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Leveraging private sector funding for infrastructure development

One of the targets of the Federal Government, as contained in the Economic Recovery and Growth Plan, is to use infrastructure development to build a competitive economy for Nigeria. IFEANYI ONUBAexamines the need to attract private sector funding for critical road and power projects across the country

Nigeria’s strong fundamentals such as natural resources, large market, and young population make it an attractive destination for private sector investment.

However, Nigeria is considered a challenging place to do business because of the difficulties in accessing finance, inefficient bureaucracy, ambiguous and inconsistent regulations, corruption and poor infrastructure.

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The Economic Recovery and Growth Plan intends to tackle these issues in two main ways – by accelerating infrastructure development, specifically power, roads, rail, ports and broadband; and making it easier to do business in Nigeria by improving the legal and regulatory environment, and related processes.

Based on official statistics, the value of Nigeria’ total infrastructure stock (road, rail, power, airports, water, telecoms, and seaports) represents only 35 per cent of the country’s Gross Domestic Product. This is far below the level of peer emerging market countries where the average is 70 per cent.

To optimise the contribution of the sector, Nigeria needs to invest $3tn in infrastructure over the next 30 years according to the National Integrated Infrastructure Master Plan.

The Federal Government cannot provide the resources all by itself. It will be leveraging private sector capital in a variety of ways such as public-private partnerships, special purpose vehicles, investment funds, and various guaranty arrangements.

In these arrangements, government does have a key role to play. One of the plans of the Federal Government is to make strategic use of the Nigerian Sovereign Investment Authority, which manages the national sovereign wealth fund.

In a bid to eliminate the risks of project funding, cost variation and completion that have plagued the development of the nation’s critical infrastructure assets, the Presidential Infrastructure Development Fund was established by the Federal Government for five critical road and power projects across the country.

The PIDF currently being managed by the NSIA with a seed funding of $650m was targeted to catalyse funding for second Niger Bridge, Lagos-Ibadan expressway, East-West road, Abuja-Kano road, and Mambilla Hydroelectric Power.

As of December 5, a total amount of N33bn had been released for the implementation of the second Niger bridge project.

The Managing Director, Nigerian Sovereign Investment Authority, Mr Uche Orji, confirmed the figure while speaking shortly after an inspection of the project.

Orji visited the site with the Obi of Onitsha, Igwe Nnaemeka Achebe, who was accompanied by some of his chiefs.

The second Niger bridge project which is being handled by Julius Berger Plc was awarded in 2014 by the administration of former President, Dr Goodluck Jonathan.

The project which is estimated to gulp about N220bn had been experiencing delays as politicians find it easy to play politics with the implementation of the project, pretending to move to site as elections approach.

It involves the construction of an 11.9km, three lane Greenfield highways as an alternative connection between Asaba (Delta State) and Onitsha (Anambra State), within reasonable distance from the existing Niger Bridge.

The project scope also includes the construction of a full clover-leaf interchange at the Onitsha-Owerri Expressway and additional secondary bridges at the Amakom Village (Delta side) and the Atani Road (Anambra side).

The NSIA’s involvement with the project started in 2014 through its wholly owned subsidiary, NSIA Motorways Investment Company Limited.

However, Orji said the NSIA’s role in the project had evolved with the establishment of the PIDF in 2018. He expressed optimism that the project would not experience further delay.

He said that the private sector funding for the project was being planned to be raised by 2020 through a combination of bond and equity.

The NSIA boss said that the PIDF would eliminate the risks of project funding, cost variation and completion that have plagued the development of the nation’s critical infrastructure assets.

He added that the PIDF programme was an initiative of President Muhammadu Buhari designed to facilitate the rapid completion of key infrastructure projects that had been stalled for years.

According to him, the bridge and roads will be tolled on completion to recoup the money spent in building them.

He said the PIDF with a seed funding of $650m was targeted to catalyse funding for the second Niger Bridge, Lagos-Ibadan expressway, East-West road, Abuja-Kano road, and Mambilla Hydroelectric Power.

According to him, the funding sources for the PIDF include: N585bn from the Nigerian Federation (Federal, State and Local Governments), N97bn from NSIA, N1.5bn from export credit agencies, and N372bn from private investors.

