Lagos to start allocating houses October

The Lagos State Government (LASG) has reassured prospective home-owners that they will celebrate the next Christmas in their new homes, saying allocation of the houses will start in October.

The state Commissioner for Housing, Gbolahan Lawal, said this after an inspection tour of some of the housing projects in parts of the state on Wednesday.

Mr Lawal said that the initial pre-qualification arrangement toward the allocation of some housing units to beneficiaries had begun.

He listed the estates ready for allocation to include: Phase II of the Oba Adegboruwa Estate, Igbogbo in Ikorodu; Amowo-Odofin Housing Scheme and the Igando Gardens Estate.

The commissioner said, “The Amuwo-Odofin Housing Scheme has 84 units, Igbogbo 2B has 360 units, while the Igando Gardens Estate has 492 units.

For those that applied for those estates, I want to assure them that they are going to celebrate Christmas in those apartments.

He said that the state government had shortlisted some would-be beneficiaries for the Rent-to-Own Housing Policy and the Lagos Mortgage Board was working on perfecting their documents.

“I want to assure you that these estates should be ready before the last quarter of this year,’’ he said.

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Mr Lawal said that the Igando Gardens Estate had 41 blocks of 492 units of one, two and three bedrooms.

He said that the project was 95 per cent completed adding that the sewage treatment plant would be ready for use before October.

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lg.php.gifThe commissioner also said that some of the blocks at the Igando Gardens Estate which was started during the administration of former Gov. Bola Tinubu in 2005 needed rehabilitation.

He added that the state government had to construct a major road leading to the estate to make it more accessible to its would-be occupiers.

“The road has a major challenge for the allotees. The Lagos State Government is fixing the major road that leads into the estate, and that will be an incentive to them.

“It will also ginger us to fix other infrastructure within the estate,’’ he said.

The News Agency of Nigeria (NAN) reports that the Lagos State Government through the Ministry of Housing officially inaugurated the Rent-To-Own and Rental Housing Policies in the state on December 8, 2016.

The scheme targets the provision of housing units to the low and medium income earners in both the formal and the informal sectors.

Under the arrangement, payment for the housing units is staggered over a 10-year period.

During the period, the tenants are allowed to live in the property, while they continue to pay fixed rent toward becoming the owners.

All the estates are part of the Rent-To-Own Scheme of the state government

Premium Times

Federal Mortgage Bank reduces conditions for housing loan

Nigerians above 18 with a steady pay check will now be able to access up to N5 million housing loan from the Federal Mortgage Bank of Nigeria without equity contribution.

This is one of the new conditions for accessing mortgage funds from the bank.

According to a statement by Zubaida Umar, the revised requirements are a 100% reduction in the equity contribution required of beneficiaries.

Previously, beneficiaries had to contribute 10% to access up to N5 million, 20% on N10 million and N30 million to access N15 million.

With the new conditions, an equity contribution of 10% will be needed for funds between N5 and N15 million for contributors to the National Housing Fund (NHF).

Ahmed M. Dangiwa, FMBN managing director, said the reduction is to help more Nigerian workers afford quality housing.

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“I am delighted that we have been able to achieve this groundbreaking feat. It is a huge win for the Nigerian workers and particularly those that contribute to the NHF,” he said.

“It will go a long way towards reducing the financial burden of homeownership that contributors to the fund have been carrying for the past three decades. I am glad that today, we have been able to crash it by over 100%.”

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Oluwaseyi Awojulugbe

Nigeria must address 17 million housing deficit urgently

The Delta State Governor, Dr Ifeanyi Okowa, has called for urgent and concerted efforts by government and private sector to address the housing deficit in the country put at 17 million houses.

Okowa, who stated this on Wednesday at the unveiling of the Governance Villa Housing Estate, Ibusa in the Oshimili North Local Government Area of the state, said aside from meeting the housing needs of Nigerians, there was also a need to provide affordable houses for low-income earners.utr.gif

cap.gifThe governor stated that his administration would continue to partner private investors to meet the housing needs in the state.

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He said, “There is a lot of gap in the nation’s housing sector and the more we provide affordable houses for the civil servants and all Nigerians, the better for our nation.

“With steady efforts, with determination, for every house that is built, we are reducing the housing gap in our nation. My administration will continue to work with the private sector, mortgage finance banks to develop the housing sector in Delta State.”

Mortgage institutions, according to the governor, have a lot of roles to play in encouraging civil servants in particular to own their houses.

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Okowa, accompanied by top members of the State Executive Council, urged private property developers to work with relevant government ministries in designing their building plans to avoid going against the law.

He warned that his administration would not tolerate erection of buildings under high tension or power lines, which he described as dangerous.

The Chief Executive Officer of Delta Trust Mortgage Bank Limited, Mrs Rubby Okoro, commended the state government for providing the enabling environment for the private sector to thrive in the state.

She also appealed to civil servants in the state to utilise the services rendered by the mortgage bank to own their houses.

Theophilus Onojeghen, Warri

Hope Rising for Mortgage Sector

If you’re a Nigerian still agonising about owning your own house because you can’t save enough cash to buy a house and no financial institution is willing to give you a mortgage because you still cannot afford the percentage payment, I have good news for you.

