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$900bn dead capital locked up in real estate — PwC

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PricewaterhouseCoopers Nigeria has said that it estimates that Nigeria holds as much as $900bn worth of dead capital locked up in residential real estate and agricultural land.

The multinational professional services network stated this in a new report titled ‘Nigeria Economic Outlook: Seven trends that will shape  the Nigerian economy in 2024.

It noted that the dead capital in the country included the Federal Government’s abandoned property estimated at N230bn.

According to the report, Nigeria’s housing deficit is estimated at 28 million units while the population is expected to reach 223.8 million this year.

Despite the huge housing deficit, it noted that demand for housing remained depressed due to high rental and construction costs and declining disposable incomes.

It read in part, “PwC estimates that Nigeria holds as much as $900bn worth of dead capital locked up in residential real estate and agricultural land, including Federal Government’s abandoned properties estimated at N230bn.”

Dead capital refers to assets or property that cannot be easily converted into productive use, often due to legal or institutional barriers.

In Nigeria, many property have undocumented or informal land titles, making it difficult for owners to prove their ownership and fully utilise the value of their assets.

This lack of proper documentation hinders access to credit and investment opportunities in the real estate market.

Additionally, bureaucratic procedures, corruption, and inefficient legal frameworks contribute to the existence of dead capital in Nigeria’s real estate sector.

Those factors make it challenging for property owners to navigate the system and unlock the full economic potential of their assets.

Last October, the Federal Government revealed its plans to unlock over $300bn (earlier estimate) ‘dead’ capital in the housing sector through a series of reforms and collaborations with stakeholders.

The government described the move as part of efforts to enhance investment and finance opportunities for sustainable real estate projects and address the country’s housing deficit.

The announcement was made by the Minister of Housing and Urban Development, Ahmed Dangiwa, during the Capacity Development Conference for Developers in Abuja.

He outlined plans to amend the Land Use Act to streamline land administration, as well as reforms to key agencies like the Federal Mortgage Bank of Nigeria and the Federal Housing Authority.

The Minister said, “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.”

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