#REAL ESTATE: A Source Of Direct Investment To The Economy.
The Nigerian Economy from 1960 to date
The Nigerian economy from 1960s to date has been heavily dependent on Petroleum (oil and gas sector) which has had a 50/50 impact on the rise and fall of the country’s economy amongst other sectors. Nigeria as a country has been immensely blessed with raw materials and natural resources which are not fully utilized.
In the 1980s, as in the 1970s and 1960s, Nigeria dependence on mostly petroleum accounted for 87 percent of export receipts and 77 percent of the Federal government’s revenue (which could be more if attention were being paid to other sector as it was on the oil and gas sector). But around this period, there was economic collapse in the late 1970s and early 1980 which contributed to substantial disconnect and conflict between ethnic communities as a result to the civil war and its aftermath.
Another relevant feature of the Nigerian economy was a series of abrupt changes in the government’s share of expenditure. As a percentage of gross domestic products, national government expenditure rose from 9 percent in 1962 to 44 percent in 1979, but fell to 17 percent in 1988.
The late 1990s and early 2000s saw an emergence of a new system of government (which became stable for over 16 years) with the economy owing from $30 billion in debts to over $40 billion reserves.
We can say largely that the cause of rise and fall in the country’s economy is as a result of our sole interest in petroleum, leaving other sectors struggling to keep up with little or no interest by the government. In May of 1977, the exchange rate to a dollar was N1 to $1 but now in 2016, it is N350 to $1.
Real Estate as a Source of Direct Investment
Real Estate, sometimes slow is a money market industry where if invested wisely will yield immeasurable wealth to the country’s economy. Earlier on, I mentioned that Nigeria is richly blessed with natural resources (a vast amount of unoccupied lands) and raw materials (iron ore, sand etc), which when utilized can add to the country’s GDP. A research carried out by Price-water house coopers predicted that in 2016, real estate would be valued at $13.65 billion, accounting for 7.6 percent of the country’s gross domestic product. The Lagos State government estimated the Lagos population to be at 21million with a 4 million housing shortage, while the World Bank estimates the housing shortage in the country to be at 17 million.
With the above figure clearly stated, there is desperate need of investing in the real estate sector by developing, selling, leasing, letting of movable and unmovable properties which will benefit the people in the country and contribute to the growth of the nation’s economy (as a result of profit realized from the investments).
Also the government has made it possible for investors in getting mortgage loan from federal mortgage bank (FMBN) and its other sister organization by commercial lending for housing, mortgage refinancing, mortgage purchasing and warehousing and mortgage backed securitization with market friendly regulations and ensuring that housing and mortgage contracts are enforceable.
Real Estate is the new money market for our economy; it is time to start investing.
Wikipedia: Economy history of Nigeria
BGL Research and Intelligence: Housing and Mortgage sector – the evolving role of public sector in the provision of affordable housing and mortgage financing.
This article incorporates public domain materials from websites or documents.