Orji noted that NSIA was working closely with the Federal Ministry of Finance and the Federal Ministry of Power, Housing and Works to ensure proper financing and completion of the projects.

He said, “The PIDF is an initiative of the Presidency conceived to accelerate the execution of critical, strategic infrastructure projects essential to the rapid growth and modernisation of Nigeria’s economy.

“Already, three projects are in construction: Second Niger Bridge: A greenfield construction of an 11.9km, 2×3 lane Greenfield highway connecting Asaba (Delta State) and Onitsha (Anambra State). The project is vital for the development of the region.

“The Lagos – Ibadan Expressway involves the rehabilitation, reconstruction and expansion of that corridor.

“The 127 km highway links the city of Lagos with Ibadan and proceeding onwards to connect the northern region of the country. It is among Africa’s most important roadways.”

On the Abuja-Kano expressway, he said the project entails the modernisation of 370 kilometres of road.

“It is a critical part of the A2, which is a main artery within Nigeria’s transportation grid, enabling the movement of people and products from the north to the south and vice versa,” he said.

On the Mambilla Hydro-Power Project, Orji said it entails a 3050 MW Hydroelectric Power facility located in Sardauna Local Government of Taraba State.

He added, “On East-West road, the Project entails the construction of a 30km dual-carriage way spanning from Oron in Akwa Ibom State through to Calabar in Cross River state. The road will serve as a transit corridor for the movement of heavy equipment for oil exploration and production in the Chad Basin.

“These projects are expected to greatly enhance the prospects of Nigeria’s economic growth and will be undertaken using international best-practices.

“The approach for financing the programme is designed to eliminate risks attributable to funding, cost variation and project completion.

“At completion, it is expected that the investments in these projects will yield returns, which will diversify revenues to States, improve the fiscal sustainability profile of the Federation and ensure Nigeria benefit from modernised Infrastructure for decades to come.”

He said the Authority was pleased with the progress recorded so far on the projects.

The NSIA said, “Leveraging the financing model adopted by government under PIDF, completion-related risks on account of funding have been eliminated.

“Further, the model affords efficiency on project delivery and fund performance while allowing for value engineering which ensures completion at a reasonable cost and within the planned project timeline. It is expected that in the long-run, these investments would help improve Nigeria’s economic growth forecast.”

The PIDF, according to him, is aimed at delivering these five projects that have been stalled for several years.

He said, “Take the second Niger Bridge out of the equation for a minute and look at Mambilla power project which is 40 years in planning. Take a look at the East-West road and quite a number of things.

“It’s a matter of saying let’s have a programme that will go into the heart of these five projects and I think the NSIA is managing that programme and we are very confident that they will come to fruition.”

The Obi of Onitsha in his comments called on the government to ensure the timely completion of the project.

He said the project was strategic to the country as it would further boost economic activities in the region.

He said, “The project has been long in coming. The bridge will transform the way businesses are conducted here. It’s a big thing for Nigeria to complete the project.

“On our part, we will make sure that there is peace all along the routes for the project and if there are any problems, let us know.

“We want to make sure that nothing impedes the project. We will do our part and we hope the government does its own part too.”

He said when completed, the economic impact of the project would be massive in the area of job and wealth creation.

He said, “Compensation for the land acquired should be done. Some people have been dispossessed of their ancestral lands and there is need for them to be settled. But that should not slow down the work.

“The second point is that in terms of opportunities, we want you as much as possible to employ our young men and women in all the areas that are affected who are professionally qualified to perform the jobs.

“This will give them a sense of inclusion because the economic impact will be massive. It will help them support the project and protect it for it to be successful.

He added, “This is a bridge that connects all the parts of the country because it’s a national project. We in Onitsha will benefit because it will reduce traffic in this axis. The project will open up activities for the country.”

The Project Director, Mr Friedrich Weiser, said that the second Niger Bridge was now 15 per cent completed.

He expressed optimism that the project would be delivered by February 28, 2022.