The federal government is set to inject N500 billion into the Federal Mortgage Bank of Nigeria (FMBN) over the next five years in a bid to improve access to mortgage loans and home ownership for Nigerians, thanks to the leadership aggression and innovation of the Ahmed Musa Dangiwa led management of the bank.

Since he was appointed Managing Director of the FMBN, Dangiwa has focused on expanding the capital base of the bank so it could help to fast-track the bridging of the seventeen million housing deficit said to exist in the country. The current capital base of the bank is a miserable N5 billion described by Ahmed Dangiwa as “grossly inadequate.”

The Dangiwa-led management had actively and aggressively promoted stakeholder dialogue on how the FMBN can better serve Nigerians and help to deliver affordable housing to majority of Nigerians.

These efforts led to the bill to review the act setting up the FMBN which has been passed by the National Assembly.

FMBN seeks to boost its capital base from N5 billion to N500 billion at a rate of N100 billion every year, for five years. It therefore expects proposals on its business recapitalisation to be approved by all arms of government by the end of 2018.

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Already, the proposed new capital base of the bank as contained in the its amendment bill has been passed by the House of Representatives and passed to the Senate for concurrence.

The recapitalisation of the bank would give it leverage to go from the 2,500 new mortgages it planned to sign this year to 100,000 over the next two years.

This would also encourage other investors to inject additional funding into the mortgage/housing sector.

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There are currently only 50,000 registered mortgages in Nigeria out of which FMBN holds 18,200.

The additional funding expected to take off by end of this year would certainly increase the number of mortgages.

This August, the bank would flag off a 1,500-housing project it is funding under a new “rent-to-own” programme that would help create more mortgages and access to housing.

Innovation certainly has its reward. Dangiwa has excited the mortgage industry and he and his team are getting the recognition they deserve.

Dangiwa, was recently named 2018 Mortgage Finance Person of the Year in the male category.

The award was presented to the FMBN CEO by the organisers of the Nigeria Housing Awards (NHA).

The organisers stated that the award was in recognition of the ongoing aggressive and innovative efforts of the Dangiwa-led executive management of the FMBN to reform and reposition Nigeria’s foremost mortgage finance institution, so it can more effectively deliver on its mandate to catalyse the provision of affordable social housing to Nigerian workers.

Also, the organisers cited the ongoing N500 billion recapitalisation drive of the bank to boost its capacity to create affordable mortgages which has received federal government and stakeholder wide support.

Other ground-breaking milestones recorded by the FMBN management cited included zero equity contribution for mortgage loans that are N5 million and below, reduction of equity for loans of up to N15 million from 30 to 10 per cent as well as increased tempo in the provision of housing loans to Nigerian workers under the National Housing Fund (NHF).

Responding to the honour, Dangiwa, thanked the organisers for the recognition, but dedicated the award to his team at FMBN for their support, contribution and hard work that is driving the reforms in FMBN.

He also expressed appreciation to the Honourable Minister of Power, Works and Housing, Babatunde Raji Fashola (SAN) and the FMBN Board Chairman, Dr. Adewale Adeoyo, for their continual support.

The NHA is organised by Fesadeb Communications Limited, promoters of one of Nigeria’s biggest annual International housing industry event, the Abuja Housing Show.

On the official website of FMBN, Dangiwa, an architect, is described as “ a consummate, fascinating, inspirational, innovative and resilient administrator with over 30 years of Real Estate, Infrastructure Development, Mortgage Banking and Management experience spanning private and public practices as well as in the academia.”

These qualities were evidently on display in the negotiations leading to the on-going reforms of the bank and the sector. The unanimity among stakeholders on the way forward for the mortgage industry witnessed during the legislative hearings on the bank’s reform bills attests to the leadership skills and team spirit of the man.

Prior to his appointment as the Managing Director/Chief Executive officer of the FMBN, Dangiwa, was the Managing Partner of AM Design Consults, a position he held since 1996, an architectural and real estate development consultancy firm, and Jarlo International Nig. Ltd, a Construction Company, where he supervised the delivery of several outstanding projects in diverse areas and sectors across the country, mainly in real estate development.

He also excelled as a mortgage finance practitioner, rising through the ranks in Sahel Mortgage Finance Limited from a Property Manager to Head of Credit Control to becoming the Manager, Mortgage Banking Division.

In this capacity, he was involved in the design and delivery of wide variety of mortgage products and real estate projects, especially social mass housing.

FMBN has since embarked on an automation project to achieve full automation of the National Housing Fund (NHF) contributions collection process. This is to ensure more transparency and accountability of the system. Each contributor will receive SMS and email alerts of monthly deductions and access historical contributions records online and in real time.

The NHF had funded the origination of more than 18,200 mortgage loans, the delivery of 25,850 housing units across the country, and 11,927 FMBN Home Renovation Loans to federal and State civil servants as well as to employees in the private sector.

According to the FMBN, over the years, the NHF scheme has contended with periods of rejection by workers, but as of today, it has recorded a customer base of 4.6 million individual contributors and 22,290 organisations.

