Nigeria trails Ghana, Côte d’Ivoire and Senegal on key measures of real estate investment attractiveness, with weaknesses in legal protections, regulation and the wider investment environment weighing on its ability to compete for property capital.
The finding is contained in a report titled “West Africa real estate market assessment” that applied the Real Estate Investment Attractiveness Index developed by researchers Karsten Lieser and Alexander Groh to evaluate factors affecting property investment across markets.
Despite its weaker institutional environment, Nigeria has significant underlying real estate opportunities because of its population, rapid urbanisation and large housing deficit.
Nigeria Leads on Investment Opportunities
The assessment shows Nigeria scored 32 points for real estate investment opportunities, placing it ahead of Ghana at 28.5 points, Côte d’Ivoire at 28 points and The Gambia at 26 points.
The country’s large population, economic size and substantial unmet demand for housing provide a significant addressable market for developers and investors. However, the advantage in market opportunity is offset by weaknesses in other aspects of the investment environment.
Nigeria Ranks Seventh on Legal and Regulatory Conditions
Nigeria scored 17.5 points on the legal and regulatory environment, ranking seventh among the West African markets assessed. Cabo Verde led the category with 26 points, followed by Senegal with 25 points, The Gambia with 24 points, Ghana with 23.5 points, Côte d’Ivoire with 21 points and Benin with 18 points.
The ranking places Nigeria below Ghana, Côte d’Ivoire and Senegal on an important component of real estate investment attractiveness with Ghana’s relatively stronger position associated with political stability and government policies aimed at supporting investment.
Côte d’Ivoire’s attractiveness was supported by economic growth and infrastructure, including road networks, port facilities and international connectivity
Legal certainty, property rights, investor protection, land administration and regulatory efficiency can affect the cost, timing and risk of property transactions and development. For investors, these factors can be particularly important when committing capital to projects with long development and investment horizons.
Nigeria’s Market Size Advantage
The assessment ranked Nigeria first among the markets reported for real estate investment opportunities, reflecting the country’s large population, economic activity and housing requirements.
The country’s housing shortage also creates opportunities across affordable housing, middle-income residential development, commercial property, logistics and other real estate segments.
The challenge is converting this underlying demand into projects that can be delivered at viable costs and within predictable regulatory and financing conditions.
High financing costs represent a major constraint for Nigeria’s property sector as expensive borrowing can increase construction costs, reduce the number of households able to obtain mortgages and make it more difficult for developers to finance large projects. Developers consequently rely more heavily on equity, off-plan sales, cash purchases and other funding structures.
Investor Protection Remains Critical
Ayo Ibaru, Chief Investment Officer of Pantera, has also highlighted the importance of investor protection and the legal framework in attracting foreign real estate capital.
Ibaru, who was involved in the earlier research, said Nigeria has significant “sheer size and sheer opportunity” but that weaknesses in legal protections and system efficiency affect its attractiveness to investors. He also pointed to greater transparency and deeper real estate investment instruments as areas that could strengthen Nigeria’s property market.
Nigeria Faces a Regional Competition for Capital
The findings suggest that Nigeria’s challenge is not a shortage of real estate demand but the conditions under which investors can access and develop that opportunity.
Ghana, Côte d’Ivoire and Senegal demonstrate the importance of institutional conditions alongside market size when investors evaluate property markets.
For Nigeria, improvements in land administration, property-rights protection, development approvals, market transparency and access to long-term finance could reduce investment risks and strengthen the country’s competitiveness.
Nigeria’s large population and housing deficit provide a substantial foundation for real estate investment. But improving the regulatory and institutional environment will be critical if the country is to translate that market potential into greater domestic and international property investment.
