Ahead of the inauguration of Asiwaju Bola Ahmed Tinubu as president on May 29, this year, critical stakeholders in the real estate sector have outlined five key actions for him to take in order to boost the all-important sector.
According to the National Bureau of Statistics (NBS), the construction and real estate sectors contributed N20tn to Nigeria’s Gross Domestic Product (GDP) in the first three quarters of 2022.
The GDP report, released by the NBS in 2022, showed that construction services earned N12.9tn while real estate contributed N7tn to the nation’s GDP.
The Chief Executive Officer (CEO) of ABS Blueprint Consortium, a leading real estate and property development company in Abuja, Alhaji Mohammed Yamusa Sulaiman, said already, the market is exhibiting positive signs of a rebound after a lull in activities due to the elections taking centre stage and slowing down economic activities generally.
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Easy access to finance
Sulaiman said making finance easily accessible to developers is crucial to enhancing activities in the sector.
He said, “The issues are mostly about access to finance. If the new government will approach the matter in a more pragmatic way, we have a lot of funds and initiatives to help bridge the housing deficit in the sector. The funds are domiciled with the financiers but accessing them is a herculean task. I think the process needs to be made more seamless.
These funds need not only be available, they need to be easily accessible because there are a lot of reputable real estate companies out there that are willing and have the track record and capacity to execute projects. But you find that with all our track record and capacity, when we try to go out there and access some of these funds it becomes an impossible task.
“All the hurdles you go through, all the benchmarks that they are using, they are either outdated or unrealistic.”
For Barr. Festus Adebayo, Executive Director of Housing Development Advocacy Network (HDAN), housing is critical for economic growth and development because of its impact on major macroeconomic indicators such as employment, savings, investment and labour productivity. It needs urgent and priority attention.
An advocate of affordable housing, Adebayo lamented the current situation where housing is not a part of the top five priority areas, stating that it is appalling as it remains the most compelling index in measuring the growth of the economy in developed countries like America, and not oil as is the case in Nigeria.
He calls for the mortgage system to be strengthened as part of the radical reforms by the new government to make funds easily accessible to Nigerians.
Tackling inflation
The annual inflation rate in Nigeria accelerated to 21.82 per cent in January 2023, the highest since September 2005, and Sulaiman said tackling the hyper-inflation is vital to stabilising the real estate sector and boosting the economy.
“Right now in real estate, we all know how inflation has kicked in; you can do a bill of quantity today and by next week or next month, you find out that that bill is not feasible anymore and those are the kinds of things that you use to commit yourself to the market,” Sulaiman said.
Stabilising foreign exchange
The CEO of ABS Blueprint Consortium also said the volatility in the foreign exchange regime has battered the sector and it would need to be stabilised for it to bounce back and perform better.
He said a lot of materials used in constructing houses are imported hence the need to stabilise the forex regime.
“A lot of building materials are imported and because of the unpredictability of foreign exchange, it becomes difficult for you to make any costing based on realistic figures. That is why you find some developers doing buildings that are semi-finished so that the off-taker will have the liberty to go and finish his or her building as they deem it fit.
“If a developer goes ahead to finish the building you will find out that the prices keep changing,” Sulaiman said.
Private sector-led housing initiatives
For the President of the Real Estate Developers Association of Nigeria (REDAN), Alhaji Aliyu Wamako, the incoming government of Asiwaju Tinubu should initiate private sector-driven housing programmes to boost the economic sector and solve the problem of unemployment in the country.
“The construction sector should be given a firsthand approach by way of making funds available to the construction industry at a single-digit interest rate. I believe that will do the magic and houses will be provided and employment given to the teeming youth of Nigeria,” Wamako said.
Adebayo too collaborated this saying, “The new government must not be involved in the direct construction of housing but instead, collaborate with credible developers with an excellent record of achievements while also ensuring regulation of the real estate practice with the objective of promoting professionalism in the sector.”
Land reforms
Again, both Wamako and Adebayo want radical land reforms that would make access for construction unencumbered, as well as eradicate racketeering which is currently the bane to most genuine developers in the big cities of the country.
The executive director of HDAN also noted that professional inputs are needed in developing designs that reduce cost and conserve land resources.
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