note that a foreigner can by an application to the Governor of Lagos State, be exempted from the prov isions of the Acquisition of Lands by Aliens Law.The Governor of other states can also grant similar approval to aliens towards the acquisition of land in their respective states.

5.GLOBAL PERSPECTIVES ON RESTRICTIONS OF OWNERSHIP OF LAND BY ALIENS

Globally, there are mixed perspectives on restrictions of ownership of land by aliens which arguably is well within the rights of the nationals so to do. In Africa for example, examples of countries that have such absolute restriction are Liberia and Lesotho to mention a few. Other European countries such as United Kingdom, Canada, Switzerland also have such restrictions to an extent. 14 Other countries such as Turkey, Croatia, South Korea allow ownership of land by aliens only when there is a reciprocal agreement in place. In fact, as at 2019, it appears that nearly 40% of countries have some form of restriction of foreign ownership of land for various reasons. 15 These restrictions are not without the obvious economic impacts.

CONCLUSION

It is generally expected that there is a clear difference between Citizens and Aliens within a Nation State and their attendant rights. In this light, in Nigeria, an Alien cannot lay a claim to the benefits of the Land Use Act by applying for the grant of a statutory or customary right of occupancy. This will be the position until such time as the National Council of State makes regulations allowing foreigners to acquire a statutory or customary right of occupancy. Foreigners may acquire short term interests in land in the form of leases of a term not more than 3 (three) years or year ly tenancies. These shortterm leases and tenancies would not require any form of government approval for validity. Foreigners may however derive an indirect interest under the Land Use Act using the instrument of a company incorporated under the provisions of the Companies and Allied Matters Act 2004. The company would qualify as a Nigerian to apply for a grant of a right of occupancy. The company would ordinarily have the power to acquire or transfer an interest in land. However, this has to be expressly provided in the Memorandum of Association of that company..

Indeed, a prudent solicitor advises his Alien clients that an Alien can own land in Nigeria,but this is subject to certain restrictions identified under the respective ALAL of different states. The chief restriction under ALAL is the requirement for the State Governor's_written approval before the instrument of transfer could be lawfully executed, failing which subsequent transfer instrument may be regarded as void abinitio. 

Footnotes

1. See article titled Caveat Emptor: The importance of legal due diligence in real estate transactions in Nigeria published at https://trustedadvisorslaw.com/ caveat-emptor-the-importance-of-legal-due-dilig ence-in-real-estate-transactions-in-nigeria%ef%bf %bc/?utm_source=Mondaq&utm_medium=syn dication&utm_campaign=LinkedIn-integration accessed on 11/10/22

2. Oxford Learner's Dictionary accessed from https://www.oxfordlearnersdictionari es.com/definition/english/foreigner

3. Oxford Learne r's Dictionary accessed from https://www.oxfordlear nersdictionaries.com/definition/english/alien_1?q= alien

4. Land Use Act (LUA), 1978, Cap L5 LFN 2004. Section 1 of the LUA particularly provides that all land s in Nigeria are vested in the Governor of each state. Section 1 of the Land Use Act provides that; Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation is hereby ves ted in the Governor of that State, and such land shall be held in trust and administered for the use and com mon benefit of all Nigerians in accordance with the pr ovisions of this Act.

5. See section 8

6. Section 44(1) of the 1999 Nigerian Constitution clearly provides that: No moveable property or any interest in an immo vable property shall be taken possession of compuls orily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by a law.

7. (2017) LPELR-42078(SC). See also the Case of Huebner v. A.I.E. & P.M. Co. Ltd (2017) 14 NWLR (pt 1586) 397

8. Section 1(1) – 1(2), Acquisition of land by Aliens Law, Cap AI Laws of Lagos State, 1974

9. Section 2(3 ) Ibid

10. Section 3(2) Ibid

11. Section 3(1) a-e

12. Regulation 4(9), Acquisition of Land by Aliens Regulations.

13. This is guided by the respective Laws on Alien Acquisition of Land in different states

14. https://thairesidential.com/is-thailand-alone-ho w-many-countries-in-the-world-prohibit-foreign-2022

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.