Feature/OPED
Looking at the Savannah Bank vs Ajilo Legal Battle
By Benita Ayo
- The Facts of the Case
A deed of Mortgage was executed between Savannah Bank and Ajilo and upon default, Savannah Bank sought to sell the property involved in the mortgage by advertising the auction sale. When Ajilo became aware of the purported sale, he went to the High Court of Lagos to sue for declaration that the Deed of Mortgage was void and also that the Auction Notice was also void.
The major grounds upon which the action was brought were that, by section 22 of the Land Use Act, 1978, the consent of the Governor of Lagos State ought to be first sought and obtained and as no consent was sought and obtained, both the Deed of Mortgage and the Auction Notice were void.
The trial Court held that failure to obtain the required consent of the Governor under S. 22 of the Act has rendered the Deed of Mortgage null and void and the mortgage transaction is illegal.
Upon an appeal at the Court of Appeal by Savannah Bank, the Court held that every right holder whether under S. 34 or S. 36 of the Land Use Act requires the consent of the Governor before he can transfer, mortgage or otherwise dispose of his interest in the Right of Occupancy. The Appeal was thus dismissed.
On further Appeal at the Supreme Court, the above position was affirmed with the Appeal dismissed.
- COMMENTS
2.2 PRINCIPLE
The general principle of law in respect of alienation of interest in property was actually derived from the provisions of Section 22 Land Use Act, 1978 which provides that;
“It shall not be lawful for a holder of statutory Right of Occupancy granted by the Governor to alienate his Right of Occupancy or any part thereof by Assignment, Mortgage, Transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained”.
The above provision was later on interpreted in the case of Savannah Bank v. Ajilo which became the locus classicus for the legal principle that “Where a holder desires to alienate his interest in a Certificate of Occupancy, he must first obtain the Governor’s consent to make such transfer valid according to S. 22 of the Land Use Act….”
- APPLICATION OF THE PRINCIPLE ON VARIOUS CASES
The principal statute regulating land tenure system in Nigeria being the Land Use Act conferred the ownership of Land in the Federation on the Governor of each State.
The implication of this is that Freehold title to land becomes abolished with the State Government holding all Land in the State in trust for the citizens. Thus, anyone seeking to acquire interest in any landed property or seeking to alienate same by way of Assignment, Lease or Mortgage must do so after seeking and obtaining the consent of the State Governor. See S. 22 Land Use Act.
The principle has been applied by the courts in a plethora of cases some of which will be briefly discussed below.
- IMPLICATION FOR NON-COMPLIANCE
Failure to seek and obtain the requisite consent renders such transaction invalid. This was the butt of the matter in the instant case of Savannah Bank v. Ajilo which facts of the case as well as the final judicial pronouncements were stated above.
As stated earlier on, the Courts have applied the principle in the Ajilo’s case in some cases such as HARUNA v. YARO (2016) LPELR-41554 (CA) where the Court held that;
“On the issue of Governor’s consent, it is correct that the combined effect of Sections 22 and 26 of the Land Use Act is to render null and void any alienation or transfer of a Right of Occupancy or interest or right there under without the consent of the Governor first had and obtained”.
In yet another case of SIMM COMPUTER RESOURCES LTD & ANOR v. FIRST INLAND BANK (2016) LPELR-40493 (CA) the Court decided that,
“The alienation of a right in a Certificate of Occupancy under the Land Use Act is clearly covered by Section 22 of the Act. it provides as follows:
“It shall not be lawful for the holder of a statutory Right of Occupancy granted by the Governor to alienate his Right of Occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise without the consent of the Governor first had and obtained.”
Another relevant provision is Section 26 of the Land Use Act which says:
“Any transaction or any instrument which purports to confer on or rest in any person any interest or right over land other than in accordance with the provision of this Act shall be null and void.”
These provisions are clear and straight forward and therefore ought to be given their literal interpretation or meaning. The Section has received judicial attention in a plethora of cases and the locus classicus is the case of SAVANNAH BANK OF NIGERIA LTD v. AMMEL. O. AJILO (1989) 1 NWLR (pt. 97) 254 wherein the Court held that where a holder desires to alienate his interest in a Certificate of Occupancy, he must first obtain the Governor’s consent to make such transfer valid according to Section 22 of the Land Use Act. …………. The Supreme Court in the case of I.T.I. v. ADEREMI (1999) 6 SCNJ 1 held that there are two stages to alienation of interest in Land and they are;
- The holder may enter into a contract of sale of his right, at that stage he does not need the Governor’s consent.
- The second stage is that of alienating the right that is the stage when he assigns his right by a deed of assignment, to now vest the legal estate in the purchaser, and he needs the Governor’s consent to make the transaction valid.”
- EXCEPTIONS OR CURRENT LEGAL POSITION IN VIEW OF SAVANNAH BANK v. AJILO
It is viewed from a different standpoint that the legal stance in Savannah Bank v. Ajilo rather promotes sharp practices such as a party benefitting from his own wrong.