He said about 800 people were currently working on the project with 50 per cent of them employed from the local community

Source: Punch

HOUSING AND EMPLOYMENT IN NIGERIA

If there is any problem the nation is facing today, it is how to gainfully employ her youth population; which are in the millions. The problem of unemployment, which has led to increase in social vices, is becoming monstrous. It is like sitting on a keg of gun powder. Unemployment was the root cause of Arab spring. When Mr President was asked a few weeks ago when his government will start the implementation of the promised N5,000.00 for unemployed graduates, he simply told them that, this was not his government priority; that he planned to concentrate on Power, Agriculture, Infrastructure development and Solid mineral. These areas had always been the area of concentration of successive governments at the expense of housing. There is urgent need for thinking outside the box. The democracy day garden meeting with the learned Vice-President and the road map for economic recovery and development he presented were not pragmatic enough considering the enormity of our challenges.

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Most governments for lack of understanding always put Housing at the end of their shopping list. They tend to believe that it can always be attended to after other needs had been met or when the state can afford it. What a big mistake! Housing is the “gbogbonse” of a depressed economy. A catalyst for growth! When housing is made a priority, other things will fall in line. It is the engine of economic growth. It is the surest basis for the nation’s industrial take off.

No other sector can generate massive employment as housing. An average 3 bedroom flat acquires 10 windows and 10 doors. 10,000 housing units will therefore require 100,000 windows, 100,000 doors and about 50 million blocks. Can anyone imagine the labour requirement to mould 50 million blocks and fabricate these doors and window, including painting, roofing and furnishing? No wonder David Cameron promised to build UK out of recession in 2010. He planned to embark on 270,000 housing units across UK per annum. Milton Keynes – a new town near London; is a living testimony of this radical approach. When there are many construction projects going on, local resources from near and far are mobilised and wealth is created: Infrastructural development will follow automatically. Men and women are busy, poverty and crime are alleviated.

Housing cannot and should not wait. It is now! It should therefore be part of the priority areas in the current budget. The projected 7 (seven) thousand units to be developed this year is very inadequate but a step in a right direction. Please ensure its delivery. It should not be empty promises or business as usual. At the end of this budget year, Government should tell us where these houses were built. Try these and we will begin to witness true recovery. I will equally encourage the Honorable Minister of Works, Power & Housing – Mr Babatunde Fashola to revisit the policy that our team put in place for the nation in 2007; when former President Obasanjo appointed seven of us into the Technical Board of Federal Housing Authority.

A continued neglect of housing sector is already manifesting in the emergence of the militant groups across the country. Nigeria should know that unemployment and poverty were the origin of the Arab Spring.

Source: Professor Timothy Nubi

23 Different Green Building Materials

The aim of using green building materials is to construct energy-efficient structures and to build those structures one should be aware of different green building materials, their properties and how they contribute into saving energy.

Green Building Materials used in Construction

Following is the list of Green building materials used in construction :

  1. Earthen Materials
  2. Wood
  3. Bamboo
  4. SIPs
  5. Insulated Concrete Forms
  6. Cordwood
  7. Straw Bale
  8. Earth Bags
  9. Slate/ Stone Roofing
  10. Steel
  11. Thatch
  12. Composites
  13. Natural Fiber
  14. Polyurethane
  15. Fiber Glass
  16. Cellulose
  17. Cork
  18. Polystyrene and isocyanurate
  19. Natural Clay
  20. Non- VOC paints
  21. Natural Fiber Floor
  22. Fiber Cement
  23. Stone

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1. Earthen Materials

  • Earthen materials like adobe, cob, and rammed earth are being used for construction purposes since yore.
  • For good strength and durability- chopped straw, grass and other fibrous materials etc. are added to earth.
  • Even today, structures built with adobe or cob can be seen in some remote areas.
Adobe made Structure
Fig 1: Adobe made Structure

2. Engineered Wood

  • Wood is one of the most famous building materials used around the world.
  • But in the process of conversion of raw timber to wood boards and planks, most percentage of wood may get wasted.
  • This wastage can also be used to make structural parts like walls, boards, doors etc. in the form of engineered wood.
  • Unlike solid wood, engineered wood contains different layers of wood, usually the middle layers are made of wood scraps, softwoods, wood fibers etc.
Engineered Wood Board
Fig 2: Engineered Wood Board over Solid Wood Board