Currently, workers in 28 states complied with the NHF Act by making monthly contributions, while among the non-salaried, informal sector, a total of 21,320 workers had been registered through 1,078 cooperative societies as contributors to the fund.

As things stand today, the mortgage sector has never been more promising.

Abimbola Johnson-Idemeto


FIRS orders banks to freeze accounts of taxpayers 


The Federal Inland Revenue Services (FIRS) has started writing to banks to appoint them as collection agents of taxpayers considered to be in default of tax payments. In order to achieve this, the FIRS is directing the relevant banks to freeze the accounts of the taxpayers to prevent them from drawing funds from the accounts. 

Power to appoint agent 

Section 31 of FIRS (Establishment) Act gives the FIRS powers to appoint a person as an agent of a taxpayer for the recovery of the tax that is payable by the taxpayer. The appointed agent will be required to pay any tax payable by the taxpayer from any money held by the agent on behalf of the taxpayer. 

Practical challenges 

The wording of this provision and the manner in which the FIRS is currently seeking to apply it raise a number of issues: 

  • The provision does not define when ‘tax is payable’ for the purposes of exercising the power to appoint an agent. It would seem that this power can only be validly exercised if an assessment has become final and conclusive under the relevant provisions of the tax laws.
  • The provision neither articulates what must be presented by the FIRS to demonstrate to the agent that the tax is payable nor does it specify the information that the agent can request from the FIRS to confirm that the tax is payable.
    This creates a situation where the FIRS can arbitrarily allege that tax is payable and the agent may feel compelled to withhold a taxpayer’s money even when the tax is under dispute.
  • The impact of the provision on business may be very harsh. For example, an appointment of a bank as an agent effectively freezes the account of a taxpayer up to the amount of the tax payable as alleged by the FIRS. The process of releasing the account may significantly disrupt business activities.

iv. It is not clear how this provision will be interpreted by the court in the light of the provisions of section 42 of the Constitution of the Federal Republic of Nigeria that guarantees a citizen’s right to own property. Under this section, a party must be given an opportunity to defend his property before the property can be taken. 

Is the agent bound by the appointment? 

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The agent is required to pay the money in his possession to the FIRS. However, it would seem that the agent can challenge the appointment if the tax is not payable or if the agent does not have any money belonging to the taxpayer in his possession. 

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The appointment, like all decisions of the FIRS, can be challenged by the agent at the Tax Appeal Tribunal. 


The tax landscape is changing rapidly. Taxpayers must attend to all tax assessments promptly and keep appropriate records of their tax affairs. 

While the power of appointment is a very important tool for the FIRS in recovering unpaid taxes, this power must be exercised with caution and in accordance with the law to avoid negative impact on businesses and ease of paying taxes. 

However, for tax evaders, tax authorities can, where appropriate, explore this tool to recover tax more quickly. 

Moshood Olajide

Elizabeth Anaekwe

Stanley Dike

Jeff Maduka


GPP plans national infrastructure summit

The Global Property Partners, a consortium of firms with diverse interests in real estate and infrastructure development, has concluded plans to hold its second annual National Infrastructure Summit.

The summit, according to the group, is expected to attract leading international and Nigerian professionals in the infrastructure business from across the globe as well as top government functionaries and policy makers

According to the Managing Director/Chief Executive Officer, GPP, Mr Emmanuel Odemayowa, among the highlights of this year’s event, which will hold in Abuja in November, will be the first ‘Infrastructure Award Night’ in Nigeria during which private and public sector professionals as well as institutions that have contributed significantly to infrastructure development in the country will be recognised and honoured.

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He said, “It will focus exclusively on creating avenues that generate sustainable income and wealth through global partnerships as well as serve as a platform for the engagement of global institutional investors for infrastructure development.

“The value of Nigeria’s total infrastructure stock – road, rail, power, airports, water, telecoms and seaports – represents only 35 per cent of the Gross Domestic Product, as against peer emerging market countries’ average of 70 per cent. The issue of infrastructure development in Nigeria cannot be overemphasized till we get it right.”

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Odemayowa noted that several critical issues relating to infrastructure financing and the creation of an enabling environment for infrastructure development were discussed extensively last year and that the organisation of this year’s event in Abuja was to make for a more robust and meaningful exchange of ideas between the public and private sectors on the way forward for this sector in the country.

He said the infrastructure summit was part of the company’s efforts to promote global best practices in the infrastructure sector in the country, given its vast economic potential.

Maureen Ihua-Maduenyi

Garuba: Banks Have Failed in Their Intermediation Role

Mohammed Garuba is one of the founding Partners/Directors of CardinalStone Partners Limited, an Investment Banking Firm. In this interview, he emphasises that foreign exchange and not politics, will be a key determinant in the direction of the Nigerian economy ahead of the 2019 elections. He also expresses dissatisfaction over the delayed appointment of a board for the Securities and Exchange Commission. In addition, Garuba argues that banks have since left their traditional role of financial intermediation. Obinna Chima, GoddyEgene and Nume Ekeghe provide the excerpts:

There is this argument that the events we have seen in the political space in the past few days does not have any effect on the market, while some have said it does. What is your take on that?