This was exactly the situation in Savannah Bank v. Ajilo where the Defendant in this case sought to prevent the Plaintiff from selling off the mortgaged property in an auction sale by invoking the provisions of Section 22 Land Use Act, 1978.
While still conceding the fact that where a person in alienating his interest in property must seek the consent of the State Governor in order for such alienation to be valid, the failure to obtain the said consent before executing the Deed of Conveyance does not in itself invalidate the transaction. It only makes the transaction inchoate or incomplete.
See for instance the case of HARUNA v. BANK OF AGRICULTURE LTD & ORS (2016) LPELR-40467 (CA) where the Court concluded that,
“The Courts have held that there is nothing in the Land Use Act preventing the execution of an instrument before the consent of the Governor is obtained. It simply means that the agreement entered into is inchoate (Incomplete) until the Governor’s consent is sought and obtained.”
Also in YARO v. AREWA CONSTRUCTION LTD & ORS (2007) LPELR-3516 (SC), it was held that;
“The 3rd Respondent has raised the question of Section 22 of Land Use Act, concisely, the section requires that Governor’s consent to the mortgage deal has to be first had and obtained otherwise the contract is void. I think with respect that the 3rd Respondent’s objection is lame in that as decided in Awojugbagbe v. Chinukwe & Anor (Supra), it is after the mortgage has been executed that obtaining of the Governor’s consent falls due. It is normally after the parties have agreed that the Deed of Assignment is prepared and sent for Governor’s consent. The instant mortgage therefore has not fallen foul of Section 22 of the Land Use Decree.”
In practice, whenever interest in property is transferred from the owner to a buyer, the relevant Deed of Conveyance is prepared and executed between the parties prior to obtaining the consent of the State Governor. The courts have held that this procedure does not invalidate the transaction but rather, no interest has yet passed to the buyer.
See the case of AWOJUGBAGBE LIGHT INDUSTRIES LTD v. CHINUKWE & ANOR (1995) LPLER-650 (SC) for instance where the Supreme Court held that;
“A close study of Section 22(2) of the Land Use Act clearly confirms that it does recognise cases where some form of written agreement or instrument executed in evidence of the relevant transaction is submitted to the Governor in order that the necessary consent under Section 22(1) may be signified by endorsement thereon. This being so, I do not conceive that it can be argued with any degree of seriousness that there is anything unlawful in the entering into or execution of Exhibit E before the Governor’s consent was obtained as this procedure is expressly covered by Section 22 (2) of the Land Use Act. The legal consequence that arises in such a situation is that no interest in land passes under the agreement until the necessary consent is obtained. Such an agreement so executed becomes inchoate until the consent of the governor is obtained after which it can be said to be complete and fully effective. I am therefore of the firm view that Section 22 (1) of the Land Use Act prohibits the alienation of a Right of Occupancy without the consent of the governor first had and obtained but does not prohibit agreement to alienate or in respect of terms and conditions for the purpose of effecting such alienation if and when the Governor gives his consent to the transaction in issue.”
CONCLUSION
Finally, it has been discussed that a party seeking to alienate his interest in property whether in part or in whole as is the cases with Assignment, Leases or Mortgage, must first seek and obtain the consent of the State Governor. This does not however mean that he cannot execute a document evidencing the transaction as could be gleaned from the aforementioned authorities. See HARUNA v. BANK OF AGRICULTURE LTD & ORS (SUPRA).
However, what this implies is that notwithstanding the execution of a document of conveyance, the transfer is incomplete until the requisite consent is sought and had and this is usually in practice done by endorsement in the column for it within the document of conveyance.
Finally, the implication of a party’s failure to seek and obtain the Governor’s consent in property transactions according to the aforementioned case of HARUNA (SUPRA) is that the transaction is incomplete rather than null and void as was the case in Savannah Bank v. Ajilo. It is only where the transaction has been perfected (Consent sought and obtained) will the transaction be complete.
Benita Ayo is a legal practitioner based in Lagos and be contacted on WhatsApp: 08063775768 or email: [email protected].
By Luke Kyohere
The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:
1. The rise of real-time payments
Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this.
2. Cashless payments will increase
In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions.
3. Digital currency will hit mainstream
In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain.
The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability.
4. Increased government oversight
As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.
5. Business leaders buy into AI technology
In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk.
6. Continued AI Adoption in Payments
In payments, the proliferation of AI will continue to improve user experience and increase security. To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent.
When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.
7. Rise of Super Apps
To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills.
8. Business strategy shift
Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble.
As the payments space evolves, businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.
Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq
In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.
In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.
“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”
The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.
Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.
The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”
The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.
As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.
In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.
“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.
By Kenechukwu Aguolu
The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.
One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.
A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.
In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.
The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.
The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.
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