LASG To Partner With Building Professionals On Rising Housing Deficit

The Lagos State Government has sought collaboration with building professionals to tackle rising housing deficit in the state.

The state Commissioner for Housing, Mr Gbolahan Lawal, made the call when he received officials of the Nigerian Institute of Quantity Surveyors (NIQS) and Nigerian Institution of Civil Engineers (NICE) on Monday.

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NIQS and NICE delegations were led by their Lagos State Chairmen, Mr Dele Mafimidiwo and Mr Tokunbo Ajanaku, respectively.

Receiving NIQS executives, Lawal said that the housing deficit in the state had hit three million.

He remarked that the old conventional ways of funding housing projects had become inadequate, hence the need for the expertise of the surveyors.

According to him, the population of Lagos is increasing on daily basis, calling for new ways for faster housing delivery in line with modern technological advancement.

“There is the need for us to be more innovative to fund the demand for affordable housing,’’ the commissioner said.

He said that 5008 housing units in 12 estates were currently under construction across the state.

Lawal added that over 500 housing units have been allotted under the government’s Rent-to-Own Housing Scheme.


Earlier, Mafimidiwo commended the ongoing massive housing projects and other infrastructural projects across the state.

He called for increased engagement of NIQS members in the execution of government projects.

While receiving NICE members, the commissioner sought the support of the engineers to boost the capacity of artisans in the built environment under the state government’s “Master Craftsman Project”.

The project, he said, targets to train 5,000 artisans in five years.

Lawal called for more research into locally-produced building materials to cut cost and reduce influx of foreign engineers.

“We are trying to do a lot to ensure Lagosians are proud home owners.

“Government budget alone cannot fund the projects to bridge our housing deficit and urban infrastructure deficit,’’ he said.

Responding, Ajanaku called for the use of alternative building materials to construct houses throughout the year, irrespective of the season.

He pledged the support of the institution in this direction.

The chairman, however, urged the state government to engage more indigenous civil engineers in its projects.

Kenya to set up mortgage refinancing company to meet housing demand

Kenya is to set up a mortgage refinancing company to help to meet the government’s aim of providing 500,000 houses in five years as well as make it easier for banks to access long-term finance for home loans, the Treasury said.

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The East African country has an estimated 200,000 annual housing shortfall, which is expected to rise to 300,000 by 2020. President Uhuru Kenyatta has said provision of affordable housing is one of his four key priority areas in his second term.

“Housing finance in Kenya remains below its potential,” the Treasury said in a document outlining the creation of the Kenya Mortgage Refinance Company (KMRC), to be owned by the state, commercial banks and financial co-operatives.

KMRC is expected to be licensed by the central bank in February next year, with initial debt financing of $160 million from the World Bank for lending on to financial institutions.
Once it starts operations, the company will raise debt from markets, including mortgage-backed bonds, to lend to banks and financial co-operatives using their mortgage loan contracts with customers as security.

Kenya had just 24,458 mortgage loans valued at $2 billion or 3.15 percent of GDP in 2015, compared with about 30 percent of GDP worth of outstanding mortgages in South Africa.

Lenders, among them KCB Group which has the biggest share of the mortgages, usually shy away from writing housing loans mainly due to lack of long-term deposits in the industry to match them.

The Treasury, which will follow Nigeria, Tanzania and Malaysia in establishing a mortgage refinancing company, hopes KMRC will help to tackle this problem through provision of long term funding to banks.


High interest rates have also been blamed for keeping mortgages out of the reach of many people.

Reporting by Duncan Miriri. Editing by Jane Merriman

Real estate is engine room of a nation’s economy – Aliyu

Musa Dangoggo Aliyu was the former Managing Director of Urban Shelter Ltd and current Chairman of Abuja-based real estate development company,Rural Homes Group Ltd. In this interview, Aliyu expounds on some housing development challenges in Nigeria.

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The Homes Group is developing the Karmo District Market, what is the state of the project?
Karmo Market is presently about 58% completed, the structural works is at completion stage, infrastructures work is ongoing while commissioning of the project is slated for December this year 2018, insha Allah. We are also presently reconstructing the access road and major drainages to the estate as part of our corporate social responsibility.
However, the only impediment is finance; we have gotten two banks, a commercial and a mortgage bank. We have been talking for over a year, we are at the final stage but the issue of legal title is still delaying. The loan we are seeking is lower than what we are targeting. We asked for N2bn but the bank said they are giving us N500m and in tranches, that’s fine but they should give us in time.

What are the components of the market?
The market is sitting on a 10 hectare land with different kind of shops ranging from 4 or 9, 18, or 36square meter open shops which we call farmers market. It has over 2,800 shops, warehouses, cold rooms, meat shops and the segmented market, including the textile (okrika). There are enough parking spaces for 1,200 vehicles with adequate road networks.
This market will be one of the best in Abuja. There is provision for police station, fire service also and utility office for managers of the market including two banks. We are almost roofing some parts and we’re using bricks for the building structure.


What is the level of patronage?
We have sold up to 50% of the market, the favored ones like 4, 9 sqm. We have sold out completely, the bigger ones people don’t take them immediately until the last minute because it’s the rich who can afford them. The smaller ones are available through instalment payment.