There are two ways to approach this. Initially, we all felt it didn’t have any effect and that was because, we were seeing more international investors who understand investing in Africa. And so,on the back of that, what they’ve done was because they understand investing in Africa, they have been able to know that we have this political cycle and they are no longer interested in running away because if they sell at a loss within a short while,they would see everything come back very quickly.

So, instead of us saying it is a political issue per say, their primary focus is that they want to understand the flow of foreign exchange (FX). FX to a large extent is a key determinant for them while political noise is a less important issue. Whether it is in Ghana, Kenya, and South Africa the cycles happen every four years in these jurisdictions, including North Africa. So, that is not the major focus. Their major focus is your FX. Just like we saw in 2015 elections, to a large extent, it was was one of the most volatile. But it didn’t affect our market as much as when we had FX problem that caused a recession, and everything went down. So,we have more economic crisis on the back of FX than on the back of politics. And that starts to show you the strong impact of FX.

As our reserves started going down then, even the local economy, industries and banks were recording losses and it had more catastrophic impact. Right now, especially local banks are doing well. So,the political noise even for locals or even foreigners is not as much as FX. FX for us is key. If politics would have an impact on FX then everyone would start to run.

Whether it is the All Progressives Congress (APC) or the People’s Democratic Party (PDP) government, everybody is promising that they would improve infrastructure and when they say all these things, especially when you announce a huge budget, the concern is how to implement that budget because you would need a lot of FX, especially for your capital expenditure. So, the view right now is, will government be able to implement the budget. We have seen budget implementation of about 40 per cent, so we are estimating a 40 per cent implementation on the capital expenditure side. We have now looked at the FX component of that to see where the external reserves would be at the end of this year. So, the real watch for foreign investors is still not the political space, but how does this whole politics impact on FX.

So, what will you attribute the downturn in the stock market to?

The rhetorics by Donald Trump were largely of him trying to make America great again. People did not see that. But it is a key element in economics because while globalisation is the new world order, a man came and said ‘I want to close my economy,’ which is a complete change from what we understood. And so, what we have tried to see is that as he starts to do this, it is affecting every other economies. So, what do we then do as he is increasing interest rate, which is affecting Europe not just Africa. Monies flew from the US from the last financial crisis in 2008, to emerging markets.

From a risk management point of view, US investors felt there was no need leaving all their monies in US. So, on their own, they started changing their strategy to invest part of these monies outside the US. And then trying to get of the recession, interest rate completely went down to zero per cent. So, if I would get zero per cent or negative returns, why leave my money in the US. So, a lot of monies naturally found their ways out of the US.

And so, a lot of monies it started flowing to emerging markets and then got to frontier markets such as Nigeria and that impacted the Nigerian economy massively.

So, presently, a lot of monies are flowing back to the US and there is empirical data to show all these. Now what is happening is that the whole of Europe, emerging and frontier markets are struggling to breathe.

So, it is not even about the elections. The Nigerian markets lost over seven per cent in May. Seven per cent is small, when you compare that to what is really happening across frontier markets. While it was seven per cent in Nigeria, in Venezuela, it was about nine per cent. The MSCI index which is a key indicator of frontier markets of various countries lost about 10 percent in May alone. Nigeria lost seven per cent and was the second best performing frontier market in the world, while Turkey lost about 17 per cent in one month. So, you find out that we are still doing well. Why only seven per cent? It was because we were still coming out from a recession. So, you see that the real impact is not just that Nigeria is losing, but everybody is losing.

Nigeria’s valuation has gone down, but so is it with every other frontier market. So, there is a positive correlation across other markets and there is a global world order. Stock markets are repricing everywhere. So, while we see a fairly strong half-year results, the stock market is not moving forward because as a country, have failed to develop stock market.

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Between 1999 when we went back to democracy, if you compared the Nigerian stock market to that of South Africa 20 years ago, South Africa was about $500 billion in 1999, but today the market is about $1 trillion. The Nigerian stock market which was over $100 billion, today has reduced to over $40 billion.

The Nigerian market has gone smaller in 20 years. That is because the regulators failed in their primary responsibility to develop the market. Every time foreign investors come into our market, we go up and when they exit, it goes down. That is not a market. A market is built around three core investors: retail which covers roughly 30 per cent of an average stock market; local institutional investors control 40 per cent. So, about 70 per cent is localised and the remaining 30 per cent goes to foreigners.

When the Nigerian Stock Exchange (NSE)publishes data, sometimes you would see foreign investors controlling 50-70 per cent. With that, you do not have a market. We are now seeing regulators wake up. The new Pension Reform Act that has created a tiered system has started trying to solve that problem whereby local institutions must be made to invest in the market one way or the other because you create stability.

What can be done to deepen the stock market on the retail side especially in a country with a population of about 180 million people?

This was why I was drafted to join the Council of the Chartered Institute of Stockbrokers. When I left school, it was a pride to become a chartered stockbroker because it was still a developing career. That I think is the bane of the problem. The institute did not develop and we all started pursuing the stock market, we ignored risks and a few other things. So, I joined the Council and I am heading the Research and Technical Committee and these are some of the things we are handling.