3. Bamboo

  • Bamboo is one of the most used multipurpose and durable materials used in construction.
  • These trees grow faster irrespective of climatic conditions. So, it makes it economical as well.
  • They can be used to construct frames or supports, walls, floors etc.
  • They provide a good appearance to the structures.
Bamboo Structure
Fig 3: Bamboo Structure

4. SIPs

  • Structural insulated panels (SIPs) consist of two sheets of oriented strand boards or flake board with a foam layer between them.
  • They are generally available in larger sizes and are used as walls for the structure.
  • Because of their large size, they need heavy equipment to install however, they provide good insulation.
Structural Insulated Panel (SIP)
Fig 4: Structural Insulated Panel (SIP)

5. Insulated Concrete Forms

  • Insulated concrete forms contain two insulation layers with some space in between them. This space contains some arrangement for holding reinforcement bars, after placing reinforcement, concrete is poured into this space.
  • They are light in weight, fire resistant, low dense and have good thermal and sound insulation properties.
Insulated Concrete Forms
Fig 5: Insulated Concrete Forms

6. Cordwood

  • If wood is abundantly available and easily accessible to the site of construction, cordwood construction is recommended.
  • It requires short and round pieces of wood which are laid one above the other, width wise, and are bonded together by special mortar mix.
  • They are strong, environmental friendly and also give good appearance to the structure.
Cordwood Wall
Fig 6: Cordwood Wall

7. Straw Bale

  • Straw bale is another green building material which can be used as framing material for building because of good insulating properties. They can also act as soundproof materials.
  • Non-load bearing walls of straw bale can be used as fill material in between columns and, in beams framework is recommended.
  • Since air cannot pass through them, straw bales also have some resistance to fire.
Straw Bale Wall
Fig 7: Straw Bale Wall

8. Earth Bags

  • Earth bags or sand bags are also used to construct walls of a structure.
  • These types of structures can be seen in military bases, near banks of water resources etc.
  • Generally, bags made of burlap are recommended but they may rot very easily and hence, polypropylene bags are used nowadays.
Earth Bag Walls
Fig 8: Earth Bag Walls

9. Slate Roofing

  • Slate is naturally formed rock which is used to make tiles.
  • Slate tiles have high durability and they are used as roofing materials.
  • Slate roofing is preferred when it is locally or cheaply available.
Slate Roofing
Fig 9: Slate Roofing

10. Steel

  • Steel roof panels and shingles are highly durable and they can be recycled again and again. So, these are the best choices for green roofing materials.
Steel Roofing
Fig 10: Steel Roofing

11. Thatch

  • Thatch is nothing but dry straw, dry water reed, dried rushes etc. These are the oldest roofing materials which are still in use in some remote locations of the world and even in cities for aesthetic attractions.
  • It is cheaply available for roofing and a good insulator too.
Thatch Roofing
Fig 11: Thatch Roofing

12. Composites

  • Roof panels made of composite materials such as foam or cellulose layer sandwiched between two metal sheets or two plastic sheets also come under green building materials.
  • They are light in weight, inexpensive and provide good insulation for the structure and save energy.
Composite Roof Panels
Fig 12: Composite Roof Panels

13. Natural Fiber

  • Natural fibers like cotton, wool can also be used as insulation materials.
  • Recycled cotton fibers or wool fibers are converted into a batt and installed in preformed wooden frame sections.
Cotton Insulation
Fig 13: Cotton Insulation

14. Polyurethane

  • Polyurethane foam is available in the form of spray bottles. They are directly sprayed onto the surface or wall or to which part insulation is required.
  • After spraying it expands and forms a thick layer which hardens later on.
  • They offer excellent insulation and prevent leakage of air.
Polyurethane Foam Spray
Fig 14: Polyurethane Foam Spray

15. Fiberglass

  • Fiberglass is also used for insulation purposes in the form of fiberglass batts.
  • Even though it contains some toxic binding agents, because of its super insulation property at low cost it can be considered as a green building material.
Fibergalss batt
Fig 15: Fibreglass batt

16. Cellulose

  • Cellulose is a recycled product of paper waste and it is widely used around the world for insulation purposes in structure.
  • It acts as good sound insulator and available for cheap prices in the market.
Cellulose Insulation
Fig 16: Installing Cellulose Insulation

