In a groundbreaking revelation, PricewaterhouseCoopers Nigeria has unveiled an astonishing estimate that Nigeria is harboring a colossal $900 billion in dead capital, ensnared within residential real estate and agricultural land.
This revelation emerges from their comprehensive report titled ‘Nigeria Economic Outlook: Seven Trends that Will Shape the Nigerian Economy in 2024.’
The report not only sheds light on the sheer magnitude of dead capital but also underscores the Federal Government’s significant contribution to this dormant wealth, with abandoned properties alone estimated at a staggering N230 billion.
Nigeria is grappling with a housing deficit of monumental proportions, standing at 28 million units, as the population hurtles towards an anticipated 223.8 million this year.
Despite this pressing need for housing solutions, demand remains suppressed, shackled by exorbitant rental and construction costs coupled with a decline in disposable incomes.
“PwC estimates that Nigeria holds as much as $900 billion worth of dead capital locked up in residential real estate and agricultural land, including Federal Government’s abandoned properties estimated at N230 billion,” the report states, highlighting the enormity of the issue.
Dead capital, a term referring to assets or property unable to be easily converted into productive use, is particularly rampant in Nigeria due to the prevalence of undocumented or informally titled land.
This creates a formidable challenge for property owners, hindering them from proving ownership and fully leveraging the value of their assets.
The lack of proper documentation not only obstructs property owners but also acts as a barrier to accessing credit and investment opportunities in the real estate market.
Coupled with bureaucratic procedures, corruption, and inefficient legal frameworks, these factors contribute to the persistent existence of dead capital in Nigeria’s real estate sector.
Recognizing the urgency of addressing this issue, the Federal Government announced plans last October to unlock over $300 billion, as per an earlier estimate, of dead capital within the housing sector.
These plans involve a comprehensive series of reforms and collaborations with stakeholders, aiming to enhance investment and finance opportunities for sustainable real estate projects while tackling the country’s housing deficit head-on.
Minister of Housing and Urban Development, Ahmed Dangiwa, detailed the government’s commitment during the Capacity Development Conference for Developers in Abuja.
He outlined strategic plans to amend the Land Use Act to streamline land administration and implement reforms in key agencies like the Federal Mortgage Bank of Nigeria and the Federal Housing Authority.
“In alignment with the vision of President Bola Ahmed Tinubu, we are dedicated to creating a conducive environment for increased private sector investment in housing.
Our objective is to break all institutional, legal, and bureaucratic barriers that have hindered sector growth,” affirmed Minister Dangiwa, emphasizing the government’s determination to unlock the full economic potential embedded in Nigeria’s real estate assets.
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