What are the hurdles facing developers in accessing housing finance?
It includes high bank interest rates, ineffective mortgage facilities, volatility of the market in terms of purchasing power of subscribers. This affects reasonable estimates on loan repayment period. Also, high level of bureaucracy i.e. passing policies can help the industry, in implementation of said policies assuming it is passed in getting relevant approvals from government agencies.

You have mentioned finance as a challenge, what about securing land?
Yes, especially in Abuja, you either secure allocation or you buy, like this 10 hectares you have to have N2 billion cash if you are to buy, so another option is to enter into agreement with the owners, because I’m not giving them money now, I will double their price or give them houses later, like a barter. It is better because it is a win-win situation for both of us.

How true is the claim that Nigerian banks are supporting the real estate sector?
Even the big banks that I have worked with before are not forthcoming with loans because of what they describe as long gestation period. When we take loan we don’t start to pay immediately, it’s a loan for three years, and to complete a project, you need a moratorium of one year before we start to pay back. Real estate is the engine room of a nation’s economy.
Once the construction industry is working, the benefit for the value chain is enormous, the one constructing the nails, roofing sheets, blocks, cement, granite etc. not to talk of labourers and technicians. So, if government refuse to do something about this, our banks nowadays are not banks, so when they tell you they are giving loans, yes, they are wary, they are giving loans to oil companies that can pay them within three to six months, we call that trading and at the end of the day the money is taken out of the country.

What other sources are then open for developers?
The only way is through increasing your equity or otherwise you resort to using depositors’ funds and with this you have to be very prudent, and plough back the money into the project.

What of offshore funds?
Yes, the only impediment is the bank guarantee, because they don’t know you they would want your bank to give guarantee, and here our banks are also shying away, even with your collateral they will say its dollars so they’re not interested or they will agree and then drag their feet.

Expert Tasks FG, Estate Developers On Affordability Analysis

A value chain expert, Dr Joshua Egbagbe, has urged the Federal Government and estate developers to conduct an off-takers’ affordability analysis before embarking on any housing construction.
Egbagbe, who is also the Chairman, Value Chain Project Consultants Ltd., gave the advice in an interview with newsmen in Abuja yesterday.

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He said the advice became necessary to achieve affordable housing in Nigeria.
Egbagbe noted that housing deficit lingered in the country, after all said and done, due to lack of off-takers affordability paradigm shift which he said was critical in bridging the deficit.
He also said the analysis would enable the housing developers to know the indices of both formal and informal workers in Nigeria, to arrive at their wants and income.

“Through the off-takers affordability paradigm shift, which is the off-takers analysis, the government and developers would be able to know the number and kind of houses to build and who needs intervention.
“With the analysis, no developer will build any house that will be wasted or unoccupied because he is building to a targeted, affordability group.
“In the housing sector, the policies don’t seem to take the people who need the houses (off-takers) into considerations.
“Off-takers should be put at the very centre of housing policies, planning and decision- making processes.
“Right now in Nigeria, there is a big mismatch between the houses that are being built and the individual affordability, otherwise called pocket capacity,’’ he said.
He, however, proposed a paradigm shift which he said would put the off-takers in the centre of planning and policy of housing.

“In every aspect of the value chain of housing, if you do not understand the challenges the off-takers are going through, you will not be able to achieve affordable housing.
“And there will be a dichotomy or discordance between the house and affordability.’’
The expert noted that some workers might not be able to afford six per cent mortgage interest of the Federal Mortgage Bank of Nigeria (FMBN) under the National Housing Fund (NHF) scheme.
According to him, while FMBN fund is at six per cent, the cheapest in Nigeria, the Nigerian Mortgage Refinance Company (NMRC) is refinancing with about 16 per cent to 18 per cent interest rate.

Expert highlights stakeholders’ roles in affordable housing

Maureen Ihua-Maduenyi

The Chief Executive Officer, Northcourt, a real estate investment and research firm, Mr. Tayo Odunsi, has said that for the concept of affordable housing to be effective in the country, all stakeholders must be involved and be genuinely interested in the process.


According to Odunsi, the stakeholders are the government, the private sector, professionals, the community and individuals.

Speaking ahead of the launch of his book on affordable housing, he said a lot of the properties people call affordable were merely those priced lower than the market value but were not necessarily affordable.

He explained, “Affordable housing has long been considered as the solution to meeting the housing demand in the developing world and indeed Nigeria. A lot of people look up to the government and developers for affordable housing and this makes many developers to engage in unwholesome practices.

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“Every stakeholder has a role to play to make affordable housing a reality. The government has a strong role to play as the holder of land; the private sector must also change the mind-set of profit to a social mind-set; while the professionals have a role to play in enlightening their clients and promoting housing career.

“The community, on the other hand, has a part to play by ensuring that houses within the domain remain affordable; while the individual is actually the most important stakeholder because he determines what is affordable to him.”

Odunsi said the book, ‘Affordable: Thinking critically and differently about affordable housing’, which will be launched on May 1, would change people’s perception about housing.

According to him, the book has 41 ideas on affordability and the roles of each stakeholder.

“I believe that this book will serve as a potent tool in the hands of the government, the private sector, professionals, communities and individuals. When everyone aims for homeownership, there will be a problem, but when we have sustainable demand/supply, the prices of houses will crash. These are some of the things the book talks about,” he stated.

