Unlocking dead capital in Nigeria

PwC estimates that Nigeria could potentially unlock between $300 to $900 billion in dead capital from residential real estate and agricultural land. Andrew Nevin, Partner and Chief Economist at PwC Nigeria, sat down with CNBC Africa to delve into the ways in which this dead capital can be unlocked to spur economic growth and alleviate poverty in the country. Nevin highlighted the significant impact that the real estate sector has on the economy, emphasizing that if the sector does not function effectively, it poses a major hindrance to achieving sustainable economic growth. With a housing deficit of 17 million units in Nigeria, the potential for growth in building materials, trade jobs, vocational training, and economic stimulation is immense if efforts are made to address the dead capital issue. Nevin emphasized that without unlocking this dead capital, the country will continue to struggle in reducing poverty and achieving substantial economic progress. He pointed out that the key to unlocking dead capital lies in streamlining the land titling process and transitioning the informal economy into the formal sector. Nevin advocated for the use of blockchain technology in digitizing land records to enhance transparency and efficiency in land transactions. Drawing parallels with Rwanda's successful digitization of land records, he underscored the importance of adopting modern technologies to drive progress in Nigeria's real estate sector. Nevin also addressed the challenges of bringing the informal economy into the formal sector, citing high costs associated with construction permits and land transfers as deterrents for businesses to operate in the formal economy. He emphasized the need to simplify processes and make it more advantageous for businesses to transition voluntarily into the formal economy. Nevin stressed the significance of clarity in land ownership and called for land reforms to provide certainty and enable economic growth. He cited the positive impact of clear land titles on women's empowerment and income generation, noting that improved land ownership rights have the potential to uplift small-scale farmers and drive economic development at the grassroots level.