17. Cork

  • Cork is also a good insulator. Boards or panels made of cork are available in markets.
  • A great amount of electrical energy can be saved by corkboard insulation in winter.
  • These cork boards are also good for sound insulation.
Installing Cork Boards
Fig 17: Installing Cork Boards

18. Polystyrene and isocyanurate

  • Polystyrene and isocyanurate foam sheets are another type of insulation materials which are available in the form of boards or sheets.
  • These are generally provided as insulators on exterior sides of a structure, below the grade etc.
Polystyrene Foam Sheets
Fig 18: Installation of Polystyrene Foam Sheets

19. Natural Clay

  • Plastering of walls can be done using natural clay rather than other gypsum-based plasters.
  • Natural clay plaster with proper workmanship gives a beautiful appearance to the interior.
Natural Clay Plastered Walls
Fig 19: Natural Clay Plastered Wall

20. Non-VOC paints

  • Non-VOC paint or green paint is recommended over VOC containing paints.
  • Presence of Volatile Organic Compounds (VOC) in paint reacts with sunlight and nitrogen oxide resulting in the formation of ozone which can cause severe health problems for the occupants.
  • If non-VOC paint is not available then try the paint with very low-VOC content in it.
Non-VOC Paint
Fig 20: Non-VOC Paint

21. Natural Fiber Floor

  • Naturally occurring materials like bamboo, wool and cotton fiber carpets, cork etc. can be used for flooring purposes.
Natural Fiber Flooring Rugs
Fig 21: Natural Fiber Flooring Rugs

22. Fiber Cement

  • Fiber cement boards are made of cement, sand and wood fibers.
  • For exterior siding, fiber cement boards are good choice because of their cheap price, good durability and good resistance against fire.
Fiber Cement Boards
Fig 22: Exterior Siding with Fiber Cement Boards

23. Stone

  • Stone is a naturally occurring and a long-lasting building material. Some Stone structures built hundreds of years ago are still in existence without much abrasion.
  • Stones are good against weathering hence they can be used to construct exterior walls, steps, exterior flooring etc.
Natural Stone Wall

Source: theconstructor.org

The Major Challenge of Inadequate US Housing Supply

In the last 10 years, since the Great Recession, the economy has expanded greatly, but the housing market still has not recovered. Since 2011, residential housing construction has increased, but only gradually – and not enough to meet demand.

Consider this: from 1968 to 2008, a span of 40 years, there was only one year in which fewer new housing units were built than in 2017 (Exhibit 1)—and this despite rising demand in a growing economy.

In a recent Insight, we examined the demand side of the housing market, focusing particularly on the experiences of young adults. Our research shows that housing costs have been the most significant factor preventing young adults from forming their own households as well as buying a house. Robust demand but weak supply has driven up housing prices rapidly, which in turn is acting as a force to balance demand against supply. Facing higher home prices and rents, many young people are doubling up in shared living arrangements or living at home with their parents.

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In our earlier Forecast, we discussed two main reasons for the lower levels of housing production (relative to population): increase in development costs and shortage of skilled labor.

Home building costs encompass the cost of land and regulatory costs. Since 2010, the cost of land has averaged about 23 percent of total home building expenses.1 But in some markets like San Jose, Santa Ana, Oakland, and Los Angeles, land can cost upward of 70 percent of the cost of building a home. Laws and regulations such as local zoning restrictions on lot sizes and building height and open space designations also increase the cost of building a home, in turn reducing the supply of new homes. Regulatory costs increased 29 percent between 2011 and 2016, the National Association of Home Builders (NAHB) estimates.

On the labor side, the U.S. construction industry is suffering from a shortage of skilled workers. The count of unfilled jobs in the construction industry reached post-Great Recession highs in 2018, the NAHB reports. (See our previous Forecast).

However, other factors are constraining the supply of housing, as well. Opposition to new developments near homes and communities by residents—so-called NIMBYism (Not In My Back Yard)—is restricting new construction in some locales. With young adults flocking to urban areas from suburban or rural areas, housing demand in urban areas is growing, but it takes time to construct housing to accommodate the growing demand

After nearly a decade of low levels of building, housing stock is well short of what the United States needs. In this Insight, we focus on the consequences, rather than the causes. Our analysis shows that 370,000 fewer units were built in 2017 than needed to satisfy demand. Overall, the shortfall ranges from a low of 0.9 million to a high of 4.0 million housing units, as of the second quarter of 2018, depending on the assumptions (see discussion later in this Insight). If supply continues to fall short of demand, home prices and rents are likely to outpace income and household formation will fail to reach potential. The inadequate level of U.S. housing supply is a major challenge facing the housing market in 2018 and likely for years to come.

