- But RoI could boost GDP by $200bn annually
ONOME AMUGE IN LAGOS, NIGERIA
In a sad reality, Nigeria’s cities and towns are plagued by abandoned construction sites, with different abandoned projects, including houses, schools, churches, offices, malls, among various other buildings, collectively worth billions of naira, littering various parts of the country.
Surveys show these projects to have been started by federal, states and local governments. But even more worrying is that emerging data shows many of these projects to be linked to intervention quangos such as the Niger Delta Development Commission (NDDC), a creation of the Nigerian government many analysts said should have been run like the Marshall Plan of the United States, created to restore the infrastructure of Europe after World War 2.
The monumental failure of the NDDC in infrastructure provision has not stopped other regions of Nigeria agitating for their own development commission and politicians, lashing onto this craving, have gone on to create the North East Development Commission; North Central Development Commission; North West Development Commission; South East Development Commission; and a bill is in the works at the National Assembly to create a South West Development Commission, which analysts say now promises a country-wide sleaze in potentially unrealisable infrastructure projects that would be left abandoned.
This troubling trend of project abandonment has become so severe that Nigeria has been dubbed the world’s junk-yard for abandoned projects, a shocking moniker for a country that boasts great potential in the construction industry, given its large population and immense human resource capacity.
The dire state of unfinished projects in Nigeria was recently highlighted by Digital Experience Technology Limited, a leading digital technology services company, which estimated that at least N18 trillion would be needed to complete all abandoned buildings across the country.
The figure, equivalent to about 7.3 percent of Nigeria’s N234.4 trillion gross domestic product (GDP) as at 2023, underscores the enormous challenge and cost of restoring the country’s vast collection of abandoned construction sites.
Digital Experience Technology Limited, in a report titled, “Reviving Nigeria’s Hidden Assets: Strategic Framework for the Rehabilitation of Abandoned Buildings”, estimated that over 100,000 abandoned buildings dot the country, with the vast majority concentrated in major urban centres like Lagos, Abuja, and Port Harcourt.
The report estimated that the sum of N18 trillion (roughly $24 billion) would be required to cover structural repairs, legal resolutions, and modernising the facilities.
On the bright side, the report also noted that returns on such investments could be highly lucrative, with the potential to boost Nigeria’s GDP by up to $200 billion annually through increased real estate value, heightened business activities, and job creation opportunities.
Breaking down the cost implications to revive Nigeria’s abandoned buildings, the report indicated that 40 percent of the N18 trillion budget would go towards structural repairs, reflecting the gravity of deterioration facing these structures.
In addition, the report noted that resolving legal issues, a process known as legal resolutions, would account for 30 percent of the budget, while 30 percent of the budget would be dedicated to modernising the structures, ensuring they meet current standards and provide a safe and functional environment for potential occupants.
Digital Experience Technology Limited also revealed the significant economic potential of reviving abandoned buildings in Nigeria. According to the findings, this process could yield a 35 percent increase in revenue from business activities, such as retail, hospitality, and other commercial endeavours that would thrive in these revitalised structures.
The report predicted a 25 percent surge in property values, as the rehabilitation would restore the buildings to their former glory, making them more desirable to potential buyers and investors. This revival, it noted, would also result in additional economic benefits, such as increased job opportunities, contributing to the overall prosperity of the country.
“Over the long term, property tax revenues may grow by about 20 percent, allowing municipalities to broaden public infrastructure and services significantly,” the report added.
The technology firm also underscored the potential benefits of embracing technology in the rehabilitation process. By utilising automation in construction and materials management, the report proposed a 10-15 percent reduction in costs, drawing on international studies that suggest technology-based revamps lead to a reduction in traditional overheads, streamlined processes, and an increase in productivity.
The report further emphasised the potential of reviving abandoned buildings in Nigeria by highlighting four iconic abandoned structures as examples of the country’s untapped potential for revitalisation.
The report read: “The NITEL Building in Lagos, an emblematic tower originally designated for Nigerian Telecommunications Limited, stands as a symbol of both potential and neglect. Abandoned due to structural insolvency and legal complications, the building’s rehabilitation is estimated to cost N20bn. Despite this significant investment, the potential returns are equally impressive. Transforming the NITEL Building into a tech hub could yield an annual revenue of N5bn and create over 2,000 jobs, positioning Lagos as a major player in the technology and communications sectors.
“Similarly, the Independence Building in Lagos, once the tallest structure in West Africa, carries rich historic significance that has been overshadowed by years of neglect. Reviving this iconic building would require an investment of N15bn. However, the potential rewards include generating N3bn in annual rental incomes and creating 1,500 jobs. This project would not only contribute to the growth of Lagos’ business district but also reinforce the city’s development ambitions on a global scale.”
Another notable abandoned structures identified in the report is the Federal Secretariat Complex in Abuja, a once-prestigious edifice that has fallen into disrepair and is now shrouded in legal complications.
The report highlighted the immense potential of this complex, citing the projected cost of reviving it to be around N30 billion. The report also projected that the Federal Secretariat Complex in Abuja, if revitalised, could become a hub for both government and private sector offices, elevating the city’s status as a regional power centre.
By transforming the complex into a bustling centre of commerce and administration, the report estimated that the revitalised complex could generate an annual revenue of N10 billion, supporting approximately 3,000 jobs.
The report also brought attention to the neglected state of the Cocoa House, the first skyscraper in West Africa, located in the heart of Dugbe, Ibadan, Oyo State. which was once the crown jewel of Nigeria’s architectural achievements. It indicated that restoring the 26-storey historic building would require an investment of N10 billion.
Despite the significant investment required to restore the Cocoa House, the report noted that the rejuvenated structure could serve as a significant economic catalyst for the region.
Once restored to its former glory, the Cocoa House is estimated to generate N2 billion in annual revenue and create job opportunities for up to 1,000 people.
“Altogether, these ventures among Nigeria’s top 10 largest abandoned structures highlight an extraordinary opportunity. If addressed, these latent assets could collectively generate approximately N150 billion ($200m) in annual revenue,” the report stated.
The report concluded that the potential benefits of rehabilitating abandoned buildings could serve as a powerful demonstration of the positive impact that strategic investments in neglected infrastructure can have on the country’s economy and job market.
