Ex-AMCON boss seeks reforms in Real Estate Investment Trust
Former Chief Executive Officer and Managing Director of Asset Management Corporation of Nigeria (AMCON), Mustafa Chike-Obi has called for adjustment in the tax benefit of Real Estate Investment Trust (REIT) to encourage investments in the real estate sector.
Chike-Obi, who spoke at the maiden edition of Fusion of Real Estate, Interior Design and Art (FREIA) conference held in Lagos, stressed that there is too much emphasis on the tax benefit of REIT coming from company and personal income taxes, which he said is not encouraging more investors.
While extolling the resilience of operators in the real estate for working in what is acclaimed all over the world as the most difficult circumstances, he called for more government roles in the sector by guaranteeing certain type of mortgages.
According to him, at present, government is only guaranteeing the lender, which is not doing much and as such should guarantee the mortgage itself.
“Enforcement of mortgage is key to the development of the sector hence government guarantee is key because of the enforcement issues on mortgages.
“This is the way to go in most parts of developed countries like the United States because right now banks are not really interested in mortgages.
“They are very wary about enforcing their property rights because of the image it will create on them”, he said.
He stressed the need for creation of a system where parties collectively bear the cost of evicting tenants, who refused to pay their rents.
Chike-Obi, who is the chief executive officer of Alpha Africa Advisors, also lamented lack of mortgage financing in Nigeria, saying the huge collaterals attached to such financing, is making it a difficult journey.
The former AMCON boss urged stakeholders to create a pressure group that will discuss with government and commercial institutions on the right ways to finance mortgage because government does not listen very quickly in Nigeria unless trade groups, who are credible can sufficiently articulate their desire.