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Effects of Hyperinflation on Nigeria’s Real Estate

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By Dennis Isong

Definition of Hyperinflation: Hyperinflation is an extremely rapid and out-of-control increase in prices, often exceeding 50% per month. Unlike regular inflation, which is a normal rise in prices over time, hyperinflation involves a collapse in the value of currency, causing prices of goods and services to skyrocket.

This economic phenomenon severely erodes the purchasing power of money, leading to a loss of confidence in the currency and creating chaos in the economy.

Causes of Hyperinflation Several factors can trigger hyperinflation, including:

1. Excessive Money Supply:

When a country prints an excessive amount of money without corresponding economic growth, it can lead to hyperinflation.

This often happens when governments finance large budget deficits by creating new money.

2. Loss of Confidence in the country’s legal tender: If people lose confidence in a currency’s value, they may rush to spend it quickly, leading to rapid price increases.

3. Demand-Pull Inflation: When aggregate demand in an economy persistently exceeds aggregate supply, it can cause prices to rise uncontrollably.

4. Cost-Push Inflation:  Increases in the costs of production (such as wages and raw materials) can lead to higher prices. If this happens on a large scale, it can contribute to hyperinflation.

5. Exchange Rate Depreciation: A sharp decline in the value of a country’s currency compared to others can make imports more expensive, fueling inflation.

Effects of Hyperinflation on Nigeria Real Estate

Hyperinflation has profound effects on Nigeria’s real estate sector: 1. Value Erosion: Hyperinflation erodes the value of money, making it difficult to preserve the value of real estate investments. Property owners may find that the real value of their assets decreases over time, even if nominal prices increase.

2. Investment Deterrence:

The uncertainty and instability caused by hyperinflation deter both domestic and foreign investment in real estate. Investors seek stable environments, and hyperinflation creates too much risk.

Nigerians in the diaspora can influence the real estate market by buying properties, driving demand, and potentially stabilizing prices in certain segments of the market.

3. Construction Costs:

The costs of building materials and labor can skyrocket during hyperinflation, making new construction projects prohibitively expensive. This leads to a slowdown in real estate development.

4. Rental Market Impact:

Rent prices can become highly volatile. Landlords may struggle to set rents that keep up with inflation, while tenants may find it increasingly difficult to afford housing.

5. Financing Difficulties:

Hyperinflation disrupts the lending market. Banks may be unwilling to issue long-term loans, and interest rates can become extraordinarily high, making mortgage financing unaffordable for many potential homeowners.

How it Affects Nigerians in the Diaspora Positively While hyperinflation brings significant challenges, it can have some positive effects for Nigerians in the diaspora:

1. Investment Opportunities:

Nigerians living abroad with access to stable foreign currencies can find investment opportunities in the domestic real estate market.

As local property values plummet in real terms, diaspora Nigerians can purchase properties at relatively lower prices, potentially yielding significant returns if and when the economy stabilizes.

2. Remittance Value:

Remittances sent back to Nigeria by diaspora Nigerians can gain substantial value. As the local currency depreciates, the foreign currency received through remittances can go much further, enabling recipients to buy more real estate or other assets.

3. Support for Family and Community:

Diaspora Nigerians can provide crucial financial support to their families, helping them cope with the economic turmoil. This support can include funding for housing, which becomes more pressing during hyperinflation.

4. Market Influence:

With increased purchasing power, Nigerians in the diaspora can influence the real estate market by buying properties, driving demand, and potentially stabilizing prices in certain segments of the market.

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LASPA and LASBACA Seal BetterMart Supermarket Ajah Lagos

The facility manager and the workers were wisked off by the agencies.

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•Rowdy scene of LASPA Enforcement officers seal Better Mart/ Ohibaba.com

Lagos State Parking Authority (LASPA) and its still sister agency, Lagos State Building Control Authority , on Monday at 11.45am , swoop down and sealed Better Mart, a supermarket on Badore road, Ajah , Lagos; claiming regulatory infractions.

The facility manager and the workers were wisked off by the agencies.

Ohibaba.com scoops that the property ,owned by a business woman was purchased at the cost of over N170 million, then refurbished.

One of the agencies enforcement officer prattled that the owner of the supermarket had been invited to their office Alausa, Ikeja, adding that she will likely pay N20 million as regulatory infraction before they unseal the property.

