Nigeria’s real estate sector holds immense potential for economic growth, yet it remains largely untapped due to the country’s overreliance on oil.
To achieve sustainable development, Nigeria must explore the vast opportunities in real estate, including property transactions, land-based taxes, construction, and more. This strategic shift could create jobs, generate revenue, and drive economic growth.
Transactional Income:
Nigeria can generate immediate revenue by monetizing surplus government land. Properties such as national stadiums and underutilized military barracks can be strategically sold, turning unused assets into valuable income streams.
Land-Based Taxes:
A well-structured system of land-based taxes, including land value tax, road tax, and tenement rates, can provide a steady income stream for government authorities. This, however, will require the implementation of efficient collection mechanisms and strict measures to combat corruption.
Job Creation:
One of Nigeria’s largest employers, the construction sector could see significant growth through real estate development. With a housing deficit of over 17 million units, addressing this shortage would create numerous job opportunities across various construction trades, from building to infrastructure development.
Collateral and Securitisation:
Real estate can serve as valuable collateral for loans, facilitating increased investment and business activity. Additionally, land registries can be used for securitisation, attracting further investments and boosting confidence in the real estate market.
Wealth Creation:
Developing industrial parks and commercial estates can create wealth for both the government and private investors. Effective land management practices will stimulate economic activity and increase national income.
To unlock the full potential of Nigeria’s real estate sector, several challenges need to be addressed:
Land Registration:
Currently, less than 3% of land in Nigeria is properly registered, hindering efficient real estate transactions. Streamlining the land registration process and ensuring transparency is critical to making the sector more accessible and efficient.
Multiple Taxation:
Overlapping and inconsistent taxes discourage investment in the real estate sector. A clear and unified tax system is essential to promote growth and attract investors.
Capacity Building:
Local governments often lack the necessary expertise and resources for effective land management and tax collection. Capacity building initiatives for government agencies are crucial to enhancing their performance.
Corruption:
Corruption undermines tax collection and discourages investment. Strong anti-corruption measures must be put in place to create a fair and transparent business environment.
For Nigeria to fully harness the potential of its real estate sector, the following measures are necessary:
Policy Reform:
A comprehensive review of land use and taxation policies is required to streamline processes, eliminate redundancies, and incentivise investment in the real estate sector.
Infrastructure Development:
Investing in essential infrastructure, such as roads and utilities, will make undeveloped land more attractive to investors, thereby boosting real estate activities across the country.
Technology Adoption:
The use of technology in land registration, tax administration, and property management can improve efficiency and transparency, reducing the chances of fraud and mismanagement.
Public-Private Partnerships (PPPs):
Collaboration between the government and private sector can leverage expertise and resources for large-scale real estate development projects, further driving economic growth.
By focusing on good governance, clear policies, and strategic investment, Nigeria can transform its real estate sector into a powerful engine for national development, unlocking the pathway to sustainable economic growth and improved living standards for its citizens.