How real estate can contribute to Nigeria’s N1trn economy

Nigeria’s dream of a N1 trillion economy is ambitious, and real estate plays a crucial role in achieving this goal. Over the years, the sector’s contribution to the country’s GDP has been significant, and its growth if well harnessed can have a ripple effect on the entire economy.

However, the real estate sector in Nigeria is facing challenges, including inflation, which has led to a significant increase in construction costs. The depreciation of the Naira has also affected the sector, making it difficult for developers to complete projects on time and within budget.

Inflation has a direct impact on the real estate sector, as it increases the cost of building materials, labour, and other expenses. This, in turn, affects the affordability of housing and commercial properties, making it difficult for people to purchase or rent properties.

Despite the challenges, the real estate sector has the potential to contribute significantly to Nigeria’s economy. The sector can create jobs, stimulate economic growth, and increase government revenue through taxes and other fees.

According to the National Bureau of Statistics (NBS), Nigeria’s Gross Domestic Product (GDP) grew by 3.19 percent (year-on-year) in real terms in Q2 2024, from 2.98 percent in Q1 2024 and 2.51 percent in the same period last year

According to the NBS report, the real estate sector contributed 5.17 percent to real GDP in Q2 2024, lower than the 5.29 percent it recorded in the corresponding quarter of 2023. It was also lower than the 5.20 percent recorded in the first quarter of 2024.

However, industry players are of the views that the sector can propel the country’s dream of a N1 trillion economy. “I believe strongly that if we want to get the Nigerian economy back on track, create jobs, boost the economy, just like you see in UAE, just like you see in America with over 3 trillion real estate industry, we can turn the Nigerian economy around just with the real estate sector,” said Stephen Akintayo, chairman, Gtext Holdings.

Akintayo made this known during the recent Global Property Conference held in Lagos, where he disclosed that Nigeria’s dream of a N1 trillion economy can be unlocked through the real estate sector.

He said further that the conference was organised to discuss and address some of the challenges clogging the real estate sector in Nigeria. “From legal to police issues, to of course, government policies. We felt we needed to bring all the stakeholders together. It was good for investors, for practitioners to listen to them and also raise their concerns.”

He said that some of the resolutions reached at the conference are capable of solving identified challenges if properly implemented by the government and industry players. “But the bottleneck has to be removed. And what we discussed today are the right solutions that can really solve those problems.”

According to stakeholders, the government needs to implement policies that support the growth of the real estate sector to achieve a N1 trillion economy. This includes providing incentives for developers, improving infrastructure, and creating a conducive business environment.

Femi Falana, a Senior Advocate of Nigeria (SAN), said no country can develop very seriously without land documentation. According to him, the Nigerian environment is hostile to real estate development.

He said further that development of properties across the world is a lucrative business; however, Nigerians need to get it right. According to him, the Land Use Art has failed, hence the need for work to reform the sector for growth.

Read also: Experts see growth path for real estate sector in partnerships, incentives

Citing the Lagos example, Falana said about 94 percent of properties in Lagos state are not registered. “And that is very sad for the country. You can imagine, with all the enlightenment in Lagos, and with all the efforts of the government, that about 94 percent of properties are not registered.”

Accordingly, stakeholders opined that Nigeria’s dream of a N1 trillion economy is achievable, but it requires careful planning and implementation. The real estate sector has a crucial role to play in achieving this goal, and the government needs to provide support and incentives to stimulate growth in the sector. By working together, Nigeria can achieve its economic goals and become a prosperous nation.

Babajide Sanwo-Olu, Lagos State governor, said that the state government is dedicated to transforming Lagos into a smart city where technology and sustainable urban planning converge. “We have initiated projects to improve housing affordability and infrastructure, partnering with private investors to develop housing projects that meet diverse income levels.”

Sanwo-Olu, who was represented by Barakat Odunuga-Bakare, Special Adviser to Lagos State Governor on Housing, also represented by Tope Akinbola, director, monitoring and compliance department, Lagos State Real Estate Regulatory Authority (LASRERA), said that the current administration in the state is working to ensure that every Lagosian has access to safe, secure, and affordable housing as part of its larger vision.

According to Sanwo-Olu, the conference represents a unique opportunity to explore the transformative potential of real estate as a catalyst for prosperity, economic growth, and legacy-building.

The governor also called for industry collaboration to bridge the state’s housing deficit. “Together, let us build not only personal wealth but also a legacy of impactful investments that uplift communities and help close the housing deficit in Lagos.”

According to him, the conference offers a platform to bridge knowledge gaps, equipping participants with the tools needed to navigate property markets across continents. He stated further that real estate remains one of the most stable and lucrative investment avenues in a rapidly evolving world.

“From urban renewal projects to sustainable housing initiatives, the potential for growth is immense. However, achieving this potential requires knowledge, adaptability, and a commitment to responsible investment,” Sanwo-Olu said.