The purpose of this paper is to examine the potential of tax increment financing (TIF) as a viable financial mechanism for urban regeneration programmes in Nigeria. This…
The purpose of this paper is to examine the potential of tax increment financing (TIF) as a viable financial mechanism for urban regeneration programmes in Nigeria. This is with a view to engendering a sustainable, productive and competitive urban land market towards enhancing the economic development of the country.
This paper adopts a desk-based study approach and review of secondary literature on urban regeneration and TIF to examine the usefulness of TIF for funding local infrastructure development. It then examines the key requirements for the successful application of TIF as a financial instrument for urban regeneration in an emergent economy like Nigeria.
A number of key requirements for a successful TIF programme particularly in the context of an emergent economy are identified. These are: a functional urban land market with well-developed and documented market indices on performance measurement to serve as reliable benchmarks for investors; an established land use planning system consisting of clear rules and effective decision-making processes; an active capital market that is accessible to institutional and private developers; a viable tax administration system and most importantly an efficient institutional framework with clearly defined formal property rights and sound enforcement mechanisms to monitor contractual agreements and to police deviations.
This paper represents a pioneering attempt at examining the prospects of the application of TIF to urban regeneration in the specific context of an emergent Sub-Saharan African country.