The current pace of building is not enough to meet demand

In 2017, the United States added 1.25 million additional housing units, which includes homes, apartments, and manufactured homes. But the country needs far more units to meet demand. Adding up all the gross additions to the housing supply and comparing that to the replacement of depreciating stock and the fundamentals of housing demand reveals a large and persistent shortfall in recent years. We estimate that the current rate of demand is approximately 1.62 million housing units per year—370,000 units more per year than the current rate of supply.

Three factors drive the need for housing construction: growing demand from a growing population; the need to replenish existing stock; and the need for vacant units in a well-functioning market. We examine each factor in turn next.

A growing population boosts housing demand

The U.S. population of first-time homebuyers has become younger in recent years. Nearly 90 million residents were between 15 and 34 years old in the United States in 2016, 6 million more than those aged 35 to 54, the U.S. Census Bureau reports. With the age of the median first-time home buyer now at 31 years, these young adults comprise a large share of the first-time home buyer population and therefore drive demand higher.

The result of young adults returning home to live with parents or roommates is pent-up demand for housing. Our research shows that despite demographic shifts and other long-run trends that may reduce household formation rates for the young adult population, the key factors suppressing household formation are associated with housing costs and the labor market. If the economy remains strong and housing costs moderate, then household formation for young adults could significantly increase. We estimated that over the next decade young adults (those aged 15 to 34 in 2016) will add about 20 million households. And those households will need a place to live.

Conceivably, young adults could buy homes vacated by older Americans, but as our February 2017 Insight explains, seniors aged 55+ overwhelmingly prefer to age in place. Better health and education has boosted and extended housing demand from seniors, who are now much slower to transition out of homeownership than prior generations.2 Altogether, we estimate that U.S. net household growth needs to average around 1.1 million households over the next few years to meet the needs of a growing population. Eventually as the Boomers age out of the housing market and young adults are replaced by the smaller Generation Z, the growth in households will moderate somewhat, though the date for that moderation is well into the next decade.

Depreciating stock must be replenished

Over time, housing stock gradually depreciates and therefore must be replaced. The U.S. Census Bureau3 computes the loss rate for U.S. houses, apartments, and manufactured homes based on the age and location of the unit. Estimates from the Census Bureau indicate that the U.S. housing market needs to add approximately 350,000 units per year to replace lost units.4

A well-functioning market needs vacant units

In addition to catering to the growing population and replacing lost units, a well-functioning housing market requires some vacant properties for sale and for rent (classified as “year-round vacant” by the U.S. Census Bureau). Vacant homes increase liquidity in the market, enable prospective buyers to find a match, and give prospective sellers confidence to list their home for sale. Vacancy rates are an important indicator of housing market vitality. Too high of a vacancy rate reflects a moribund

market, while too low of a rate reduces the efficiency of the marketplace. Exhibit 2 shows trends in the vacancy rate for U.S. housing stock. The vacancy rate has declined sharply since 2010, mostly due to lack of inventory.

Growing seasonally vacant units

Many vacant homes in the United States are seasonal units, or vacation homes. About 3 percent of the U.S. housing stock is seasonally vacant. As the housing stock expands, so will the demand for second homes. Second home demand adds up to approximately 100,000 units per year. The National Association of Home Builders has estimated that the stock of second homes increased by 120,000 units per year from 2009 to 2014. With the overall economy continuing to grow and wealthier households doing especially well, we anticipate the demand for second homes to continue at a similar pace in years to come.

Growing year-round vacant units

The trend of year-round vacant properties that are not on the market for sale or rent has also been growing. Part of the reason why year-round vacancies have risen is due to geographic variations in housing demand. Structures are long-lived and can outlast their demand. As the population of the United States has drifted south and west, the populations of many legacy cities in the Midwest and Northeast that once boasted large populations have now declined sharply. If the overall year-round vacancy rate was to remain constant at around 10 percent, then for each 1 million additional households, 111,000 vacant units would need to be added to keep the vacancy rate fixed.

