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‘Government should set aside fund for real estate infrastructure’

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FESTUS ADEBAYO

Mr. FESTUS ADEBAYO is the president, Housing Development Advocacy Network and convener of the yearly Abuja International Housing Show (AIHS). He spoke with VICTOR GBONEGUN on various issues in the industry and urged the government to use Nigerian Sovereign Authority to fund infrastructure and enact regulations that would guide the practice of real estate in country.

Experts in housing are lamenting a lack of conducive environment for their operations, what do you think the government should do in that respect?
Nigerian Government needs to start thinking of tackling poverty through housing because housing has a multiplier effect on any economy. Housing, if properly implemented can increase Nigeria’s Gross Domestic Product (GDP). Take a simple case of a building construction site where apart from the building materials suppliers, artisans, and others, people like the local food vendor, the “keke Napep operators” and others making money on daily basis too.

Nigeria as a nation can achieve practical solutions to affordable housing if the government can address some of the major issues militating against our collective goal as a nation.

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The issue of the Land Use Act needs to be properly addressed not just paying lip service. Rwanda was able to resolve their Land Use Act issues through a strong political will, today Rwanda is rated the second country in the world when it comes to land transparency. Land titling should be made affordable like it is the practice in the developed economies. Nigerians paying 15 percent of the cost of land is very disheartening.

The government should through the Nigerian Sovereign Authority set aside special funds, specifically for real estate infrastructural development. This fund should be administered to provide access roads and other utilities for various housing estates all over the country.

The time has come for us as a nation to look inwards by working on building houses with 100 percent local content. The Abuja housing show is currently collaborating with Nigerian Building Road Research Institute (NBRRI) and the Nigerian Housing Advocacy group to produce a ‘made in Nigeria homes’.

The homeownership among civil servants is fast becoming a mirage. What can the authorities do to promote home accessibility for low-income earners?
The current minimum wage of N18, 000 wouldn’t be able to sustain a viable housing sector thus we welcome the recent review of the new minimum wage. The Federal Mortgage Bank of Nigeria (FMBN) is the only mortgage bank in Nigeria today that offers a single-digit interest rate, thus re-capitalizing the bank is one of the critical solutions to providing affordable housing to the over 17 Millions Nigerians in need of a roof over their heads.

Despite the significant contribution of the industry to the Nation’s Gross Domestic Product (GDP), the real estate sector has experienced a downturn in the last three and half years. What is responsible for this and how can it be improved?
In many countries, the housing sector is one of the leading contributors to GDP, but as a result of a combination of factors including restricted access to land, poor policy implementation, insufficient data, inadequate liquidity to finance housing, the sector has failed to impact the Nigerian economy as it should. Housing requires long term funding, but that is scarcely available in Nigeria. That is why in Abuja Housing Show, we are promoting the need to use housing to drive jobs, stimulate the economy, and ensure that the mortgage market takes its rightful position in relation to Nigeria’s GDP. These issues will create the centre of our debate this year.

How could the federal government attract more investment in the real estate industry?
One sure way is by having a strong political will to make housing a cardinal programme just like Agriculture. The government should also pass laws to re-organize the real estate sector, which should be in line with international best practices.

All real estate practitioners should be licensed. The government should create an enabling environment to boost international investors’ confidence in the sector. The government should also address Land use act issues, re-capitalize FMBN, increase the minimum wage and provide funds for more research into local building material production.

The use of technology has become a global phenomenon in virtually all aspects of life. Are you satisfied with the degree of adoption of such innovation in the Nigerian housing industry? What recommendations would you be giving to operators in the sector?
I agree that the importance of technology in transforming the housing sector cannot be neglected. The adoption of technology in the housing sector remains one of the foremost advocacies at the Abuja International Housing Show. Every year, we bring experts and leading technology companies to come and showcase cutting edge innovations to the Nigerian market. So far, some of their products have been able to make inroads into our housing sector. But there is still a lot to be done. At the show, we encourage federal and state governments to invest in technological research and development. As much as we need to import the most updated technologies, we also need to develop home grown ideas that are unique to our problems and environment. There is need to have a technological database, state of the art construction equipment and more innovations.

How could practitioners address the menace of poor quality in housing delivery?
The issue of substandard housing development remains a major cause of concern for professionals. Because of the lack of supra-regulation in the industry, a lot of unprofessional developers have been able to operate without any form of sanction for their misdeeds. This year, we are going to specifically advocate for the need for the establishment of a supra-regulatory agency that can oversee every activity in the housing, mortgage and construction industries.

Currently, only professional bodies are operating in silos. But there is need for unanimous accountability to a body established by law. This has to happen if we must curtail the issue of poor quality housing delivery. Only dubious and unprofessional developers use low-quality materials. True professionals cannot afford to tarnish their image by using such materials. We need to sieve out the bad eggs. At Abuja International Housing Show for example, we have been able to liaise with all professional bodies to ensure that only credible developers participate at the show. If we have an overseeing regulatory agency, it will be easier to fish out the bad eggs and maintain a standard that cannot be compromised.