Odunsi said the Lagos State Commissioner for Housing, Gbolahan Lawal, delegates from Ogun State and officials of the Nigerian Mortgage Refinance Company, among others would attend the book launch.

‘Land of Honey’ city development broaches new housing deal

A comprehensive new plan unveiled last week to reverse the growing decline in the nation’s housing stock in the Federal Capital Territory, is promising an ambitious new deal for a fresh town project within the Gude district of Abuja.

The scope of the scheme is massive and has the capacity to deliver between 15,000 and 20,000 housing units in different phases over a five-year period.

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Christened Land of Honey City Development (LoH), the promoters and developers, Kohath Housing Corporation (Kohath), has proposed the new town as an innovative and sustainable city solution focused on the live, work and play concept. Kohath is one of the leading players in the municipality development space in Sub-Saharan Africa.

The LoH design is incorporated around a proposed district light rail that required the LoH design to take into consideration the significance of access to requisite services and public transportation in building new communities.

The design provides access to an array of retail outlets, schools, and other services within walking distance, as research shows that living in well-designed, walkable, transit-oriented communities near public transportation can result in a range of significant commercial and health benefits.

The LoH development currently has an asset portfolio of over 900 hectares covered by a bankable certificate of occupancy that is conservatively valued at $180 million, making Kohath one of Nigeria’s largest developers of quality affordable housing.

Kohath’s development strategy will in the long run involve the deployment of the World Bank and International Finance Corporation’s sponsored Excellence in Design for Greater Efficiencies Certification process in building innovative, sustainable, “green” communities as part of Kohath’s Green Development Strategy for improved health, long-term economic and environmental benefits for residents.

Kohath’s transaction structure also includes offtake arrangements for up to 10,000 affordable housing units with the Federal Integrated Staff Housing Scheme (FISH) through the Office of the Head of Service of the Federation and Federal Government Staff Housing Loans Board.

As a means of driving and sustaining the scheme, the company has entered into a collaboration agreement with the Nigeria Mortgage Refinance Company Plc (NMRC), Nigeria’s leading mortgage underwriter.

The partnership agreement will see NMRC and Kohath collaborate towards the provision of project structuring and mortgage advisory for the delivery of a first of its kind city development (located in the Gude district of Abuja).


NMRC Acting Chief Executive Officer, Mr. Kehinde Ogundimu, said that the collaboration presents a huge opportunity to make a difference in home ownership in the Nation’s capital due to challenges that the LoH development will help to resolve.

These challenges include but are not limited to proliferation of dead assets due to titling constraints, access to mortgage loans and the delivery of sustainable, planned, qualitative and affordable housing.

Mr. Ogundimu further noted that the partnership with Kohath presents a huge opportunity for NMRC to support the Federal Government’s housing programmes in providing affordable housing backed by affordable mortgages.

This he said is in consideration of the fact that, of all the challenges currently facing our nation today, very few are more urgent than the deficit of decent housing.
The Executive Chairman Kohath Housing Corporation, Mr. Teni Eleoramo on his part noted that the LoH development and Kohath’s partnership with NMRC could best be described as a value innovation that has been in incubation since 2011.

Eleoramo in his statement noted that the project had successfully weathered the storm of title and legal challenges, survived the arduous business environment of Nigeria and is now ready to deliver its mandate of providing qualitative and affordable housing to Nigerians.

He further stated that While LoH’s building types include a handful of single-family homes, and a large majority of affordable housing development portfolios, LoH also features multifamily apartment homes for mid-income families with supportive services that caters to lifestyle, transform lives and strengthen communities.

The acting CEO of NMRC, Mr Kehinde Ogundimu in his closing statement noted that the Federal Capital Territory Abuja is one of the most expensive housing markets in the country. He further noted that according to available statistics, the minimum annual salary required to purchase a median priced home is more than $30,000 and this price range excludes many hard-working people – from Doctors, Teachers and Public servants – from being able to rent or even own a two-bedroom apartment for their families.

Housing and economic analyst have all noted that without a stable and affordable home, low-income families in Nigeria have little hope of a better livelihood as the availability of housing plays a key role in determining whether they can find well-paying jobs, send their children to school, get quality health services, and access to reliable utilities.

NMRC is a is a CBN-licensed mortgage liquidity facility with the core mandate of developing the primary and secondary mortgage markets. NMRC raises long-term funds from the capital market for mortgage refinancing and by extension promotes affordable housing development and home ownership in Nigeria.

NMRC was incorporated on June 24, 2013 and obtained its final license to operate as a non-deposit taking financial institution from the CBN on February 18, 2015.

Kohath is a wholly owned Nigerian company with business activities in real estate development, mining, agriculture, energy and trading. KIG’s strategic focus includes their aim to positively contribute to the gross domestic product of the countries where they carry out our business operation and derive maximum value for stakeholders.

NNPC invested N100bn in real estate to reduce deficits –Latford

The decision of the Nigerian National Petroleum Corporation (NNPC), to invest a whooping sum of N100 billions in real estate will go a long way in reducing housing deficits in the country.

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Speaking on the huge investment, Mr. Johnson Latford, an independent real estate marketer said that with Nigeria’s current population at 198 million people with urban population growing at an average annual growth rate of about 6.5 per cent, the deficits in accommodation is also increasing.

