Nigeria slum upgrading, involuntary resettlement, land and housing : lessons learned from the experience in Lagos and other mega-cities

Report No: ACS13975 Federal Republic of Nigeria Slum upgrading, involuntary resettlement, land and housing Lessons learned from the experience in Lagos and other mega-cities June 23, 2015 GSURR AFRICA Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. ii Table of Contents Table of Contents ..................................................................................................................................................................... iii Abbreviations and Acronyms.............................................................................................................................................. iv Executive Summary ................................................................................................................................................................ vi Part I. Overview..........................................................................................................................................................................1 1. Objective of the study ..................................................................................................................................................................... 1 1.1 Background: LMDGP and its involuntary resettlement experiences ............................................................ 1 1.2 Scope and outline of the study ....................................................................................................................................... 1 2. Nigerian context of slums and involuntary resettlement ............................................................................................... 2 2.1 Urbanization trends and urban challenges ............................................................................................................... 3 2.2 Housing deficit ....................................................................................................................................................................... 4 2.3 Dysfunctions in land management ............................................................................................................................... 7 Tenure insecurity ............................................................................................................................................................................. 7 Inefficient land management – High costs of formalization or formal development ......................................... 8 Fragmented metropolitan planning ......................................................................................................................................... 9 2.4 Informality.............................................................................................................................................................................10 Part II. Lessons Learned from the Involuntary Resettlement Experience ........................................................ 12 3. Involuntary resettlement processes and outcomes ........................................................................................................12 3.1 Processes ................................................................................................................................................................................12 Identification/ Preparation till Negotiation/Approval (2002-2007) .....................................................................13 Implementation until restructuring (2007-2011) ...........................................................................................................13 Implementation after restructuring (2011-2013)...........................................................................................................13 After project closing (2013-2014) ..........................................................................................................................................14 3.2 Evaluation of the involuntary resettlement outcomes ......................................................................................15 Resettlement planning .................................................................................................................................................................16 Eligibility criteria ............................................................................................................................................................................16 Compensation ..................................................................................................................................................................................17 Consultation and participation .................................................................................................................................................19 4. Analysis of involuntary resettlement challenges in LMDGP .......................................................................................19 4.1 Analysis (1): Existing conditions (without the Bank involvement) .............................................................20 Legal/Policy framework for involuntary resettlement in Nigeria and Lagos .....................................................20 Institutional arrangement and capacity among key policy makers for involuntary resettlement ............21 4.2 Analysis (2): Conditions related to the Bank involvement ..............................................................................22 Legal/policy framework ..............................................................................................................................................................22 Institutional arrangement with the political economy ..................................................................................................23 Capacity for involuntary resettlement and capacity building ....................................................................................24 4.3 Lessons learned...................................................................................................................................................................24 Integrated approach to slums and involuntary resettlement.....................................................................................25 Identification of political and technical champions and an appropriate institutional support ...................25 Upfront dialogue and negotiation on involuntary resettlement ...............................................................................26 Part III. Policy and Operational Recommendations .................................................................................................. 