Tokenization of Nigerian Assets: An Analysis of Feasibility From Real Estate to Agricultural Receipts

Tokenization is the process of converting rights to an asset into a digital token on a blockchain, this represents a transformative

opportunity for Nigeria's economy. As Africa's largest economy with abundant natural resources and a rapidly growing technology sector, Nigeria stands at the crossroads of traditional asset management and digital innovation.

This emerging technology promises to fractionalize high-value assets, increase

market liquidity, and democratize investment opportunities for millions of Nigerians who have previously been excluded from traditional investment pathways. However, the journey toward implementing asset tokenization faces significant legal uncertainties and regulatory challenges that must be addressed to unlock its full potential. This analysis examines the feasibility of tokenizing Nigerian assets across key sectors.

Real Estate Tokenization

The Lagos State Government has announced ambitious plans to tokenize real estate assets, aiming to improve transparency, curb fraud, and broaden access to property ownership through digital tokens and fractionalized interests. This initiative builds upon earlier reforms such as the Electronic Geographic Information System (E-GIS) portal, which has digitized key land administration processes. With Lagos's residential real estate sector valued at approximately ₦173 trillion (US$11

billion) and commercial properties at $630 million, tokenization could unlock tremendous latent liquidity in this market.

Tokenization enables the division of high-value properties into affordable digital shares, allowing retail investors to participate with minimal capital outlay. This democratization of access could transform real estate from an exclusive assetclass dominated by wealthy individuals and institutions into a market

accessible to ordinary Nigerians. Platforms elsewhere globally already allowinvestments as low as $50 in tokenized real estate, demonstrating the potential for similar models in Nigeria.

Blockchain-based tokenization could also introduce unprecedented transparency to agricultural supply chains, allowing investors and consumers to verify the provenance and quality of Nigerian agricultural exports. This would potentially increase the market value

of Nigerian crops internationally while reducing fraud and inefficiency indomestic markets.

The Legal Framework : Navigating Uncertainty

Nigeria's regulatory environment for digital assets remains characterized by significant contradictions between major regulatory bodies:

The Central Bank of Nigeria (CBN) maintains a restrictive stance toward cryptocurrencies, issuing a 2021 directive prohibiting regulated

financial institutions from engaging in cryptocurrency transactions. Meanwhile, the Securities and Exchange Commission (SEC) hasintroduced rules for digital asset offerings and custody, formally recognizing tokens as securities under certain conditions.

This regulatory misalignment creates uncertainty fortokenization projects, particularly regarding the legal status of asset-backed tokens and the permissible involvement of traditional financial institutions.

Technical and Infrastructure Challenges

1. Blockchain Readiness: Despite growing mobile penetration and digital financialservices adoption, Nigeria faces significant infrastructure limitations that could hinder tokenization implementation

2. Internet connectivity issues, power shortages, andinadequate technological support could impede the reliable operation of blockchain-based solutions.

The proposed national blockchain (provisionally dubbed Nigerium remains in development, with experts suggesting it could take years before readiness for handling sensitive asset data.

Secure custody solutions for digital assets require further development to meet the robustness expectations of institutional investors and regulatory bodies.

Many Nigerians still remain unfamiliar with blockchain technology's intricacies, necessitating substantial educational

initiatives to ensure understanding of tokenized assets' benefits and risks.

Conclusively, Tokenization of Nigerian assets presents are remarkable opportunity to unlock liquidity, democratize investment, and reduce corruption in key sectors like real estate and agriculture. The technology could potentially channel portions of the approximately $54 billion in annual

diaspora remittances into productive domestic investments. However, realizing this potential requires carefully balancing innovation with investor protection.

Nigeria must overcome significant legal ambiguities, regulatory contradictions, and infrastructure limitations to create an

environment where tokenization can thrive.