Business
LASG Explains Controversial Land Use Charge
Amid the complaints about the new Lagos State Land Use Charge, the Commissioner for Finance, Akinyemi Ashade, says an aggregated tax that has combined three erstwhile separate taxes namely tenement rate, ground rent and neighbourhood improvement levy into one.
Ashade, who noted yesterday in Lagos that Land Use Charge had been trending for the wrong reasons recently, said that instead of paying three different taxes, the tax payer pays just one consolidated tax.
“Land Use Charge is not new in Lagos, neither has it been arbitrarily introduced to the state. Rather, it emanated from a long process of deliberation, consultation and engagement, all of which typically precede law-making.
“Indeed, implementation of this particular tax was sequel to the passage of the Land Use Charge Law of 2001 as promulgated by the Lagos State House of Assembly.
“The law has therefore, been operational since 2001. Its stipulations are also fairly simple. It essentially applies to defined categories of property which are in turn required to pay taxes that vary in accordance with the categories.
“In calculating the Land Use Charge, payable on a property, a simple formula is applied: the estimated value of the property is multiplied by relief rate and further multiplied by the appropriate charge rate.
“While the estimated value of a property is self explanatory, I will explain each of the other two terms in more detail,’’ the commissioner said in a statement.
“The `charge rate’ is a relatively small percentage charge that is applied to different categories of property depending on their categorization. A property that is occupied by the owner for instance, enjoys the lowest charge rate.
“A property that is used for industrial or manufacturing activity is categorised as `industrial’ and is charged higher than owner-occupied property but considerably lower than `commercial’ property.
“Commercial property are those property that are deemed to be fully utilised for commercial activity — a bank branch for instance. There are a few categories in-between.
“There is also the `relief rate’ which refers to a discount on the calculated charge.’’
Ashade said the Land Use Charge Law of 2001 stipulated that reviews of the charges payable be made on a five-year basis but for some reason this did not happen.
He said that in 2017 for instance, properties were paying charges based on rates that were last determined in 2001, adding that clearly, after 16 years, those charges had largely become obsolete.
The commissioner said that property valuation did not appear to always follow a uniform standard and that there were often stark variations in property valuation that were inequitable.
“Furthermore, property enumeration did not appear to be proceeding as fast as it ought to and a considerable chunk of property was actually not paying this charge.
“These were some of the inefficiencies in the old Land Use Charge regime that prompted the Lagos State House of Assembly to repeal the old law and promulgate a new one.
“In the course of today’s trending debate on Land Use charge, some commentators have tried to create the impression that the Lagos State Government arbitrarily, without engaging or consulting different stakeholders, increased the Land Use Charge rates payable in Lagos.
“This is not true. The process of the review of the old law and promulgation of the new Land Use Charge Law by the Lagos State House of Assembly was elaborate and painstaking,’’ he said.
Ashade said the draft legislation was rigorously interrogated and debated at the Assembly not only at committee level but over two separate hearings and that memoranda were invited from dozens of stakeholder groups, including civil society groups, community development associations, leadership of local government councils and local council development areas.
Ashade said that even though the law clearly stipulates that upon receiving a demand notice, payment must be made within 14 days, failure of which different penalties of up to 200 percent of the original bill would begin to apply, the reality is that the state government is making key concessions in this area.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
