At the first-ever Africa Credit Expo (ACE) 2023, held in Lagos today, Taiwo Ayedun, Founder, CreditRegistry, gave an insightful presentation titled “Turning Nigeria’s ‘Dead Capital’ Into Great Wealth”.
Oganised by CreditRegistry, Africa Credit Expo 2023 is championing large-scale consumer and SME lending in Africa’s financial sector. This was the root of Ayedun’s presentation, shedding light on the vast wealth lying dormant in Nigeria, juxtaposed against the continual borrowing by the government to sustain the economy.
He emphasized the untapped potential within the country’s unregistered assets, labeling them as “dead capital.”
“Right here in Nigeria, we have abundant wealth… yet created wealth is dead. And I’ll show you what we can do to try and integrate wealth.”
The term “dead capital” referred to assets lacking legal registration, hindering their full economic utilisation. Ayedun elucidated the impact of unregistered properties, particularly homes, on Nigeria’s economic potential. He drew from the ideas of Peruvian economist Fernando De Soto, emphasizing the role of property titles in distinguishing developed economies from developing ones.
“What separates economies like the United States from developing markets is the fact that many other countries have titles, and those titles are actually the backbone of the whole power of capital.” Taiwo Ayedun said.
Ayedun’s comprehensive breakdown highlighted the various repercussions of unregistered properties: restricted access to credit, reduced transactional capabilities, diminished investment opportunities, and inhibited economic growth due to the absence of property tax revenues.
The Potential of Dead Capital
Ayedun delved into the estimated value of dead capital in Nigeria, quantifying it to approximately 450 trillion Naira. To unlock this potential wealth, he proposed various measures, pointing out the simplification of property registration processes and the promotion of title insurance companies to ensure secure transactions.
He outlined a strategic roadmap to revitalise dead capital, advocating for:
- Simplified Registration: Proposing streamlined and efficient registration processes, reducing obstacles for homeowners.
- Promotion of Title Insurance: Highlighting the role of title insurance companies in securing transactions and validating property titles, fostering confidence in investments.
- Creation of Mortgage Liquidity: Introducing mechanisms like mortgage-backed securities and mortgage servicing rights to infuse liquidity into the market, attracting long-term investors and enabling banks to offer more mortgages.
The founder of CreditRegistry stressed the role of government policies in harnessing the latent potential of dead capital. The need to ensure every Nigerian home obtains a title, implement efficient registration systems, and foster liquidity in the market is important for Nigeria to potentially witness a solid economic transformation.
“Let us put pressure on our government, disseminate what you’ve learned, and collaborate to create wealth collectively.”
Ayedun’s presentation at Africa Credit Expo 2023 was a roadmap for Nigeria’s economic prosperity, keying into the untapped potential within dead capital and igniting a dialogue for transformative change in property registration and financial systems.
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