It estimated that the high value real estate market segment holds between $230 billion and $750 billion of value, while the middle market carries between $60 billion and $170 billion in value.
In 2001, Hernando de Soto coined the term ‘dead capital’ to describe assets that cannot be converted to economic capital. Capital is any resource that can be used to increase productivity and generate wealth in the economy.
On its part, PwC in the report, pointed out that there many forms of dead capital, but stated that its report was focusdd on real estate.
“At least $300 billion or as much as $800 billion worth of dead capital in residential real estate and agricultural land alone across Nigeria,” it stated.
“Lack of access to finance is a major contributor to persistent poverty. Research has long shown a positive relationship between financial development and poverty reduction. Individuals and businesses benefit from a range of financial services such as saving, loans and insurance products that allow them to mitigate financial risks and access capital for value-creating endeavors.
“Ideally, a standard description of assets lowers the costs of economic transactions, as it provides security for parties involved by making transactions legitimate and legally binding. However, a lack of description makes transaction costs too high to be economically beneficial for both parties. The poor are therefore unable to leverage their assets and possessions for economic gain,” it added.
Nigeria is the largest economy in Africa with a GDP of $US 530 billion, a long term average growth rate of 3.5 per cent and was expected to grow 2.3 per cent in 2019.
Oil revenue contribute more than two-thirds of the nation’s revenue and constitutes nine per cent of the GDP. The informal economy accounts for 65 per cent of GDP which is amongst the highest in the world.
It noted that land tenure system in Nigeria was still largely in the communal and informal sectors. Sporadic efforts by the government on formalisation of property rights through certificate of occupancy in cities like Lagos were yet to meet the intended goal, the report pointed out.
“The Act has failed to establish a uniform land tenure system that govern ownership in the country. More so, most citizens, especially in the rural areas where land is not scarce, do not comply with legal provisions of the Act and have no certificates on their land. Issues around proper land registration and omo’nile also makes it difficult to ascertain proper land ownership. About 97% of land in Lagos is unregistered. This makes it difficult for banks to validate claims to land or for land occupants to use their land to create wealth.
“This restricted ownership and unregistered land creates dead capital as people cannot easily leverage their assets to create wealth. The country needs to invest in establishing proper and seamless land administration and implement policies that will improve land accessibility,” it stated.