28 5. Urban sector engagement on slums .......................................................................................................................................28 5.1 Reforming land regulations, administration and management ....................................................................28 5.2 Involuntary resettlement as an integrated part of slum upgrading and broader urban agenda: ..31 5.3 Comprehensive and integrated urban planning ...................................................................................................33 References................................................................................................................................................................................. 37 Annexes ...................................................................................................................................................................................... 40 Annex I. Overview of the LMDGP ......................................................................................................................................................40 Annex II. Comments on the Land Use Act ......................................................................................................................................42 Annex III. List of forced eviction cases in Lagos and elsewhere in Nigeria (1973-2013) ........................................44 Annex IV: Lessons Learned from International Case Studies ...............................................................................................46 iii Abbreviations and Acronyms ANAT ANAT BDs Bidding Documents BERs Bid Evaluation Reports C&V Crime and Violence C of O Certificate of Occupancy CEPAC Certificates of Additional Construction Potential CGC Community Grievance Committee CIS inter-Ministerial Committee CIUP Community Infrastructure Upgrading Program CMC Citizens Mediation Centre CUPs Community Upgrading Plans DCD Development Control Department DLAs Dar es Salaam Local Authorities DPD Development Partnership Department DPOs Development Policy Operations DPs Displaced Persons E&S environmental and social EMP Environmental Management Plan ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plans FCDA Federal Capital Development Authority FMLHUD Federal Ministry of Lands, Housing and Urban Development FNHIS National Housing Fund FSI Floor Space Index GDP Gross Domestic Product GHS Generalized Household Survey GNP Gross National Product GRM Grievance Redress Mechanism HABISP Sistema de Informações para Habitação Social na Cidade de São Paulo, Information System for Social Housing in the City of São Paulo ICR Implementation Completion and Results Report IEG Independent Evaluation Group Lagos HOMS Lagos State Home Ownership Mortgage Scheme LAMATA Lagos Metropolitan Area Transport Authority LASEPA Lagos State Environmental Protection Agency LASPARK Lagos State Parks and Gardens Agency LASURA Lagos State Urban Renewal Authority LAWMA Lagos Waste Management Authority LCDA Local Council Development Area LGAs Local Government Areas iv LGSP Local Government Support Programme LMDGP Lagos Metropolitan Development and Governance Project LUA Land Use Act LUAC Land Use and Allocation Committee LUC Land Use Charge LUTP Lagos Urban Transport Project MDAs Ministries, Departments and Agencies MISN Macro-proyectos de Interés Social Nacional, National Macro-Projects of Social Interest Program MMRDA Mumbai Metropolitan Region Development Authority MOE Ministry of Environment MU Moderately Unsatisfactory MUTP Mumbai Urban Transport Project MVCT Ministry of Housing, Cities and Territory OP Operational Policy PAC Programa de Aceleração do Crescimento, Growth Acceleration Program PAPs Project Affected Persons PCR Property Code Rate PCU Project Coordinating Unit PFMU Project Financial Management Unit PLANHAB National Housing Plan PMIB Programa de Mejoramiento Integral de Barrios, Integral Neighborhood Upgrading Program PMO-RALG Prime Minister´s Office – Regional Administration and Local Government PPP Public-Private Partnership PSC Project Steering Committee PSIA Poverty and Social Impact Analysis PSU Project Support Unit PUI Integrated Urban Project RAP Resettlement Action Plan ROW Right of Way RPF Resettlement Policy Framework SERAC Social and Economic Rights Action Center SMP Social Management Plan SNHIS National Housing System TA Technical Assistance TC Technical Committee TDR Transfer of Development Rights UDP Urban Development Project VUUP Vietnam Urban Upgrading Project v Executive Summary As the largest country in Sub Saharan Africa with a projected population of 183.5 million in 2015, Nigeria is urbanizing at an average annual growth rate of 3.75 percent since 2010. If this trend continues, the share of Nigerians living in urban areas is expected to rise to 55 percent of the total population by 2020. While cities can play a key role in promoting inclusive growth by facilitating productivity as well as efficient service delivery for all citizens, the reality is that Nigerian cities are hindered by, and paying a high cost of, poorly managed urban agglomerations, with distorted land and housing markets contributing significantly to such negative outcomes. Critical shortfalls in the Land Use Act of 1978 – the main regulatory framework governing land tenure issues – include notably the limited recognition given to informal and squatter settlements. In addition, the vesting of approving authority over land matters in the hands of Governors creates bottlenecks in processing a large volume of land-related transactions. These issues, which are further compounded by outdated land information systems, inefficient titling and high transaction costs, have all contributed to exacerbating the distortions affecting urban land markets. All these factors have created uncertainties in urban land markets and consequently have unnecessarily raised the costs of formal development and compounded the housing deficit situation in the process. The result of dysfunctional urban land markets is that tens of millions of Nigerian urban residents are excluded from access to formal affordable housing and have as a result no other option but living in slums and squatter/informal settlements. In fact, formal housing supply (about 100,000 units per year) falls far short of demand (nearly one million units per year) in Nigeria