Chairman of Nigeria Population Commission (NPC), Mr Eze Duruiheoma, revealed this recently in New York, while delivering Nigeria’s statement on Sustainable Cities, Human Mobility and International Migration at the 51st Session of Commission on Population and Development.

Duruiheoma had said that Nigeria remains the most populous in Africa, the seventh globally with an estimated population of over 198 million. “The recent World Population Prospects predicts that by 2050, Nigeria will become the third most populated country in the world.

Over the last 50 years, Nigeria’s urban population has grown at an average annual growth rate of more than 6.5 per cent without commensurate increase in social amenities and infrastructure. It grew substantially from 17.3 in 1967 to 49.4 per cent in 2017. In addition, the 2014 World Urbanisation Prospects report, predicts that by 2050, most of the population – 70 per cent – will be residing in cities.

NNPC Chief Operating Officer (COO) Ventures, Babatunde Adeniran, while disclosing the plan for the maiden edition of NNPC Properties Ltd (NPL) at a Festival in Abuja, said the plan would be honed through commercial opportunities adding that the company has already commenced the recovery of the corporation’s landed properties.

According to him, NNPC Properties Ltd had shifted from the initial lease administration of collecting rents from tenants of the NNPC Properties to “exploring all commercial opportunities available in the real estate market to efficiently position itself as one of the key players of repute that fits the NNPC brand”.


He said the current aggressive commercial drive by the NPL is yielding results as the company had recovered a number of the corporation’s landed property which had been lying idle across the country. He listed some of the recovered property to include: a 92-hectre parcel of land on Chevron Drive, Lekki, Lagos; Royal Grove Estate, Port-Harcourt, and others in Abuja and Kaduna.

He lauded the subsidiary for developing the Third Party Home Ownership Scheme for staff with competitive interest rates from reliable banks and affordable deals from credible developers. Managing Director of the NNPC Properties Ltd, Danny Sokari-George stated that the company was determined to deliver quality and affordable houses with the best funding options and cautioned staff member against frivolous spending to be able to acquire house with ease.

Transforming Nigerian’s urban agenda: Fashola speaks in London

I would like to thank the London School of Economics and Political Science for hosting me once again, and in particular my friend Professor Ricky Burdett, not only for inviting me, but also for the flexibility he demonstrated with his scheduling of this event to accommodate me. That said, I would also like to place on record my personal commendation to Prof. Burdett for his untiring devotion to the issue of urbanisation, and his commitment towards helping to proffer solutions and promote fresh thinking around the issue. I have refused to address urbanisation as either a challenge or a problem. This is deliberate because I see it as the new reality of the human civilization. It is expressed in numbers, often in the hundreds of millions, and I choose to approach it simply as the issue of our existence; and by this, I seek to stress the point that we must see human beings more, and numbers less.

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Therefore if this is about us, what does it portend, and what should we do? First, it is about a growing global population all seeking a better life and in need of access to resources. The issue then manifests itself as a matter of concern to Government and non-Governmental actors, around how to ensure fair and equitable access to food, shelter, energy, transport and employment, to mention a few. The issue of urbanisation also reveals an almost uni-directional migration of us, from rural, semi-urban (and certainly less developed areas of our various communities), to more urban, semi-urban, and comparatively better developed areas. Overcrowding, homelessness, lack of sanitation, traffic jams, unemployment, social disruption, and crime are the problems that follow the issue of urbanisation.

This takes me to what we must do. On a global scale, we must come to one consensus that the size of our human family on the planet is growing at a rate that threatens all of us. If any proof is needed about the global footprint of this threat, recent reports of catastrophic consequences of attempted migrations and very chilling reports of refugee status and 21st Century enslavement of immigrants provide the proof. Those people were migrating to urban centres. Largely they are in pursuit of a better quality of life. Therefore, each family, each local community, state, and nation must act locally to manage the rate of population growth. Indeed, most of the things that need to be addressed as matters of global agreement, such as more food, more water, better mobility, shelter, and access to healthcare and clean energy impose compelling local solutions and actions at family, local, state and national levels. Of course, what each can do is now a function of ability, quality of resource, both human and material, and the complexity of the problem. This takes me to the subject of my speech ‘Transforming Nigeria’s Urban Agenda’ and then perhaps the question that readily comes to mind is: What is Nigeria doing?

In terms of defining the Global Urban Agenda, we have recently been more active and involved than in the last Four decades when the previous global urban agenda were formulated and adopted, first in Canada in 1976 and later in Turkey in 1996. In February 2016, Nigeria hosted the HABITAT III UN Summit in Abuja, Nigeria, which led to the formulation of a common African position which was in Surabaya, Indonesia in July of the same year, and ultimately the accommodation of critical parts of that agenda in Quito, Ecuador in 2017. The commitments captured in the World Urban Forum agenda at Ecuador, under the Aegis of the UN Habitat, with Governmental and Non-Governmental collaboration, speak of course only to global actions. As I have said, results will be defined by local action at family, local, state and national levels. But I say very emphatically that our active participation and Continental leadership roles are positive signs that move the needle of commitment and consciousness further up from what they were four decades ago. One of the critical solutions we identified as a response to making the experience of urbanisation more pleasant was to improve the quality of life, inclusion, and opportunities in the rural areas. President Muhammadu Buhari’s commitment to local Agriculture development capacity has certainly provided the anchor to ground this objective and bring it to reality.