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So, the career did not evolve and that is why you see courses like the Chartered Financial Analyst (CFA) coming to compete with us. Today, you have almost 78 per cent of the total chartered stockbrokers are above 50 years old. And less than 30 per cent are below 50 years. And out of that, only about 18 per cent are below 40 years. We are not grooming young people and the problem started almost 20 years ago.

The Institute of Chartered Accountants of Nigeria (ICAN) for example, would have died, but they saw the Association of Chartered Certified Accountants (ACCA) moved from theory to objective and they started to change their syllabus to compete. But we left the CIS static and we were not dynamic and so not many people were subscribing because they didn’t see stockbroking as a viable career. So, you are straight jacketed and because of that, you have trained many stockbrokers to just know equities and you didn’t train them to learn research. Not until international firms started coming into Nigeria that we started seeing research improve. So, that is the bane of the problem and we only have about 2,000 qualified stockbrokers in the whole country.

So, the more stockbrokers you have, the more you can push awareness. The former Director General of the NSE, Dr. NdiOkereke–Onyiuke tried in her own way to encourage NSE branches around Nigeria which have been shut down now. That wasn’t the best strategy, but at least something was happening. But that was done almost too late and at the peak of the market. And once the market started going down, everything crumbled. So, we have not been able to create enough awareness and we need to sit with the Securities and Exchange Commission (SEC) to come up with a proper strategy. So, when some of this noise were made, SEC came up with a 10–year master plan and even the implementation is way behind with so many extraneous forces. They have written a lot of things and for two years, there is even no board to approve some of those initiatives.

So, there are too any issues in the capital market. A lot of the initiatives are already in the works, but we are behind again. By now, we were supposed to have started introducing investing in primary education in collaboration with the Ministry of Education because it is what people know that they would do. We are also pushing entrepreneurship.

When I graduated about 20 years ago, we were only trained to carry our CV to look for an uncle for a job and you don’t even think you can start a business. The more businesses we start the potential for companies to come and list on the stock exchange. In ten years, we have had only two initial public offers (IPOs), the market is literary dead. We have had a few other public offers – Seplat, while Sahara energy, Interswitch and quite a number of them are waiting on the sidelines to list, but nobody wants to list today. MTN wanted to list but not in this current market environment because they would be mispriced. So, I don’t blame MTN to go quiet because no sensible CEO would allow it. It is not just the right time for MTN. So, since they have not announced it, I know nothing would happen again this year. It just doesn’t make sense.

What are your thoughts about interest rate in the country, compared to other frontier and emerging countries?

Where interest rates are right now are not attractive enough for the risk premium. Right now, we have Fidelity Bank’s Eurobond and if I need to earn 10 per cent in dollars I can get an investment in Nigeria here that would give me 10 per cent in dollars. So, why should I leave my money in naira that is uncertain?

Before, when dollar was doing 11 per cent, naira was doing 20 percent. So, a lot of foreign investors are saying we are investing in frontier markets and it is not as if we like Nigeria. Ghana is doing 18 per cent, their FX is stable and worst case it is hovered around three percent because there’s is manage float system. So, I would invest in Ghana and I’ll still walk away with about 15 per cent return. Congo’s treasury bills rate is up 30 per cent.

In fact,banks such as GTBank, Access Bank, UBA, FirstBank are all in Congo because of this guaranteed interest rate. All their respective audited accounts for 2017, their most successful subsidiary was Congo because they are all making crazy money from the country. So, why would I leave my money here when there are better opportunities in other frontier investors? So, because of that, most of the portfolio money are just going out and Godwin Emefiele is doing a yeoman job. Oil prices have helped a bit, but that is not a long–term strategy. You always need portfolio money and how you use it is very important.

As you release one intervention fund, let’s say the Central Bank of Nigeria (CBN)wants to do N500 billion in agriculture, what we are looking at is the effect on the external reserves. If the Babatunde Fashola is honest to fix all these meters, which I heard another N72 billion is to be released to the Discos, all that money would be converted to dollars and it has to come out of the reserves. So, while we have huge infrastructure deficit, where would that entire dollar come out from to fix some of these things? So, every time they shout ‘development,’ we are looking at the impact on dollars. So, for Emefiele to continue to meet the overall dollar demand, you need to attract foreign investors and so interest rates must remain high.

So, are you insinuating that there might be another dollar crisis in the medium term?

If you observe, even with high oil prices the external reserves have been dropping. Yet, we haven’t started spending for capital expenditure. Almost every week, at the end of the Federal Executive Council (FEC) meeting, they would announce approvals running into billion and all these are from the reserves. While people are happy that they want to grow the economy where is the money going to come from? So, the country needs to raise more Eurobond because if the reserves go below $46 billion, FX speculation may start again. So how we have kept the reserves at $48 billion, people don’t know.

So, while on one hand he is trying to encourage local businesses, it is still not working which is why at the last MPC meeting he was angry that even the CBN would start investing in Commercial Papers (CPs).

With all you have said, you seem to be supporting that the federal government should borrow more. Don’t you think excessive foreign borrowing poses a risk to the system?