Annual U.S. housing need

Altogether, we estimate that 1.62 million units are needed annually to meet the housing demand: 1.1 million to accommodate household growth; 300,000 units to replace depreciated existing stock; 100,000 to meet the demand for second homes; and 120,000 units to provide enough vacant homes to maintain an efficient marketplace. This estimate is our baseline. Exhibit 3 also presents estimates based on low and high scenarios. There is considerable uncertainty around each assumption and each estimate. Thus, the true level of long-run housing demand is uncertain. However, even the low estimate (1.30 million units per year) exceeds the current rate of housing construction (1.25 million units in 2017)—meaning even under a low estimate, at least 50,000 American households each year can’t buy or rent a home because it hasn’t been built.

How many housing units are needed to match long-term demand?

The preceding analysis accounts for a one-year shortfall, but as noted, residential construction in the United States has been historically weak for almost a decade. If we compare trends over this century, how does the current housing supply compare to our estimates of housing demand? As of the second quarter of 2018, we estimate that the U.S. economy is about 2.5 million housing units below what is needed to match long-term demand.

The U.S. economy is about 2.5 million housing units below what is needed to match long-term demand.

First, we need an estimate of the long-term housing vacancy rate. Based on the previous discussion, we estimate that this vacancy rate should be around 13 percent. The vacancy rate for the United States is 12.3 percent, according to the latest U.S. Census Bureau Housing Vacancy Survey (HVS) (second quarter of 2018). Given a target vacancy rate of 13 percent, it may appear that the housing market is roughly balanced, or perhaps only a little undersupplied. However, this analysis only considers current market conditions and does not account for pent-up housing demand.

The number of U.S. households as of the second quarter of 2018 is about 121 million, according to the Housing Vacancy Survey. To understand the target/ideal numbers of households,5 we need to identify the factors that affect the formation of households (See previous Insight). As discussed in our previous Insight, the following factors impact household formation: housing costs, income, employment, education, marriage and children, race, and geography. Of these factors, our study identified housing costs to be the biggest impediment to household formation, followed by labor market outcomes. The target number of households would be the number of households when we assume there are no constraints from housing costs, or income, or employment. The unconstrained number of households could range between 122.5 million in the baseline scenario and 123.8 million in the high scenario.6

To accommodate a larger number of households and keep the vacancy rate at 13 percent, the housing supply would need to increase by 2.5 million units, expanding from 138.3 million units to 140.8 million units in our baseline, or increase as much as 4.0 million units to 142.3 million units in our high scenario (Exhibit 4). In our low scenario, vacancy rates fall to 12 percent as year-round vacancies fall by 1 percentage point and the housing supply only needs to expand by 900,000 units to 139.2 million units.

To bridge the gap between the current housing supply and future demand, housing construction will need to accelerate. First, the annual gap of 370,000 units currently being undersupplied relative to long-term demand must be filled. Then, the housing market will need to supply excess units for some time to bring the housing stock up to its target level.

Part of the reason the U.S. housing market is so undersupplied is because the areas of the country where employment has grown robustly are also areas where the housing stock is only inelastically supplied (See previous Insight). Even in areas with strong employment growth and long-run elastic housing supply—Texas, for example—shortfalls in skilled construction workers and available lots have prevented the housing supply from expanding rapidly enough in the short run to meet demand. Even in traditionally elastic housing markets, home prices are rising well above long-run averages.

In other parts of the country, particularly in the Midwest and Northeast where population has declined, hypervacancy rates have soared (Mallach 2018; Molloy 2014) and year-round vacancy rates exceed 20 percent.7 These struggling communities have little prospect of an immediate turnaround and contribute to our nation’s long-lasting upward shift in year-round vacancy rates.

Over time, the housing supply in high-growth but elastically supplied areas will expand, but in the interim, housing cost pressures may result in movement toward areas with lower housing costs. If housing demand shifts toward lower-cost housing markets that currently have available housing supply, the long-term vacancy rate could also begin to decline.