Today, Nigeria is producing more food than in the past, especially food crops like rice and wheat, and in under 36 months, we have a record of 6.3 Milion new rice farmers, mostly living and working in rural areas. Many rural dwellers who used to lease out their land to others to farm have taken to farming it themselves. Government, through other Ministries and Departments, such as Education, Water Resources, Power, Works and Housing, is now intervening with:

1.Provision of water supply schemes and facilities for irrigation and other uses.

2.School feeding and other incentives to get children to school.
3.Identification and reconstruction of roads that lead to, and connect prolific agricultural strongholds in the country, to support the economic aspiration of farmers.

4.Completion of about 2,000 long neglected rural electrification schemes.
5.Formulation of policy and regulation to accelerate deployment of electricity mini grids to stimulate rural access to electricity.

Some emerging results show:
1.90% reduction in rice importation.
2.2 million previously out-of-school children now back in school.

Similarly, the Nigerian Government’s commitment to infrastructure is impacting the rural areas through work creation, economic inclusion, and participation in the construction value chain. In the first instance, most of the materials employed in construction, such as laterite, sand, gravel, limestone, are mined in rural communities, and this is creating economic activities in these areas. Most of the National Road Network Reconstruction now being undertaken in all the 36 States pass through or connect one urban or rural community. During construction, employment opportunities come close to these communities, instead of them travelling to look for work, and on completion, they facilitate mobility. Similarly, the National Housing Project, which is being executed first in a pilot phase to test for acceptability and affordability, as a proof of concept in 33 States, not only responds to the shelter component of urbanisation on a local level, it responds to the economic inclusion component as well. At each of these construction sites, there are not less than 1,000 people engaged as skilled and unskilled labour, complemented by vendors and suppliers. While these actions that I have spoken of address the first strategy of managing the reality of urbanisation by improving the quality of life in the rural areas, there are also interventions that seek to expand the quality of service and opportunities in the urban centres, which are in various stages of implementation. A grand and audacious commitment to connect Nigeria’s major cities by rail is already under implementation with the commencement of work on the Lagos-Ibadan-Kano rail project. As I mentioned earlier, Road Construction and Rehabilitation work is going on in all 36 states. In terms of access to energy, the country had developed its first public energy mix statement that seeks to achieve 30% of renewable energy by 2030. Major hydro-electricity projects are either being aggressively pursued towards completion or imminent commencement, like the 700MW Zungeru, 40MW Kashimbilla, 30MW Gurara, 29 MW Dadin Kowa, all approaching completion, and the 3050 MW Mambilla, whose financing is now under consideration. Government policy and action is stimulating consensus and action towards other sources of cleaner energy like solar. Electric energy production capacity has increased from 5,000 MW to 7,000 MW and Distribution has increased from under 3,000 Mw to 5,000 Mw and work continues to expand these capacities and results are imminent. A revised National Building Code in 2017 also addresses efficient building methods to conserve water, energy, and provide access to services for the most vulnerable members of our urban family. For those who seek housing finance that is not in excess ofN5 million ($13,700), Government policy has been put in place to ease access by removing the requirement for a 10% contribution and instead capitalising this into the periodic re-payment at 6% per annum, through the Federal Mortgage Bank of Nigeria. Ladies and Gentlemen, this is perhaps as much as the time limited for me allows me to share about our commitment towards the urban agenda.

Therefore, I will conclude by answering the question posed about what Nigeria is doing with regard to the urban agenda, by saying that:

1.There is a new consciousness and increased participation in the formulation of the global urban agenda policies by Nigeria.
2.On the continental stage, Nigeria has stood up to be counted and to take leadership by providing the platform to hold policy discussions in Abuja.
3.On the global stage, Nigeria has made her voice audible in Surabaya and in Quito.
4.On the local, state and national stages, Nigeria has followed commitment with policy and action, and remains committed to doing so.

Therefore I feel confident to predict a better future and to visualize better quality of Urbanization realities for the Nigerian people when the fruits of these new consciousness, commitments and action come to the season. I can only imagine how bountiful that harvest will be in terms of the improvements in quality of life. Thank you for listening. REMARKS BY H.E, BABATUNDE RAJI FASHOLA, SAN, MINISTER OF POWER, WORKS AND HOUSING AT THE LONDON SCHOOL OF ECONOMICS PUBLIC LECTURE ON THE THEME, ‘TRANSFORMING NIGERIA’S URBAN AGENDA’ AT THE LSE’S HONG KONG THEATRE , LONDON ON TUESDAY 17TH APRIL, 2018.

How to crash cost of property in Nigeria

Maduka Nweke

Latest indications have shown that the cost of properties in Nigeria may continue to rise amid calls by stakeholders for government to legislate on the sector. Already the laws made to regulate the real estate sector and the entire built environment have remained ineffective. In civilised societies, law guide the practice of real estate. But in Nigeria it is as if the poor is always the target of every law.

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Government has as a tradition of including the housing sector in the yearly budget but once the budget is passed and allocations made, nothing is heard about the sector again until the next budget. Ordinarily, government ought to put in place the means of checking the veracity or otherwise of the budget proposition on the real estate sector. This will spell out what remained to be implemented and what needed to complete it. But this is not the way because the budget has always not been implemented for reasons best known to the authorities.