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Crime

BREAKING: Many shot dead as gunmen hit Yelwata in Benue

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Tension has gripped Yelwata community in Benue State after gunmen reportedly people in the early hours of Monday.

Eyewitnesses said the renewed attack triggered a protest by local women, who took to the streets demanding that soldiers stationed in the area be withdrawn to their barracks.

The aggrieved residents also called for immediate transportation to Makurdi, insisting they no longer feel safe in the community.

“They should take us to Makurdi because the government cannot protect us,” one protester said.

The attack is coming barely two months after gunmen, believed to be herders, on June 13, stormed the community and killed between 200 people, including internally displaced persons, with many burned alive during a night of brutal violence.

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Crime

DSS Arraigns Owo Boming Suspects

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…..As Court fixes August 19 for start of trial

‎The Nigerian government has arraigned five persons who allegedly carried out the mass shooting and bombing at a Catholic Church in Owo Ondo state on June 5, 2022, where over 40 persons were killed.

‎The five defendants who were arraigned before Justice Emeka Nwite of the Federal High Court in Abuja pleaded not guilty to the 9-count charge bordering on terrorism.

The defendants are Idris Omeiza, Al Qasim Idris, Jamiu Abdulmalik, Abdulhaleem Idris and Momoh Abubakar.

‎During the proceedings, counsel for the defendants, Abdullahi Muhammad, informed the Court that his clients have been in DSS custody since 2022. He adds that their families and lawyers have been prevented from accessing them. Muhammad thereby prayed the court that they be granted access.

‎In his response, Callistus Eze, who is the prosecutor, informed the Court that he was unaware that the defendants had not been allowed access to families and lawyers. He assured that a formal written request by those affected before visitation will not be turned down by the DSS.

‎Justice Emeka Nwite thereby ordered that defendants be allowed to access their families and lawyers. The judge had made this order after earlier granting an application for the matter to be heard during vacation.

‎Justice Nwite further ordered that the defendants, having given a not guilty plea, be remanded at the DSS facility. The judge then fixed August 19 for the commencement of trial.

‎As contained in the charge sheet, the five and others at large, sometime in 2021, allegedly became members of the Al Shabab Terrorist Group, with a cell in Kogi State, an act that is in breach of Section 25(1) of the Terrorism (Prevention and Prohibition) Act, 2022.

‎They allegedly met on May 30, as well as 3 and 4 June 2022 at the Government Secondary School, Ogaminana, Adavi Local Government Area, Kogi State and behind Omialafa Central Mosque, Ose Local Government Area, Ondo State.

‎It was during these meetings, according to the charge sheet, that they hatched the plans to attack the St. Francis Catholic Church, Owo, Ondo State on 5 June 2022.

‎On the day of the incident, the attackers used AK-47 and improvised explosive devices IEDs to attack the worshippers during the Sunday service after shutting the doors. They used the IEDs and shot at the worshippers, including many children. The assailants also surrounded the church to shoot at those who attempted to escape the scene.


‎THE BACK STORY

‎On June 5, 2022, a mass shooting and bombing took place at St. Francis Xavier Catholic Church in Owo, Ondo State, during a Sunday service. The attack claimed at least 40 lives, with some reports suggesting the death toll could be as high as 80, including many children. Dozens more were injured in the assault.

‎The incident began around 11:30 AM when armed gunmen, disguised as worshippers, entered the church while others positioned themselves outside.

They detonated improvised explosive devices near the church and opened fire on people both inside and outside the building. The attackers locked the main entrance, shooting anyone attempting to escape. The brutal assault lasted between 15 and 30 minutes before the assailants fled the scene.

‎No organization immediately took responsibility for the attack. However, the Nigerian federal government suspected the Islamic State West Africa Province (ISWAP) of orchestrating the massacre.

‎Some local residents blamed herdsmen, though these claims remain contested. Authorities made arrests following the attack, including suspects believed to be linked to ISWAP and plans for additional assaults.

‎This massacre shocked the southwestern region of Nigeria, which is typically more peaceful and rarely experiences violent attacks on churches compared to other areas of the country plagued by insurgencies and banditry.

The Owo church attack stands as one of the deadliest assaults on a place of worship in Nigeria’s recent history, highlighting the ongoing security challenges the nation faces despite ongoing efforts to combat insurgent and militant groups.

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