Not at all. There is no problem in borrowing. The technique in borrowing is that it must be well structured. For example, if I borrow and it is project tied, like borrowing to fix the rail system it doesn’t matter how I borrow so far it works and people start to pay every day for it, and the cash is coming in. Then, I have solved a major problem. If rails are fixed all those trucks on the road wouldn’t be there anymore. People are buying trucks every day because the Lagos ports don’t serve Nigeria alone. From here, goods are transported to Chad, Niger and other countries. So, if you have a rail system, people would be able to move goods out. Without a rail system, we continue to hear we have minerals in Nigeria, but we cannot mine them because of how to get them to our ports. If you fix rail today, the GDP would double or triple, it would have a ripple effect on so many things.

We are seeing renewed interest in the CP market, what is aiding this trend?

CPs have increased largely because the banks have refused to drop interest rate. Depositors are seeing very low interest rates. So, because of that, banks have failed in their primary intermediation process. Banks in every part of the world are set up to do intermediation, which is collect deposits and then give it out as loans. Since they aren’t giving out monies as loans and doing treasury bills themselves, they have created a new market for commercial papers. CP in any market is a rate higher than deposits rates,but lower than bank interest rates. So, the CP market is getting very viable now because depositors instead of going to banks to deposit their monies are going to the companies to invest in CPs.

So, the more CPs we get, the possibility of banks coming to do their roles of intermediation. When banking consolidation happened was when banks stopped doing their intermediation role because a lot of people were promoted above their competence. There was too much money far more than the competence level of many of the people managing the monies. And this is not trying to belittle any CEO. I was in the bank then and I saw where people were promoted far above their competence. Within the last 15 years, we have not trained real bankers. They have been pursuing money and that is all they know.

So, we failed in banking to do intermediation. Which is why the CP market is the way to go and every one is doing CPs. Even the banks are doing CPs. If I have some bad loans, one way to manage it is to take CPs and use it to reduce it. Every normal company is going to continue to do CPs until banks go back to their intermediation role. People are taking their deposits from banks and investing in CPs at slightly higher rates as opposed to doing fixed deposits with the banks. So, gradually, intermediation is gradually coming into the fore because many of these things are going to the private sector. Dangote did the biggest CP. He has never done that. Before, he would be begging bank CEOs for loans. Before, they would tell you to pay down, year-end is coming and many other things. So, Flour Mills, Nigerian Breweries, Lafarge, Guinness, Wema Bank, Sterling Bank, Stanbic IBTC, everybody is doing it. CP is the new order of the day.

Talking about the capital market, you raised an issue about SEC’s 10–year master plan and the absence of a board. What are the effects on the economy?

Sadly, we need to fix this because you know that once you put people there you would need to give them time to implement strategy. Once you call someone an interim DG there are limits to what that person can do. So, while this DG is competent, she is limited because she doesn’t know what will happen. So, there are many things she cannot start and that delays everybody. We need to take the capital market seriously because it is a structural issue where she has her strategies and she can communicate it properly and she can appraise herself and look at things whether on a periodic basis within her tenure. We already have a master plan strategy so whichever DG comes in, you must take from that master plan and implement your own section. So right now, she is limited in her ability to execute.

This must be fixed very quickly. Sadly, politics has taken over again and we might see this delay till next year so each of this has huge long–term impacts on the market.

You just mentioned politics, how has it affected foreign direct investments (FDIs) right now?

It is affecting because once there is no substantive policy maker in place, FDIs cannot come and negotiate. As a firm, there are quite a lot of people we are trying to bring in, but you are not sure who the substantive Minister of Finance would be by this time next year. So, FDIs are all on standstill and everyone is waiting on the sidelines. The same way FDIs are waiting, is the same way Foreign Portfolio Investors (FPIs) are waiting because companies also cannot list.

Today, companies cannot list, which is another smart way of attracting money in. FDIs usually do PEST (Political, Economic, Social, and Technological) analysis and Nigeria is already failing a lot of things from the first one which is political. By the time the current minister of finance tells you her plans, maybe the next time you want to meet her,she might be doing politics and by the time you finally get a meeting in another two to three months, she might not be there to continue the implementation. So, you start all over again because all the commitment made by this person has changed.

So much policy summersault is affecting FDIs and they are frustrated. A classic example is Procter and Gamble (P&G). It was as if everyone involved in that project was crazy. They invested $400 million in that project and within one year, it was shutdown. These people were sincere, and they did their analysis, they understood the market and committed that amount and now they are literally shutting it down. Now the whole US market has heard, and nobody wants to come and risk that kind of money again. That is a classic case of why FDIs are scared of the policy environment. FPIs are even better, because they can run away easily but FDIs are stuck.

So, your advice is to have policies that would outlive every administration?

Yes exactly. Where I personally think we failed is that in the 70s, we used to have developmental plans where everyone was clear on what was happening. Since the end of the Second Republic, all these things died. Sadly, Buhari took over then and scattered a lot of things and since then, every successive administration even all the vision 2010 and vision 2020 they all failed. Today, we don’t have a master plan. Whether APC or PDP where is that 10–year strategic plan that everybody must take from? So, APC would start their own, PDP may come in and scatter it. Even within a party, former President Obasanjo had great policies, but late President Yar’Adua came in and reversed nearly half of them even though they were from same political party.

