• Wednesday, April 24, 2024
businessday logo

BusinessDay

Can Nigeria’s economy be liberated?

Economic crisis: Triple blow for Nigerian families

Nigeria’s economic potential is undeniable. However, a vast amount of wealth remains trapped within “dead capital” – underutilised assets like idle infrastructure, machinery, and land. This paradox of a nation brimming with potential yet burdened by untapped resources holds back sustainable growth.

One glaring example lies in real estate. A staggering $1 trillion worth of property sits dormant, held informally and unable to contribute fully to the economy. Imagine this – a trillion dollars in houses and land, unproductive and untapped. Unlocking this potential could be the economic shot in the arm Nigeria needs.

“The challenge of dead capital is significant, but initiatives like the MOFI Committee show a commitment to unlocking these resources.”

The concept of dead capital, coined by Peruvian economist Hernando de Soto, refers to assets with economic value hindered by legal or bureaucratic barriers. Land and homes lacking formal recognition are prime examples. Without proper documentation, these assets cannot be used as collateral for loans or sold on the open market. This not only hinders individuals but also creates a drag on the entire economy.

The challenge of dead capital is particularly acute in developing economies like Nigeria, where a large portion of the population holds assets informally. This limits access to capital, hindering entrepreneurship, infrastructure investment, and poverty alleviation initiatives.

But there’s hope! Unlocking dead capital offers transformative rewards. Imagine legal and bureaucratic roadblocks cleared, infusing these dormant assets with life. Their true value can be activated, attracting investment and making credit more readily available. This surge of economic activity would ripple throughout Nigeria, invigorating every corner of the nation.

The potential is particularly staggering for Nigeria. Nearly $1 trillion worth of wealth sits idle, particularly in residential real estate and fertile agricultural land. Imagine this underutilised land blossoming into vibrant communities and productive farms. By unlocking dead capital, Nigeria can rewrite its economic story, transforming these once-dormant assets into the fuel for a brighter future.

A multifaceted approach is key. Comprehensive land titling and registration systems are crucial to formalise property rights. Strengthening legal frameworks related to land ownership and raising public awareness about the benefits of formal land ownership are also essential.

Technology can play a vital role. Digital mapping and blockchain can enhance transparency and efficiency in land administration processes. Facilitating access to finance by using formalised land as collateral can encourage investment and entrepreneurship. Public-private partnerships can leverage expertise and resources to accelerate land titling initiatives.

Community engagement and capacity building are also crucial. By involving local communities in decision-making processes and enhancing the capacity of land administration institutions, sustainable solutions can be achieved.

Nigeria’s economic future is bright, but hidden reserves of potential remain untapped. The challenge of dead capital is significant, but initiatives like the MOFI Committee show a commitment to unlocking these resources.

Imagine the impact: a revitalised land market, empowered entrepreneurs, and a surging national economy. By implementing these strategies thoughtfully and tailoring them to regional needs, Nigeria can transform its dormant assets into powerful engines of growth. This is not just about economic numbers; it is about unlocking opportunities for all Nigerians and building a more inclusive, prosperous future.

In essence, the key lies in collaboration – government, communities, and the private sector working together. With a shared vision and unwavering commitment, Nigeria can turn its dead capital into a vibrant force for economic good.