Nigeria's Untapped Assets Worth Over 1 Trillion Dollars, Says Property Rights Expert

A significant portion of Nigeria's physical assets remain economically dormant due to weak property rights documentation, potentially unlocking trillions in value if formalized. Experts argue that regularizing informal property ownership could strengthen the naira, boost business investment, and expand credit access for ordinary Nigerians.

Nigeria is sitting on an estimated one trillion dollars in unproductive assets that could transform the economy if properly documented and formalized, according to property rights advocates.

These assets, held largely by low-income Nigerians in informal settlements, rural areas, and unregistered businesses, remain economically "dead" because owners cannot prove legal ownership. Without formal documentation, property cannot serve as collateral for bank loans, cannot be efficiently bought or sold, and cannot generate tax revenue for government.

The concept of dead capital refers to assets that exist physically but lack legal documentation. In Nigeria, this includes homes built on unregistered land, businesses operating without formal registration, and agricultural plots without clear title deeds. When capital remains dead, it cannot circulate through the financial system to generate economic activity.

Formalizing these assets would have immediate implications for the naira and Nigeria's external sector. Access to credit would expand dramatically. Currently, Nigerian banks struggle to lend to small businesses and individuals because borrowers cannot pledge collateral. If property could be registered and used as security, lending would increase, fueling business expansion and job creation. Stronger domestic economic activity would reduce pressure on the naira in foreign exchange markets. A healthier real sector means less demand for scarce dollars and greater stability in the exchange rate.

For everyday Nigerians, formalization means access to finance at lower interest rates. Small business owners operating informally pay extortionate rates to money lenders. With registered property as collateral, they could borrow from banks at single-digit rates. Home owners could refinance at reasonable terms instead of relying on family savings for emergencies. Agricultural producers in rural areas could access government-backed credit schemes reserved for registered farmers.

The government would also benefit materially. Formalized property generates property taxes. Registered businesses file returns and pay income taxes. Current estimates suggest Nigeria loses hundreds of billions in annual tax revenue from the informal economy. Expanding the tax base would improve government finances without raising tax rates on those already compliant, potentially reducing the need for expensive external borrowing that strains the naira.

Historically, countries that formalized informal property saw dramatic economic acceleration. When Peru formalized shantytown properties in the 1990s, home values increased by 300 percent within months. Owners could now borrow against equity and invest in business expansion. Similar transitions in Egypt, Colombia, and Indonesia generated rapid growth in credit, business formation, and employment.

Nigeria's challenge is execution. Previous governments launched property registration initiatives with limited success. Current efforts under the National Bureau of Statistics and state governments remain fragmented. Digitizing millions of informal claims requires significant capital investment, trained personnel, and political will to navigate competing land claims. Rural areas particularly lack infrastructure for formal registration.

Property rights formalization also intersects with land use reform. Much dead capital sits on land where title remains ambiguous between traditional rulers, state governments, and federal authorities. Clarifying these claims could unlock agricultural productivity in the north and real estate development in expanding urban centers.

Economists estimate that even partial formalization of 25 to 30 percent of current dead capital could add 3 to 5 percent to annual GDP growth. For a naira under consistent devaluation pressure, this productivity gain would be transformative. Higher growth means more dollar-earning exports and reduced need for imports, fundamentally improving Nigeria's external balance.