Can you tell us about Cardinal Stone, your projection for the company and some investments you done in the past?

CardinalStone was formed in 2008 by four partners who came together. The unique thing is that the four of us have specialties in four different areas of investment. So, it was a very unique association. And then we partnered with a man called Mr. Fola Adeola who founded GTBank. So, he is an investor and also the chairman of CardinalStone. We started at a wrong time when not many people would be starting a business because this was in 2008 in the middle of the financial crisis.

But I had always wanted to be an entrepreneur. I started my career with investment banking and trust company which is now called IBTC, with Mr. Atedo Peterside. Then I joined Zenith as the MD of Zenith Investment arm. I then moved to Renaissance Capital as the pioneer head of equities before we started this company. And we have been able to do very interesting things. Within five years, we became one of the top stockbroking firms in Nigeria till now. On the investment banking side, we are doing quite well. So,we do all the various areas of investment banking; principal investment, asset management, securities trading and private equity.

On investment banking, we are doing quite a lot of transactions. Notable this year, we are the ones helping AMCON to sell Peugeot Automobile. We are also helping them sell Consolidated Discount House. We helped Healthplus, a pharmacy chain by raising $18 million to help them become the number one pharmacy chain. They are now opening over 200 branches around the country and would be the undisputable number one. Now, we are helping FIDSON raise $5.4 billion and the rights issue would start later this month. So, that is the investment banking side.

In asset management, from zero, we have over N100 billion under management. We would be launching our mutual funds later this year.

And then on the principal investment side, because Mr. Fola Adeola would always tell us that ‘you must create long–term value,’ to build sustainable long–term business, invest your profit in real businesses. So, because of that, we went into high growth liquid businesses. We have the biggest cassava farm in Africa called Crest Agro, which is largely to process industrial starch. So, we are growing cassava to ensure we produce starch because the demand is phenomenal. And the most recent business we have done is a data administration business. We also bought a Registrar business, which was formerly CSL Registrars. We also have an archiving business which is unique. It is the biggest single storage factory automated in Nigeria. This year, we just closed a $50 million fund raising. So right now, we are looking for businesses to invest a minimum of $5 million and maximum of $12 million.

Are there any final words for your stakeholders?

I think we should believe in Nigeria, the future is very bright. If we can get our policies right. Our country has tremendous opportunities. We only see opportunities in CardinalStone and that is because we spend a lot of time doing research.


Housing provision: Family Homes Fund comes on stream, targets 1,500,000 new jobs

Against the backdrop of the widening housing gap in the country, new partnerships and initiatives supported by the federal and state governments to address the housing shortfall which is a daunting challenge, are being put in place, thereby raising the hope that governments can actually help provide the over 17 million new homes needed across the country in the next 15 years.

The Family Homes Fund Limited is one of such new initiatives. The Fund is a partnership between the Federal Ministry of Finance and the Nigerian Sovereign Investment Authority as founding shareholders.

The Fund will be the largest affordable housing-focused fund in Sub-Sahara Africa leveraging its significant capital (in excess of N1trn by 2023) to facilitate access to affordable housing for millions of Nigerians on low to medium income groups.

Through strategic partnerships with various players in the sector and some of the world’s main Development Finance Institutions, the Fund has an ambitious commitment to facilitate and supply 500,000 homes by 2023. However, leveraging its capital to support the supply of new homes for families on low to medium income is only a means to an end.

The key priority for the Fund is to take advantage of the opportunity a large scale house building programme offers to create jobs which are sustainable and offer families security, improved quality of life and hope. With a projected cumulative expenditure of up to N1trillion by 2023 into various inputs into house building process including doors, windows, tiles, roofing materials, blocks, paving stones, paint and others, there is opportunity to incubate large numbers of small scale industries that will create significant employment for Nigerians.

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The Family Homes Fund aims to catalyse the creation of new jobs through the investments people make. Alongside investment by other players in the housing sector, there is a real opportunity to achieve impact. Real positive impact on families, women who often carry the biggest burden in poor households and young people. At the national level, this potential if effectively harnessed, could generate up to 1.5 per cent increase to the GDP by 2023.

To make this happen however, the Family Homes Fund Ltd will be by three priorities such as Policy, Partnerships and People. Policy – The Fund aims to support ongoing dialogue around development of a local content framework for inputs into the house building process. A long-term objective is to ensure that up to 80 per cent of manufactured inputs are locally produced. Partnerships – Much more can be achieved collectively than with a single player.

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The Fund aims to build strong partnerships with institutions and agencies to maximise this opportunity. The Fund will work with existing and new partners in the building materials industry, offering where appropriate, guaranteed purchase commitments thus enabling critical access to capital for investment. People – Through the investments we make, the Fund will equip a new generation of young Nigerians with high-level skills in modern methods of construction and technologies.

Through a combination of these activities, the Family Homes Fund aims to create or support up to 1,500,000 jobs by 2023 making a real difference to the quality of life of their families and the economy.

