A recent report titled “Re-invigorating Nigeria’s Economic Potential with Dead Capital” has shed light on the significant untapped economic potential in Nigeria due to underutilized land and dormant assets.
According to the report, the African Development Bank estimates that 64% of land in Nigeria is owned by the state, with only 36% in private hands. Shockingly, less than 10% of this land is titled, compared to 44% in Namibia and 72% in South Africa.
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The report emphasizes the urgent need for a collaborative approach involving the government, communities, and stakeholders at all levels to implement land reforms that could unlock this “dead capital.” It suggests that a hypothetical 25% increase in titled land could potentially significantly boost Nigeria’s GDP.
This could be achieved by enhancing agricultural productivity, attracting investments, and fostering economic development.
The report also highlights the vast amount of idle assets across the nation, estimating that trillions of naira are lying dormant, which is a significant drain on the country’s economic potential. For instance, a 2022 report by the Nigeria Institute of Quantity Surveyors revealed that Nigeria has over 56,000 abandoned projects across various states and at the federal level. Additionally, Nigeria has more than 300 real estate properties worldwide, many of which are either abandoned or underutilized.
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The report advocates for the establishment of the Ministry of Finance Incorporated, which would oversee all national assets, create an asset register, and ensure profitable management of these assets. It also calls for comprehensive land reform, urging the government to view land as a critical factor of production. This includes easing the process of land titling and registration, raising public awareness about formal land ownership, and leveraging technology for better land administration.
Furthermore, the report recommends enhancing the capacity of institutions responsible for land governance and facilitating access to financial resources by using formalized land as collateral. It also suggests developing microfinance and alternative lending models that could utilize informal assets as collateral, thereby unlocking further economic potential.
The report concludes by stressing that implementing these recommendations could lead to increased real estate development, construction, and infrastructural projects, ultimately boosting economic activity and development in Nigeria.
