PwC: Nigeria has $900 Billion Dead Capital

PWC Nigeria has reported that Nigeria holds as much as $900 billion worth of dead capital locked up in residential real estate and agricultural land. It further added that of the estimated figure, the federal government’s abandoned properties account for N230 billion.

Dead capital refers to  unregistered real property, and is considered lost value because the landholder is unable to transfer or leverage the  property to borrow or access capital.

The organisation disclosed this at executive roundtable on the Finance Act 2020 and Economic Outlook for 2021 suggesting ten priority areas for policy makers and businesses necessary to accelerate the country’s economic growth.

These 10 priorities are: unlocking Nigeria’s vast dead assets to stimulate growth; harnessing the power of the diaspora; driving export growth through services; the need for growth to be spread across the country, and not just in a few urban centres; improving on the country’s low investment and gross capital formation; moving its thriving informal sector to the formal sector; improving on the business environment, and ease of doing business; addressing Nigeria’s big three distortions (exchange rate, power, and subsidies); shifting focus from the Gross Domestic Product (GDP) lens to sustainable development goals and finally, prioritising climate change.

Partner and Chief Economist, PwC Nigeria, Andrew Nevin disclosed that finding the political will to act and unlock Nigeria’s dead real estate assets will have a transformative impact on the lives of Nigerians.

He said: “Out of the 10 themes, another important theme to consider is Nigeria’s gross fixed capital formation, which in 2019, stood at less than 20 percent. And PwC estimates that Nigeria would need an investment rate of at least 26 percent to 28 percent of GDP to achieve seven percent growth.

“Nigeria’s economy is distorted by the exchange rate; fuel subsidy regime; and the power sector. Addressing these three big distortions will be taking the giant step to restructure the country’s economy holistically; achieve the seven percent GDP growth, and improve the lives of the average Nigerian.”

Kehinde Ogunyale

Reporting on the data-driven economy, and investigations.

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