N7.5trn Lagos real estate assets locked in informal sector

About $48.2 billion (about N7.5 trillion) real estate assets in Lagos, Nigeria’s economic hub, are locked up in extra-legal (informal) economy, Sola Oworu, the state commissioner for commerce and industry, has disclosed.

This represents about 90.2 percent of total real estate assets in Lagos, meaning that only 8 percent real estate assets are captured within the formal sector.

Oworu referred to a pre-diagnostic study by the Institute of Liberty and Democracy (ILD), a Peru-based non-governmental organisation, in 2009. This, according to the commissioner, at a news conference in Ikeja, Lagos, last week, promotes poverty among the people, as owners of such property find it difficult to access funds which are available in the formal sector to lift themselves out of poverty.

Against this background, Oworu said the state government is embarking on reforms that will help in capturing this huge informal sector within the state legal framework.

She said, “Notwithstanding the status of Lagos State as Nigeria’s manufacturing, commercial and financial nerve centre, a lot of economic activities are daily transacted outside the formal economic structure in what is otherwise termed the informal sector or shadow economy which has been found to be quite massive in size. This scenario leaves much to be desired in terms of the ability of operators in this sector to leverage on their assets for the creation of the much needed capital essential for the growth and expansion of their businesses.

“To address this development, the state government in collaboration with the Institute for Liberty and Democracy (ILD), a Peru-based non-governmental and research-oriented organisation, has begun the process of collecting data on assets existing in the informal markets/extralegal economy, classified as dead capital or locked assets. The LASG-ILD initiative is thus intended to assist the state in identifying the various constraints inhibiting enterprise and business units in the informal/extra-legal economy and aid their eventual transition to the formal sector,” Oworu explained.

The commissioner stated that the programme would help to develop key institutional reforms which would be implemented by the state government to encourage the transition from informal to formal sector.

On the Lekki-Epe international airport, the commissioner said work has commenced, adding that the airport would complement activities at the LFTZ and also provide alternative air transport services in the state.

“The Lekki-Epe International Airport is designed to handle 5 million passengers annually with provision for a modular terminal for future expansion. Preliminary works on the project have commenced, the clearing of 150 hectares (run way), 4.5km of the access road and 9 kilometres of perimeter road,” she said.

Oworu said the airport would be built and managed by private investors, noting that the process for the selection of private investors “to develop and manage the airport has commenced”.

JOSHUA BASSEY