IMF backs property tax reform for sustainable growth in developing economies
Nigeria is poised to unlock an estimated $300 billion in untapped capital through nationwide land registration, the country’s Housing and Urban Development Minister, Ahmed Dangiwa, announced this week. Speaking at the 13th National Council on Housing, Lands, and Urban Development in Gombe, Dangiwa revealed that over 90 percent of Nigerian land remains undocumented. He called for state collaboration to secure land ownership through comprehensive registration, a move he says will drive both economic development and investment.
“Currently, over 90 per cent of the country’s land remains unregistered,” Dangiwa stated, describing the vast potential for Nigeria’s land assets to fuel growth by allowing owners to leverage property for loans and investment. His remarks underscored the need for a formal land economy, one that could fundamentally transform access to capital for millions of Nigerians.
The significance of land registration has drawn international attention, particularly from the International Monetary Fund (IMF), which recently identified property tax as a key revenue driver for sustainable growth in low-income and emerging economies. An IMF report recommended that developing countries improve property-tax coverage through advanced technology like drones and satellite imagery, projecting that with effective reform, revenues from property taxes could grow by up to tenfold.
With large economies like Lagos and Delhi serving as examples, the IMF pointed to localised property tax as a politically viable alternative to broad national tax hikes. “The appeal of property taxes is clear when we look at advanced economies,” noted the IMF, observing that recurrent taxes on immovable property generate more than one percent of GDP in OECD countries. In emerging Asia and Africa, however, property tax revenue lags significantly, at roughly 0.1 percent of GDP.
To ensure smoother adoption, the IMF advocated for an area-based tax system as an initial step, allowing municipalities to transition to a market-value-based tax structure as technological and valuation systems evolve. With cities like Delhi and Bangalore already using geographic information systems (GIS) and drones to track property changes, similar initiatives in Nigeria could help local governments effectively capture urban wealth and address resource gaps, noted the IMF.
“The world’s governments must raise an additional $3tn to achieve sustainable and inclusive economic growth goals this decade,” the IMF concluded, urging Nigeria to embrace property taxes as a cornerstone for funding essential services, fostering economic stability, and ensuring future growth.
