Investors in the Nigerian real estate sector say President Muhammadu Buhari, as he starts the next four years of his presidency, should quickly assure the international community, including private, portfolio and institutional investors, that this time around, Nigeria is open for business
The investors recall that the Federal Government under Buhari has, in the last three and a half years, carried on with the burden of correcting the impression that it is anti-business and this sentiment has prevailed in some quarters of the business community.
Reasons for this impression, according to the investors, are the unfavourable tax policies, the continued delay in signing the Petroleum Industry Bill (PIB) into law to attract private investment into the oil and gas sector, and seemingly punitive and anti-investor policies as reflected in some cases involving government agencies and companies.
“Buhari should reach out to the international community and let them know that Nigeria is open to business. He should set up (or retain) his cabinet very quickly to give clear indication of his intention to work speedily this time around,” Gbenga Olaniyan, CEO, Estate Links, said in an interview.
Buhari was quoted as saying that Nigerians should brace up for a tough time in the next four years and, according to Olaniyan, this sends a wrong signal to both local and foreign investors who may interpret that statement in various ways.
Femi Akintunde, CEO, Alpha Mead Group, agrees, saying “the country needs all the foreign investment it can get”.
“The money circulating in the economy now, which is self-generated, is grossly inadequate, more so as the country is more of a consuming than producing nation,” Akintunde said.
“We are not producing enough for local consumption not to talk of export. So, the more money we get from outside, the better for our economic development. We cannot afford to send a wrong signal to investors both local and foreign,” he said.
Government’s perceived anti-business stance has a lot of implications for the real estate sector, which has remained in recession long after the wider economy exited recession in the second quarter of 2017.
In spite of the role the sector can play in the growth of the economy through job creation and wealth generation, government is not giving adequate attention to the myriad of problems plaguing the sector, especially lack of long-term funds for developers as well as the Land Use Act.
“People will always need houses to live in, and moving to a better home or a better neighbourhood is normal aspiration of most people. So, there will always be demand – latent or active – for real estate.
However, the real estate sector will not thrive in isolation,” said a developer who did not want to be named.
“The Federal Government does not believe in private sector-led economy and therefore may not actively support and encourage wealth creation,” the developer said.
Source: Chuka Uroko