If government and Ministries, Departments and Agencies (MDAs) utilise the windows they have to aid housing sector, at least civil servants will have their own apartments. If they have their own accommodation, then the efforts of private sectors in providing shelter to the rest of the population through the real estate sector would have made great impact. However, because government failed to execute its roles, it finds it difficult to regulate the sector. A non-regulated programme is like an unorganised party where everyone sits anywhere and does anything he likes. Government’s interference only in promulgating laws in the property sector has remained the greatest handicap of the sector.

Another aspect that has been worsening the cost of properties in Nigeria is lack of infrastructure. If a developer created road that leads to his estate, provided electricity, water, security, recreational facilities, earmarked a large chunk of space for market, waste maintenance space and possibly religious institutions from the land he bought, then it will be impossible for the buyer of the apartment to buy it cheap. The developer will have to factor the cost of all these facilities he put in place into the final selling cost. This definitely would add extensively to the cost of the property. If government creates roads that lead to the estate, provides all those amenities listed above, not only will government regulate it, the developer will have no reason to raise the cost of the buildings.

Government should also release its hold on land because since the major factor in property development is land, the cost of properties will not be low as long as cost of procuring land is high. An instance is the Land Use Charge (LUC). Whether in Lagos State or anywhere in Nigeria, the cost of procuring land for development is always high. Aside land on its own, documents upon documents, which the developer is expected to collect, certification of this and that, provision of this and that by various government authorities are capital intensive. What of Omoniles’ charges that start with clearing of the area, laying the foundation, casting of pillars and decking. The Omoniles charge the cost of decking by the number of floors, yet government cannot protect the developer who has paid all the various charges from the activities of illegal authorities. What of a situation where a plot of land is bought more than three times? Is it possible that Omoniles are stronger than government security that they do not obey government rules or that government connives with them to swindle the public? These are riddles that baffle the public.


The National Housing Funds (NHF) scheme was designed to assist public servants own homes while saving a percentage of their income. The private sector employees were also captured under the Act. Similarly, the government, through mortgage institutions, is expected to provide loans to real estate developers to build low cost houses for the people. Unfortunately, both programmes have not yielded the desired results as houses are still not within the reach of the generality of Nigerians. Indeed, the provisions of the National Housing Fund Act and Federal Mortgage Bank of Nigeria Act are observed more in breach by most stakeholders mandated to perform one responsibility or the other under the laws. The proposed amendments capture virtually everybody including self-employed persons.

The other aspect is the cost of building materials and labour in the country. Most people go to China to import industrial roofing sheets so when they add cost of importation, excise duties and other port charges, the cost of the materials get tripled. Other people who manufacture these materials locally have monopolised the system such that they peg the prices as it suits them. If there are other manufacturers who manufacture some of the building materials, competition will force some of them to drop their prices and that will trickle down to the eventual cost of the property.
For the prices of building materials to crash, government must liberalise the production of building materials and jettison monopoly. As long as monopoly is still in place, there will be no regulation. Cement production has remained a monopoly in Nigeria, iron production is monopolised, wood is open but it is not regulated. Even those that import these materials are severely treated. While some are treated with kid gloves, others are treated as dangerous species. This does not work well in an open market economy.

The Federal Mortgage Bank of Nigeria (FMBN) commenced operations in 1978 following the promulgation of the FMBN Decree No. 7 of January 1977 as a direct Federal Government intervention to accelerate its housing delivery programme. The FMBN is expected to expand and coordinate mortgage lending on a nation-wide basis, using resources from deposits mobilised and equity contributions by the Federal Government and the Central Bank of Nigeria (CBN) at rates of interest below the market rates.

In the past years, FMBN said it has financed the construction of the following estates among others: Suntrust Housing Estate, Lugbe, Abuja; Trademore Mega City Housing Estate, Lugbe, Abuja; Aper Aku Housing Estate, Makurdi, Benue State; Ata-isi Supplies and Services Company Ltd Housing Estate, Cross River State; TMA Integrated Services Ltd Housing Estate, Uyo, Akwa Ibom State; and Honey Fill Construction Company Ltd Housing Estate, Asaba, Delta State.

Others are Ogun State Housing Corporation Housing Estate, Abeokuta; Tola Tos Housing Estate, Odonis Elewa, Bota Village, Ibadan; Liberation Housing Estate, Awka, Anambra State; Unity Garden Estate, Osisioma, Abia State; SY Global Business Links Ltd Housing Estate, Lafiyawo, Tunfure Area, Akko, Gombe State; Adasolid Property Limited, Yola, Adamawa State; Benue Investment and Property Co. Ltd, Nyiman, North Bank Tse-Ayu, Makurdi, Benue State; Delrot Nigeria Ltd Housing Estate, Kulende-Sobi Road, IIorin, Kwara State; and Taraba Investment and Properties Ltd, Jalingo, Taraba State.

