Nigeria’s Hidden Billions: How The Lack of Transparency in Real Estate Blocks Growth and Investment

Nigeria's Real Estate sector faces a critical challenge: a significant lack of transparency that hinders domestic and international investment. This information deficit carries a heavy economic cost, impeding potential growth and development.

The 2022 Global Real Estate Transparency Index by JLL categorized Nigeria as a "low-transparent" market, lagging considerably behind regional leader South Africa. This opacity has tangible financial implications. PwC estimates that between $300 billion and $900 billion in "dead capital" is locked within Nigeria's residential real estate and agricultural land. Their analysis suggests that improving land registry systems to provide secure and transparent ownership could unlock this capital, fostering increased investment, economic activity, and improved living standards.

Industry analysis indicates this lack of reliable information translates to a share of an annual $6 trillion global fund inflow into the African property market. Most International investors abandon plans to enter the Nigerian market, explicitly citing concerns about data reliability. The repercussions extend beyond unrealized transactions. The lack of transparency inflates transaction costs and adds an extra risk premium to financing due to prevailing market uncertainty.

Similarly, Nigeria's mortgage market remains significantly underdeveloped. Data from the Nigerian Mortgage Refinance Company (NMRC) shows Nigeria's mortgage debt-to-GDP ratio to be below 1%, starkly contrasting with South Africa's 16.33%. This low mortgage penetration is directly linked to the difficulty in obtaining reliable property valuations.

Without standardized data, the Nigerian market largely functions on speculation rather than well-informed investment decisions, putting smaller investors who lack the resources for extensive due diligence at a disadvantage.

Despite these challenges, there are signs of progress. The Lagos State Government's implementation of an electronic Certificate of Occupancy system represents a positive step, and ongoing federal efforts to digitise land registries hold the potential to improve information accessibility. 

For Nigeria to fully realize the potential of its real estate sector, establishing a framework of transparent, reliable, and accessible market data is not merely advantageous but a fundamental necessity. The billions in unrealized investment underscore the urgent need to address this critical infrastructure development challenge.

To solve the lack of transparency in Nigeria’s real estate industry, we’re building something new — a dedicated membership and community platform designed to deliver value to real estate investors, professionals, and enthusiasts like you.

Here’s a short feedback form (takes less than 5 minutes!) to better understand what features, insights, and tools you’d love to see in a members-only portal.