The menace of building collapse has remained unresolved in the sector. What is the best way to address the situation?
The establishment of a supra-regulatory agency will greatly limit this situation. If there’s an organization that holds every developer accountable to a certain standard, we wouldn’t have the problem of building collapse. We need a body that can enforce these rules and wield the big stick. Some so-called developers are not professionals. They are getting away with their transgressions because there is no one to punish them. Apart from establishing a regulatory agency for quality control, there is also the need for state governments and municipal authorities to identify old and dilapidating structures that can no longer stand the test of time. Enforcement agencies should ensure that residents in such buildings are evacuated and such buildings brought down in order to prevent a greater disaster. So it’s important for everyone to keep an eye on what’s going on. Prevention like they say is better than cure.

The Abuja Housing Show is in its 13th edition, looking back, how has it impacted the real estate sector and what do you set to do differently this year?
When we conceived this show 13 years ago, we meant for it to fill a critical gap in Nigeria housing sector, and by extension Africa. We have a massive housing challenge here with at least 17 million housing deficit. The dignity of man lies in his ability to be sheltered, but that has been a challenge for this country.

There was a need to establish a platform for concerned public and private stakeholders fashion out the most effective approaches to addressing these housing challenges. The Abuja International Housing Show has now become the largest housing and construction platform for local and international stakeholders to establish an interdependent network of productivity. In terms of impact, resolutions from the show have been able to influence participating state governments to establish novel policies like the Land Geographical Information System (LGIS) which has enabled them create a comprehensive data on lands, its allocation and resolution of disputes.

The importance of creating dedicated ministries of housing was also realized by most governors, who attended the show and harkened to the recommendation of housing stakeholders. The show has and continues to canvas for the passage of housing development laws in Nigeria. At the 11th edition, the NMRC was spurred to champion the need for federal and states governments to adopt foreclosure law. As for the amendment of the Land Use Act, there are already signs of progress in the national assembly.

Another significant impact of the show has been the corporate housing and construction partnerships that have been established because of the show. We have seen the development of at least 200 housing estates through investment partnerships that were established at the show. The show has also been recognized as the market place of information in the industry. With high caliber panels of local and international speakers as well as executives, there has been so many lessons learnt by participating stakeholders, whose numbers have now grown to at least 30, 000. The show has also created a lot of job opportunities for skilled persons because we recognize that job creation is the responsibility of all stakeholders. It is usually a hunting ground for companies and manufacturers looking for skilled employees. The annual show brings a lot of patronage to businesses like hotels, printing companies, events companies, travel agents and airlines, as well as caterers. For exhibitors, the show offers them the biggest and most reliable market to introduce new products and make great sales. We currently have over 400 exhibitors. Of all these, our greatest achievement has been the consistent advocacy and push for affordable housing for all Nigerians, and we are gradually seeing it come through.

What informed this year’s theme, ‘Tackling Poverty through Investment in Housing? How can Nigeria achieve practical solutions in affordable housing for every citizen?
The government needs to provide a conducive environment by enacting regulations that would guide the practice of real estate in Nigeria, a situation where you have fake builders, agents and mortgage brokers duping people should be of concern to the Government.

A situation where you have housing bills that have been before the house for a period of over five years does not portray us as a serious nation interested in the welfare of the citizens.

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Who are the expected speakers and what would be their contributions to the sector?
This year will have one of the most impressive panels. International housing expert, Debra Erb of Overseas Private Investment Corporation, USA, will lead a strong delegation of international speakers and investors to Nigeria. We expect a great impact in the country’s housing and construction industry this year. Through her, the USA has invested over 500 million dollars in Ghana and Kenya. Over 30 speakers from at least 15 countries will be speaking this year.

The speakers who are drawn from reputable institutions like mortgage banks, real estate companies, housing regulatory agencies, construction companies, housing finance firms, etc. are from various countries including USA, UK, South Africa, Kenya, Morocco, India, China, UAE, Ghana, Rwanda, etc. They will speak on this year’s theme which is; ‘’Driving Sustainable Housing Finance Models in the Midst of Global Uncertainty.’’

They include Lew Shulman, CEO and Chairman of The Board, iBUILD Global Incorporated, USA; Kecia Rust, Executive Director and founder of the Centre for Affordable Housing Finance in Africa (CAHF); Anders Lindquist, Founder and President, Business Development at EchoStone housing; Robert Hornsby, CEO of American Homebuilders of West Africa (AHWA); Olivia Caldwell, Principal at the Affordable Housing Institute (AHI); Mounia Tagma, Regional Manager, Affordable Housing Institute, Morocco, and many more. There will also be prominent Nigerian speakers including Agnes Tokumbo Martinsa, a Director at Central Bank of Nigeria; Deji Alli, Chairman and CEO of Mixta Africa; Kehinde Ogundimu, MD of NMRC; Femi Adewole of Family Homes Funds and many more. They would all provide an insight into solving most of the problems that we have mentioned earlier and enable an atmosphere for networking and positive collaborations.

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Festus AdebayoReal Estate
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