The rest are Mamako Investment Ltd, behind Federal Housing, Dong New Layout, Jos, Plateau State; Terraquest Dev. Co. Ltd Housing Estate, KM 13, Banchi-Jos Road, Dungai Village, Bauchi; Lape Construction Company, Juwapye, Ado-Kasa, Karu LGA, Nassarawa State; Ebonyi State Housing Dev. Corporation, Abakaliki, Ebonyi State; El-Tabera Housing Estate, Nsukka, Enugu State; Copen Services Limited (Goshen Housing Estate), Independence Layout Annex, Enugu; and Jubilee Housing Estate, Independence Layout Annex, Enugu. Many of these housing estates are said to have been completed and sold to NHF contributors or are currently under construction. Although the FMBN probably did all the construction, it has not helped to reduce the housing deficits in the country. If it has done, fewer people would be chasing building materials and apartments.

For a lot of these shortcomings, stakeholders in the recent past called for the repeal of the laws establishing the mortgage bank and the creation of another institution that can complement the job of the bank.

Mosquito village: Inside Lagos slum where land is allocated at N2000

Life at Mosquito village, a slum in Lagos state, is disgusting, brutal, weird, ephemeral, yet entertaining. The residents live in the cozy embrace of the filth surrounding them like the walls of Jericho — but life must go on. Their reality is gloomy but with daily doses of jest, they wade through the murky waters of their world. TAIWO ADEBULU, who visited the small community, reports.

That foggy evening, the cloud of filthy smoke enveloped the alley of the sprawling shanties on the swampy piece of land stretching along the shores of a tributary of the Lagos lagoon. As an unknown figure sauntered into their community, the women frying assorted snacks stared frigidly, with curiosity plastered on their faces. With one hand, a restless young woman scooped the buns from the simmering vegetable oil; with the other hand, she wiped the stream of sweats zigzagging across her cleavage.


Narrow is the path, they say, leads to heaven. The road to Mosquito village, a slum in the suburb of Ajegunle in Ajeromi Ifelodun local government area of Lagos state is narrower — but the village is no heaven.

Meandering through the tiny labyrinths, one often comes across little children running helter-skelter across the marshy ground littered with plastics and all kinds of disposables. The houses built with wooden planks are lumped up providing little or no space for ventilation and passage, yet it offered a perfect stage for a hide-and-seek game for the scarcely-clad children.

Surrounded with heaps of refuse, the community of fewer than 2000 residents seems indifferent to the dingy environment they call home. After all, they have shelter and they do not have to pay annual rents to the impatient Lagos landlords. Hence, the land reclaimed from the dark river separating them from Tincan Island Port, Nigeria’s second busiest Port, is indeed a promise land.

Sixty-two-year-old Zachariah Mowojaye, chairman of Mosquito Village, gingerly relayed with graphic details how the settlement came to be. His genteel voice was punctuated by frequent pauses as he adjusted his glasses to speak.

“This place was initially swampy and waterlogged. When Tincan Island Port was being constructed in the late 70s, they filled this place with the soil reclaimed from the lagoon. The federal government probably reserved this place for customs officials to thwart the activities of smugglers in the waterways. After they filled the land, they didn’t use it. They just built a house on it,” he said.

“When Lateef Jakande became the governor of Lagos in 1979 under the Unity Party of Nigeria, he initiated elaborate educational reforms for the poor and he started building neighbouring schools. That was because schools were not enough and the population was increasing.

“So, he came to Tolu a few metres from here and realised that the land was vast and vacant. Then, he jumped on the land at Tolu complex and built about 20 schools. That exposed this area to people. Soon, people who couldn’t afford to pay house rents started moving to the base of this river to build makeshift houses with planks. Later, low-income workers from the port and civil service joined the residents to abate the burden of renting an apartment in town.”

Stating why the settlement was called Mosquito village, Zachariah said the place was bushy when people started moving there.

“So, when outsiders come to visit us, they complain about the high presence of mosquitoes. Really, the mosquitoes were very fat. Even in the afternoon, the mosquitoes go about their business unperturbed. So, when those visitors go out there and people ask them where they were coming from, they tell them that they visited that slum where mosquitoes predominate. That was how the name stuck.

“Now, the mosquitoes do not prevail again because we have fewer bushes and the population has increased. But in some seasons, they troop here like they’ve come for their festival.”
Folorunsho Asogbon, who corroborated Zachariah’s statement, said he was the first person to settle in the area in 1989.

“I only met the mosquitoes here, after which I built my house at the bank of the river. When I came here, the mosquitoes were in their highest population. But now, we no longer feel their impact because they have shared themselves among the growing population,” he said.

Taye Kasali, 50-year-old fruit seller who had been living in the settlement since 2009, said “white men” used to shoot movies at the waterfront.

“We were afraid when we started living here. Some people used to call this place trinity because it was a favourite site for burying the dead. Since the mosquitoes reduced, we’ve been battling with flies.”

According to the United Nations Habitat, 30 percent of the world’s urban population resides in slums, with deplorable conditions where people suffer from several deficiencies. At the 2016 World Habitat Day organised by the Lagos state ministry of physical planning and urban development, Akinwunmi Ambode, governor of the state, said there was the need for additional 187,500 new houses in the next five years to reduce the housing deficit estimated at 2.5 million in the state.

As the cost of house rent is fast increasing in most Lagos metropolis, residents who cannot afford the prices are moving to the slum. Just pay N2000 to miscreants popularly called area boys, who have constituted themselves as omo onile (landowners), then you will be apportioned a space where you can build your house. Failure to ‘settle’ the so-called landowners will result in your house being demolished.

