Lagos State, Nigeria, is taking a step to address a significant burden on its property market: unregistered buildings. In a move expected to unlock economic potential, the state government recently announced a three-month amnesty program.
Governor Babajide Sanwo-Olu revealed the initiative, which will run from May 2nd to July 30th, 2024. During this period, owners and developers of existing unregistered structures can obtain planning permits or approvals without facing penalties or additional fees.
This amnesty program is seen as a potential solution to Nigeria’s substantial “dead capital” problem. A study by PwC estimates that the value of these unregistered properties nationwide reaches nearly $1 trillion. Dead capital refers to assets that are unable to generate income because of legal or bureaucratic hurdles.
By allowing the registration of these properties, the Lagos government hopes to achieve several goals. Firstly, it will bring a significant portion of the real estate market under official regulation. This could lead to increased tax revenue for the state. Secondly, registered properties become more attractive to potential buyers and renters, fostering a more vibrant property market. Finally, owners of previously unregistered buildings will now be able to leverage their assets for financial gain, such as through loans or sales.
The amnesty program is not without its challenges. There may be a surge in applications during the limited window, potentially straining Lagos’ administrative resources. Additionally, some property owners might be hesitant to come forward due to concerns about potential fines or legal issues unrelated to registration.
Despite these potential hurdles, the Lagos amnesty program is a welcome development for the Nigerian property market. It has the potential to unlock billions of dollars in value and stimulate economic activity in the sector. The success of the program will likely be closely monitored by other Nigerian states grappling with similar issues of unregistered properties.
