BARRIERS TO INVESTMENT HINDERS GROWTH IN NIGERIA'S RETAIL SECTOR
At a recent breakfast meeting at the Nigeria-South Africa Chamber of Commerce, Mrs. Erejuwa Gbadebo, CEO of Broll, a leading property services group in Africa, highlighted the huge potential of the real estate industry as a viable alternative source of income for Nigeria's economy. Mrs. Gbadebo highlighted the fact that growing urbanisation, demography, technological developments, natural resources and financial deepening are five trends powering Nigeria's appeal to foreign investors. She also stated the challenges that Nigeria faces in developing the retail landscape including the unclear legal framework of purchasing land, the lack of inappropriate and innovative building techniques and lack of up-to-date market data. The impact of the challenges mean that Nigeria's real estate sector, according to Mrs Gbadebo, contributes to only 1.79% of the nations GDP as opposed to 10-15% contribution in other emerging markets. Coincidentally the McKinsey quarterly, a business journal, also recently reported on the rise of the African consumer market as the single largest business opportunity. Growth potential in Africa, according to McKinsey, is estimated at $400 billion by 2020. But yet again there are obstacles in reaching this, this time by the retail companies unable to translate the potential into action.
Calls on the Nigerian government to lift bans on some areas of foreign trade has been heeded but more needs to be done to drive foreign and local investment. This will help grow the retail sector, aiding in the rise of further development of shopping malls and other areas of real estate.