However, with the rising population and the wobbly wooden houses muddled with reckless abandon, an untreated infection can lead to a huge outbreak of diseases, even as the closest hospital is several kilometres away.

Residents of the village practise open defecation, while access to potable water is practically nonexistent.

Some humanitarian agencies, including UNICEF, came to the aid of inhabitants of the community by providing some social amenities. UNICEF provided an eco-friendly toilet which was launched on May 18, 2015. The restroom was built at the base of a mountain of refuse popularly called Bolar. Housing News gathered that the residents didn’t use it for two months before abandoning it. They reverted to defecating in makeshift toilets built at the tip of the lagoon.

Thirty-seven-year-old Sharafa Salami, who has been living in the settlement for eight years, said they stopped using the toilet because it doesn’t give them the luxury of using water.

“We stopped using it because it wasn’t convenient for us. While the toilet doesn’t allow us to use water, we still prefer it to tissue papers. A tissue paper doesn’t clean ‘it’ as much as water. Worse still, you must not throw the paper in the toilet after use. You’ll drop it inside a wastepaper bin and the person in charge of the toilet gets rid of it. We used to pay N20 for a session,” Salami told Housing News.
“This new toilet technology is alien to us. So, we prefer to defecate on this heap of refuse, while those whose houses are closer to the lagoon use the wooden toilets.”

But at night, no one dares climb the refuse to relieve himself, lest he is disposed of his valuables by the lords of the night who take charge of Bolar at night. So, when nature calls, one does it in nylon, keeps it somewhere and waits till morning to discard it.

A damning joint report from UNICEF and World Health Organisation (WHO), released to mark the World Toilet Day in 2012, revealed that estimated 34 million Nigerians have no toilet and practice open defecation. It ranked Nigeria among the top five countries in the world with the largest number of people defecating in the open, a good majority of which comes from Lagos owing to its large population.

In March 2018, another report from WaterAid Nigeria, an international non-governmental charity organisation, said while about 60 million Nigerians do not have adequate access to water, 120 million lack decent toilets and 47 million practise open defecation.


In addition, UNICEF provided a water facility for the residents; this also is no longer in use as the people patronise local water sellers. In the absence of potable water supply, they buy sachet water for drinking.

Badmus Isiaka, a 36-year-old commercial driver, said they couldn’t pump the water because residents were not contributing towards it, hence everyone patronises the services of local water vendors.
“The vendors sell water for us from the water tank in their boats. We don’t know where they get it from, but we have no choice. We do not drink it because it’s not hygienic, but it’s good for domestic use. A keg of water is N10,” he said.

“I have two wives and two children. Sometimes, we use sachet water for bathing. Three kegs hardly last for a day.”

Chichi Aniagolu-Okoye, country director of WaterAid Nigeria, said, “We know that if everyone, everywhere was able to access clean water, decent toilets and good hygiene, then we could help end the scourge of extreme poverty and create a more sustainable future.

While the UNICEF statistics, in Nigeria, estimated that diarrhoea kills about 194,000 children under five every year and in addition, respiratory infections kill another 240,000, which are largely preventable with improvements in water, sanitation and hygiene, most residents of Mosquito village say it is not a source of worry since they hardly fall sick.

“We hardly get sick. Our skins have grown thick to the environment. We know we are poor people, but we enjoy our lives and freedom here,” Zachariah quipped with an aura of resignation.

Yet, the residents have to cope with the noisy activities from the ever-busy port every day as though the clatters of containers and banging cranes were sonorous chirping of nocturnal birds. In the morning, the workers cross the river to the port, while the fishermen delve into the faeces-infested lagoon to catch fishes, which they sell to their neighbours.

“Once in a while, I fish in the lagoon with one of my uncles and we used to catch big fishes, but it depends on the season. We also swim in the water,” Godwin Mowo, a 15-year-old boy, told Housing News.

Residents of the slum cut across different tribes in Nigeria. Prominent among them are the Ilajes, an ethnic group from Ondo state, the Eguns from Badagry in Lagos, Ijaws from the Niger Delta region, Igbo from the south-east region and a handful of Hausas. In the evening, the men gather at the beer parlour to discuss politics and trendy news, while they gently quaff the boozy liquid from the green bottles. Some gather to play drafts, while the lily-livered ones count the scores. The women chat away; some attend to house chores.

However, the many-cornered scenery of clustered houses with the backdrop of tattered clothes provides a sensational adventure for night lovers. As small as the settlement is, sandwiched in-between buildings are churches of different denominations.

“This place used to be the most beautiful place in Ajegunle, until they started dumping refuse here,” Folorunsho recalled with nostalgia.”

Kasali puts it succinctly, “We know our stay here is temporary because it is not our land. We only came here to settle because of our condition. No one really desires a home made of planks.”

According to Folorunsho, they are aware that the land belongs to the government; that’s why none of the residents has a certificate of occupancy.

He said, “Now that they want to turn Lagos to a megacity, we are afraid they might eject us from here and level our homes. I don’t know when it will happen, but I know it will definitely happen.”

While the residents nurse the fear of the unknown, they wouldn’t let the life that fate has plunged them into get the better of them. Hence, they live every day in conscious denial of their world.

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