with the deficit estimated to range between 20 million and 30 million in 2014. Affordability has been an issue as the formal housing market does not serve low-income households and public housing projects over the last 30 years –averaging 1,000 units per year - have barely made a dent. Not surprisingly, some 60-80 percent of urban Nigerians are estimated to live in slums and informal/squatter settlements where they suffer from limited access to services, unhealthy living environments and exclusion from economic opportunities that urban areas offer. Within this context, the Bank-financed Lagos Metropolitan Development and Governance Project (LMDGP) was an attempt to improve living conditions for slum dwellers in Lagos by enhancing their access to infrastructure and services. The project was implemented by Lagos State Government in the period between February 2007 and September 2013 and had a number of infrastructure sub-projects geared towards achieving this objective. The project triggered the Bank’s safeguards policies, including the Bank’s Operational Policy, OP 4.12 on Involuntary Resettlement, which provides for compensation for lost assets and restoration of incomes and living standards for people who have no recognizable legal right or claim to the land they occupy. Social safeguards compliance became a major challenge, especially in the Badia area of Lagos, which underwent two cases of land clearance and involuntary resettlement in 2012 and 2013 respectively. Although the latter, referred to as the Badia East case, was not part of the Bank-financed project nor was it implemented by the project entity (even if community development activities financed by the project benefited the Badia East community), a broad provision in the LMDGP financing agreement, which extended the application of the project’s resettlement instrument (prepared in accordance with the Bank’s Operational Policy on Involuntary Resettlement) to all city-wide upgrading activities regardless of their financing source, meant that the Badia East case was considered to fall under the remit of the project’s financing agreement and therefore needed to apply Bank safeguards policies. This led to the submission of a request for inspection by affected communities to the Inspection Panel. This report aims to extract lessons on slum upgrading and involuntary resettlement policies and practices learned from the process of addressing the Badia East case, which involved complex interactions between affected people, NGOs, the Bank and Lagos State Government. In doing so, this report will discuss the LMDGP as a complex and rich case study from which to extract lessons on involuntary resettlement, land, housing and slum upgrading, as well as overall urban development issues, although it is by no means meant to be an evaluation of the LMDGP project itself nor of process that followed the submission of a request for inspection to the Inspection Panel. Rather, it intends to provide an in-depth analysis of, and make recommendations on urban land and housing issues and the modalities of urban sector engagement in mega-cities like Lagos with vi inefficient land markets. The report was based on an extensive desk-review of relevant documents on urban issues in Nigeria and Lagos and on the LMDGP; interviews conducted in Lagos and Abuja during the period of January 18-31, 2015 with a range of stakeholders; and a series of case-studies on relevant international experiences in the areas of slum upgrading, involuntary resettlement, land and housing. The report examined the challenges associated with implementing retrospectively a resettlement action plan (RAP), which eventually compensated 2,296 displaced households in Badia East. This generated invaluable insights into the complex ways in which four key interlinked factors influence the process and outcomes of a project involving a potential/actual case of involuntary resettlement: (i) the policy and legal framework governing compulsory land acquisition and involuntary resettlement, (ii) political economy considerations, (iii) existing institutional arrangements, and (iv) implementation capacity. The relevant legal and policy framework in Nigeria, notably the Land Use Act of 1978, diverges from the Ba nk’s social safeguards policy in that it does not recognize squatters and informal settlers’ tenure, which means that they would not be entitled to compensation or assistance in the case of involuntary resettlement. There also proved to be little uniformity across agencies in Lagos State Government as far as involuntary resettlement practices are concerned. Given this, the full extent of the risks associated with i nvoluntary resettlement as a result of the LMDGP’s slum upgrading and other activities may not have been fully apparent at the beginning of the project, particularly in view of the complex political economic dynamics. On the Borrower side, political changes, although unforeseen, led to the weakening of the position of the State agency mandated to carry out slum upgrading and urban renewal, which affected the ability of the Government to carry out involuntary resettlement in a more inclusive way. On the Bank side, internal processes and procedures could have been strengthened in this particular case, which may have contributed to addressing issues such as the ex-ante preparation of the RAPs and the use of remedies to deal with the first Badia demolition as specified in the financing agreement. In addition, it is unclear whether the provisions of the Resettlement Policy Framework (RPF) and the implications entailed in the financing agreement regarding the application of the RPF on city- wide slum upgrading interventions were sufficiently explained to and/or well understood by the Borrower. The resettlement experience of the LMDGP points to three key lessons regarding the need for: (i) An integrated approach to slum upgrading and involuntary resettlement (especially avoiding that involuntary resettlement becomes an afterthought or an add on to the project); (ii) Better understanding of the complexity between the legal/policy framework, the institutional arrangement, the political economy and implementation capacity; and (iii) To the extent feasible, an upfront dialogue and treatment of involuntary resettlement issues, including negotiations about its avoidance, eligibility and compensation of project affected persons, resettlement and livelihoods restoration options, etc. The sooner such cases are addressed, even if at a modest scale, the earlier issues related to the legal and institutional framework, the political economy