In 1990, estimates indicated that 82 million hectares out of Nigeria's total land area of about 91 million hectares were arable. However, only about 34 million hectares (or 42 percent of the cultivable area) were being cultivated at the time. Much of this land was farmed under bush fallow, a technique whereby an area much larger than that under cultivation is left idle for varying periods to allow natural regeneration of soil fertility. Another 18 million hectares were classified as permanent pasture, but much of this land had the potential to support crops. About 20 million hectares were covered by forests and woodlands. Most of this land also had agricultural potential. The country's remaining 19 million hectares were covered by buildings or roads, or were considered wasteland.

Nigeria's soil is rated from low to medium in productivity. However, the Food and Agriculture Organization of the United Nations (FAO) concluded that most of the country's soil would have medium to good productivity if this resource were managed properly.

Traditional land tenure throughout Nigeria was based on customary laws under which land was considered community property. An individual had usufructuary rights to the land he farmed in his lineage or community area. He could possess the land as long as he used it to his family's or society's benefit, and could pass the land on to heirs and pledge its use to satisfy a debt, but could not sell or mortgage it. The right of disposal belonged only to the community, which, acting through traditional authorities, exercised this right in accordance with customary law.

The Fulani conquest of much of northern Nigeria in the early 1800s brought a change in land tenure in areas under Fulani control. The conquerors bestowed fiefs on certain individuals, who sometimes appointed overseers with the power to allocate unused land without regard for local community interests. One result was a growing number of grants to strangers during the nineteenth century because overseers sought to increase the revenue from their landlords' holdings. This practice gradually reduced the extent of bush land and encouraged the migration of farmers to urban areas that began toward the end of the nineteenth century.

In the early 1900s, the British established hopemony over the Fulani and declared all land in the former Fulani fiefs to be public property. Subsequently, in contrast to southern Nigeria, where the community owned land in the north the government required occupancy permits. However, at the same time the northern authorities were charged with supervision and protection of the indigenous population's traditional rights, and a general reversion to customary land-tenure practices occurred. In predominantly Muslim areas, traditional land inheritance laws were allowed to remain in force. As a result of the government's support of local customary laws, encroachment by outsiders appears largely to have been halted. In 1962 the government of the Northern Region placed formal restrictions on landholding by individuals who were not members of a northern community. In the south, colonial authorities introduced the concept of individual ownership of property and authorized the legal conveyance of land that could be registered with the government. Various laws and ordinances gave government the power to expropriate statutory landholdings in return for compensation. Expansion of the money economy and the resulting emphasis on commercial crops encouraged farmers to seek private ownership of land. Nonetheless, customary tenure remained the principal form of landholding throughout Nigeria as late as the early 1970s. During the 1970s, however, individuals and business enterprises drove up land prices, especially in newly urbanized areas, by investing heavily in real estate. In the south, customary owners turned from land sales to more profitable high-rent leasing arrangements. In the north, where land was held only by permit, farmers on the outskirts of cities became victims of developmental rezoning. Their permits were revoked, and, only minimally compensated, they moved to other areas. The land was then subdivided and sold at high prices.

In response to a potential crisis in land distribution, the Federal Military Government promulgated the Land Use Decree of March 1978, establishing a uniform tenure system for all of Nigeria. Subsequently incorporated in the constitution of 1979, the decree effectively nationalized all land by requiring certificates of occupancy from the government for land held under customary and statutory rights and the payment of rent to the government. However, the decree stipulated that anyone in a rural or urban area who normally occupied land and developed it would continue to enjoy the right of occupancy, and could sell or transfer his interest in the development of the land.

The main purpose of the 1978 decree was to open land to development by individuals, corporations, institutions, and governments. The decree gave state and local governments authority to take over and assign any undeveloped land. Occupancy or possession of undeveloped land by individuals was restricted. To prevent fragmentation, the statutory right of occupancy could be passed on only to one person or heir.

Data as of June 1991