Kingsley Adegboye


How Nigerian mortgage guarantee programme will impact property market

All hands seem to be on deck in bridging the housing deficit in Nigeria, as industry experts polled in a  Business Day survey see the Central Bank of Nigeria’s plan to setup  the Nigerian Mortgage Guarantee Company (NMGC) as a move in the right direction.


This is following the plans by the government of Nigeria to start a mortgage-loan guarantee programme next year in an effort to improve lending to low-income earners and boost home ownership.

This was disclosed by Tokunbo Martins, Director of Banking Supervision at CBN, who said the nation’s government, through the apex bank, is working on a project that will see the start of a firm this year called NMGC, which will be owned by the government and private investors.

To this effect the government has obtained a $25 million loan from the World Bank to run the company, pending equity investments by the owners.

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On how NMGC will impact on the property market in a country with a housing deficit of about 17 million units, industry experts consulted by BusinessDay said the company will make it easier for an average Nigerian to access a mortgage, considering there is now a guarantor.

“Putting a guarantor in place will enable an average Nigerian to access mortgage, and this is going to go a long way in making home ownership in the country much easier,” a property analyst who pleaded anonymity told BusinessDay on phone.

Meanwhile, the plan of setting up this firm by the central bank is to establish a mortgage guarantee product, targeted at lower income borrowers that will be used to guarantee some of the credit risk for this special group of lenders, as a way of boosting home ownership in Nigeria.

Meanwhile, the guarantor is expected to pay a mortgage-loan provider of about 40-50 percent of its losses if a customer defaults.

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Nigeria Mortgage Refinance Company (NMRC), a public limited company whose aim is to refinance mortgages from the capital raised in the market, will probably be the first shareholder of the company, as disclosed by CBN.

Dolapo Omidire, Founder of Estate Intel, a real estate research firm, said it is a start and a good one at that but the amount would not be enough to tackle the deficit in Nigeria. “It is something that can help the mortgage industry, it will make mortgage that is way out of reach for the average Nigerian more accessible,” Dolapo added.

Meanwhile, in February 2018, ‘My Own Home’ scheme targeted at providing improved access to housing finance to aspiring homeowners was unveiled by stakeholders in Nigeria’s property  market and it was domiciled with CBN.

This was also expected to, among other things, provide awareness, education and practical tips to assist prospective homeowners in need of long-term housing finance.

The public-private partnership scheme, according to the stakeholders, has the support of the World Bank, the Federal Ministry of Finance, the Federal Ministry of Power, Works and Housing, Federal Ministry of Justice, Mortgage Banking Association of Nigeria (MBAN), as well as primary mortgage banks through equity stake in NMRC.

Despite the various policies and strategies adopted by the FG aimed at combating the housing problems faced by its citizens, it seems not much has been accomplished, as the current mortgage to GDP ratio in Nigeria is estimated at 0.5 percent, as opposed to 2 percent in Ghana, 31 percent in South Africa, 32 percent in Malaysia, 7o percent in the United States and about 80 percent in the United Kingdom.

As to why Africa’s largest producer of crude oil lags other countries in providing housing for its citizens, CBN linked it to record high interest rates, poverty and lack of proper land deeds, as home loans total about 50,000 in an economy which vies with South Africa as the continent’s largest.

However, stakeholders are optimistic that the end is near for the housing deficit in the country, as they see the various efforts by the government and its various institutions at closing the gap in the long run.

Endurance Okafor

University of Lagos holds international conference on land, development

Given the centrality of land to the development of the nation, and its importance to Lagos State in particular, the Research and Innovation Office of the University of Lagos, Akoka, Yaba in partnership with Centre for Housing and Sustainable Development of the university, has concluded plans to hold International Conference on Land and Development.

The three-day event which is billed to take place in the university between October 24 and 26, has its theme as Land and Development in Lagos.

The sub-themes include Land tenure system; Land valuation, land use historical, political and social evolution; Land development; Spatial data infrastructure and Land administration; and Land management policy and advocacy.

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According to Prof. Rufus Akinyele of the University of Lagos, and the convener of the international conference, the conference will feature exhibitions on the side by interested practitioners and stakeholders in the land use and development value chain which include proprietors of land for sale, housing estate developers, housing plan and mortgage schemes providers, rent-to-own schemes, land reclamation and dredging companies, industrial and mixed use land developers and surveyors and valuers.

Prof. Akinyele who said the conference will equally feature an Honours Award ceremony for sponsors and partners of the conference, disclosed that Governor Akinwunmi Ambode of Lagos State is expected to be the special guest of honour while Senator Gbenga Ashafa will be the guest of honour.

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In his remarks, Prof. Wellington Oyibo of the Research and Innovation Office and Chairman, Local Organising Committee of the conference, said the keynote speakers include Prof. P. C. Nwilo who is the former Surveyor-General of the Federation, Prof. Peter Adeniyi, Chairman, Presidential Technical Committee on Land Use and Land Reforms and Dr. Mika-Petteri Torhonem, Lead Land Administration Specialist of the World Bank.

Kingsley Adegboye


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