and/or implementation capacity will emerge, and thus can be addressed effectively. It is clear that, through the LMDGP, the Lagos State Government is committed to improve living conditions for slum dwellers but such improvement programs are focused on services and infrastructure improvements and do not necessarily translate into secure land and property rights due to slum dwellers’ ‘illegal’ tenure status. The different views that emerged on the entitlements of slum dwellers between the Government and the Bank’s positions arguably calls for an upfront dialogue on involuntary resettlement in the context of project implementation and more importantly for a more integrated approach encompassing a proactive land and housing policy that can address the root causes of slum formation. Within an inadequate and inefficient regulatory and institutional environment, which requires a long-term engagement for improvement, the importance of identifying political as well as operational champions is critical for yielding tangible results that can trigger a positive cycle of strengthening institutions and enhancing capacities. Building on these lessons, the report recommends three main areas for improvement and potential urban sector engagement in Nigeria, which are supported and illustrated by relevant international experiences. vii (i) Reforming land regulations and administration/management systems and procedures, based on coherent policies; (ii) Packaging involuntary resettlement as an integral part of slum upgrading, housing and land issues, and broader urban sector engagement; and (iii) Promoting comprehensive and integrated urban planning approaches. Diverse international experience underlines the importance of strengthening the regulatory framework for integrated urban development encompassing land management, housing provision and service delivery, as well as land tenure regularization for squatters/informal settlers, which further contributes to address the challenges faced by slums including involuntary resettlement more fundamentally. In this regard, reforming key legislations such as the Land Use Act as well as modernizing land administration systems with effective information management and incentives to register land and property and maintain the records up-to-date are priorities for enhancing the efficiency of land institutions in Nigeria. In particular, reviewing the way land tenure is addressed in innovative approaches to tenure regularization (as illustrated by many successful cases) is essential for realizing the true value of unregistered land, promoting formal development and increasing sense of security as well as investment in properties. While tenure regularization can strengthen the existing slum upgrading initiatives, a more inclusive approach is needed to protect slum dwellers in case of involuntary resettlement. The LMDGP experience provided a rich learning experience, which can translate into systematic institutional capacity building. A strategic plan for regional and territorial development, coupled with a comprehensive and integrated master plan for urban areas, will jointly create the necessary enabling environment for urban sector engagement. A building block for these is consolidation of regional and city-wide databases, followed by better coordination between local, state and federal governments across jurisdictions, as well as within-city cross-sector collaboration. While such cross-sector, cross-jurisdiction collaboration for urban planning and implementation is not obvious, the rewards from such an integrated and coherent planning process are undoubtedly worth the effort. viii Part I. Overview 1. Objective of the study This study aims to extract lessons learned from the Lagos Metropolitan Development and Governance Project (LMDGP) in a systematic manner with a focus on slum upgrading and involuntary resettlement policies and practices, provide in-depth analysis of the modalities of urban housing and land sector engagements in a mega-city like Lagos with inefficient land markets, and make recommendations towards the structure and manner of engagement in such settings. 1.1 Background: LMDGP and its involuntary resettlement experiences The Bank provided financial and technical assistance to the Lagos State Government for implementing the LMDGP. The objective of the project was to increase sustainable access to basic urban services through investments in critical infrastructure.1 The project became effective in February 2007 with the total amount of US$ 200 million signed for IDA financing (which became US$ 213.19 by the exchange rate as of March 27, 2014). The actual disbursement at project closing was US$ 139.12 million, with US$ 43 million cancelled as per the Government request and US$ 31.07 million undisbursed (World Bank, 2014a: 7). Originally, the LMDGP consisted of three components: (i) Infrastructure; (ii) Public Governance and Capacity Building; and (iii) Urban Policy and Project Coordination (see Annex I for further details). The project was restructured in July 2011 to revise the scope of activities under project components. Notably, the Drainage sub-component was downscaled and the Waste Management sub-component was dropped as related activities were taken up by the Lagos State Government with its own financing. Consequently, the Upgrading sub-component became the main focus of the LMDGP, with an increase of credit from US$ 40.2 to US$ 138.43 through the reallocation of funds. The project closed on September 30, 2013 as scheduled. The LMDGP encountered a number of challenges related to social safeguards compliance. In particular, the Badia area of Lagos became a focal point of concern as it underwent two cases of demolition of houses and involuntary resettlement, one in 2012 and the other in 2013, although the latter demolition was neither on the project site nor by the project entity. The process following the demolition in 2013 involved complex interactions between affected people and community representatives, NGOs, the Bank (task team and management) and the Lagos State Government. The Inspection Panel, which applied a Pilot Approach to Support Early Solutions for Request for Inspection (or the Pilot) after receiving a Request for Inspection from affected people in the Badia East community, reiterated the recommendation in the Implementation Completion and Results Report (ICR) that “a stand-alone study should be conducted, primarily to inform and contribute to improving the Bank’s operation in complex urban environments and engagement with sensitive issues such as involuntary resettlement