A Path to Economic Transformation
In recent times, there has been a growing focus on the economic progress of Nigeria, with notable achievements such as GDP growth, declining inflation, and improved oil production. However, despite these successes, one pressing challenge remains: exchange rate volatility. The naira has experienced significant depreciation, ranking among the worst-performing currencies in Africa. This situation has led to a natural inclination towards the dollar, as N1bn is now worth less than $1m. To address this issue, it is essential to create tangible economic fundamentals that give people reason to hold and use the naira.
Land and Real Estate Titling Reform
One of the most transformative reforms that could be implemented is land and real estate titling. Studies by the World Bank, PwC, and my firm, OAL, indicate that 90% of Nigerian land and real estate lack proper titles. This creates what is known as “dead capital”—assets that cannot be traded or used as collateral. Economist Hernando de Soto highlighted the importance of converting this dead capital into productive assets through formal property rights. This process can revolutionize developing economies by enabling individuals to access credit and participate more fully in the financial system.
Property titling reform transforms dead capital into legally recognized assets. Owners can use their land or homes as collateral to access credit, which encourages banks to lend because the property represents secure collateral. This process releases equity locked in land, converting illiquid assets into financial capital that can circulate through the economy. The result is increased liquidity, with more individuals and businesses gaining access to loans and properties becoming tradable assets.
The foundation for this reform is already being laid through the National Land Registration, Documentation and Titling Programme. What is needed now is acceleration and scale. By indexing property values to the financial system through digital integration and legal harmonization across federal and state systems, we can create an instant credit market worth potentially thousands of times our GDP. This will provide the necessary money flow to finance development across the nation.
Unlocking trapped property assets will encourage investors who currently prefer to buy properties abroad to invest in Nigeria. This will deepen naira-denominated asset markets, reduce dependency on dollar-denominated assets for wealth storage, and strengthen demand for the naira by creating viable local investment alternatives. Using conservative estimates of $900bn in dead capital, at today’s rate of N1,500 to $1, this represents 1.5 quadrillion naira. Releasing this amount into productive use can transform Nigeria’s economy, provide sustainable backing for the naira, and create the foundation for long-term prosperity.
Credit Economy Development
Another critical fundamental is the development of a credit economy. Nigeria operates primarily as a cash economy, which limits its potential because people can only buy what they can afford. In contrast, a well-developed credit system allows people to buy what they cannot afford, provided they manage their debt. For instance, 90% of Americans cannot afford a house without a mortgage. Similarly, any Nigerian who can pay rent can afford a mortgage, but this is not possible without a legal framework.
A robust policy and legal framework to support a credit process will be transformational. With 200 million Nigerians, each with N300,000 in credit facilities, this would inject N60tn into the economy. Naira-denominated credit will boost domestic consumption of locally produced goods and services, reduce import demand and foreign exchange pressure. A thriving naira credit market will deepen domestic financial markets and make the naira more attractive as an asset, reducing the speculative attacks that drive exchange rate volatility.
When citizens can access credit in naira to own homes, start businesses, and build wealth, the currency gains intrinsic value and stability. This credit infrastructure becomes a vital fundamental—a reason for people to hold and transact in naira—thereby reducing vulnerability to exchange rate shocks.
Agricultural Sector Transformation
The agricultural sector is another area that requires significant attention. In the United States, only 2% of the workforce is in agriculture, yet the sector contributes 5.5% to GDP and generates $1.5tn annually. In Nigeria, by contrast, 30 to 38% of the workforce is employed in agriculture, yet the sector contributes 25 to 26% to GDP but generates only $47bn-$49bn annually, less than one thirtieth of America’s output despite having a vastly larger workforce.
This stark disparity reveals a fundamental truth: productivity, not the number of workers, determines agricultural success. America achieves higher output with fewer workers through mechanisation and a fully developed value chain. Nigeria, however, remains trapped at the subsistence level using manual tools: hoes and cutlasses.
The transformation we need is mechanisation, and the potential money flow would be tremendous. With a well-developed policy and legal framework, capital will flow into the economy. The agricultural sector is badly impacted by the titling challenge, as defective and tainted land titles are precisely why we remain at the subsistence level. Farmers cannot access capital for mechanisation without proper collateral.
Moving from subsistence to mechanised agriculture will increase productivity, reduce post-harvest losses, enhance food security, and position Nigeria as a net agricultural exporter. Agricultural exports will generate substantial foreign exchange earnings, increasing FX supply and strengthening the naira. More critically, food self-sufficiency will eliminate the need to import basic staples, currently a major source of FX demand. Reducing food imports alone could save billions of dollars annually, directly stabilising exchange rates and reducing imported inflation.
Conclusion
What I have outlined here is a path to economic transformation. If these three reforms are implemented, along with many others like oil and gas, maritime sector optimisation, and manufacturing, and are fully developed to back the naira, the naira can exchange at optimal rates because there is a fundamental backing for it. If well handled, we will see significant improvement in the next few years with reduced volatility and a stronger naira.
Honourable Minister, this is not going to be easy work. It is painstaking but doable. The success of the tax reform shows it can be done. I project a timeline of 10 to 20 years, which is not too far-fetched. During my lifetime, I have witnessed three presidents who each served eight years, so it can be done. The difference between incremental improvement and transformative change is ambition matched with execution. These reforms would not merely stabilise the naira; they would fundamentally restructure our economy and create sustainable prosperity for generations.