Conclusion

The United States is not building enough housing to meet demand. The current annual rate of construction is about 370,000 units below the level required by long-term housing demand. And after years of low levels of building, a significant shortfall has developed, with between 0.9 and 4.0 million too few housing units to accommodate long-term housing demand.

In our latest Forecast, we forecast housing construction to pick up gradually. However, it will still be a year or more before the level of building matches incremental annual long-term housing demand. To bridge the shortfall of total units, the U.S. housing market may need to supply more than 1.6 million units per year.

Until construction ramps up, housing costs will likely continue rising above income, constricting household formation and preventing homeownership for millions of potential households.

Appendix A.1 Calculating the target household level

We estimate the target number of households based on population and headship rates (the number of head of households/total households) using the following equation (eq. A.1.1):

where i = 5-year population age groups from 15-19 to 65+

and hri* = target headship rate of age group i.

We obtain the headship rates for 1994−2018 from the Current Population Survey–Annual Social and Economic Supplement (CPS-ASEC) using the Integrated Public Use Microdata Series (IPUMS) (Flood et al. 2017).

To estimate the target households, we need the target headship rate. We then adjust this headship rate( hr * ) based on the following factors: housing costs, income, and employment (Household Formation Insight). To obtain the contribution of these factors to household formation, we run the Oaxaca-Blinder decomposition on the factors affecting household formation. Based on the contribution of the factors, we add back the factors related to economic conditions such as income, employment, and housing costs because these factors can be considered temporary. Factors associated with sociological changes such as increase in life expectancy, delay in marriage age, and change in educational attainment are considered permanent. Therefore, we exclude them from the calculation of the target headship rate.

Factors associated with sociological changes such as increase in life expectancy, delay in marriage age, and change in educational attainment are considered permanent. Therefore, we exclude them from the calculation of the target headship rate.

For the baseline scenario, we add back housing costs assuming that housing costs become more favorable for household formation. The target headship rate would then be (eq. A.1.2)

where αhousingcost, i is the contribution of housing costs to the total headship rate.

For the high scenario, we assume that housing costs and labor market outcomes both become more favorable and that would improve the prospects of household formation (eq. A.1.3)

where αincome and employment, i is the contribution of labor market outcomes to the total headship rate.

Using the new headship rate, we compute the target households based on the population using eq. A.1.1, arriving at a CPS-ASEC based target household number for the second quarter of 2018.

However, household estimates vary considerably based on the source. Because we use the Housing Vacancy Survey for our analysis of housing supply, we must convert households based on the CPS-ASEC to a series consistent with the estimates from the HVS. To do so, we compute the gap in households between the target and the latest estimate from the CPS-ASEC. Then we apply a multiplier to this gap that is proportional to the gap between the CPS-ASEC and HVS household counts. The CPS-ASEC household estimate for March 2018 was 127.6 million. The HVS estimate for that month was 120.7 million. We deflate our target households by a factor equal to 120.7/127.6, or 0.95.

Based on the target households and the target vacancy rate of 13 percent, we estimate the target housing stock (k*) needed as (eq. A.1.4)

The difference between the current housing stock and the target housing stock k and k* gives us an estimate of the shortfall in terms of housing units to match long-term demand.

Source: FreddieMac

Second Niger bridge to be completed in February, 2022 FG

The federal government says it is committed to ensuring adequate funding of the project – According to the government, the completion of the bridge is the key to unlock the growth and economic development of the entire southeast region The federal government has assured that the N220 billion Second Niger bridge will be completed on or before the scheduled deadline of February 2022.

According to the managing director/chief executive of the Nigeria Sovereign Investment Authority (NSIA), Uche Orji, the federal government is committed to ensuring adequate funding of the bridge project to its completion, Premium Times reports. Legit.ng gathers that Orji, who visited the Obi of Onitsha Nnaemeka Achebe, at his palace on Wednesday, December 5, said the bridge would operate on a tolling system to enable NSIA to repay the money injected by investors in financing its construction.

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He said: “We (NSIA) want to assure you, Your Royal Highness, of steady availability of funding for the completion of the 2nd Niger Bridge by February 2022. The federal government sees the completion of this bridge as the key to unlock the growth and economic development of the entire South-East region. “That is why we solicit the complete support and cooperation with the government of the host communities on both sides of the bridge to provide a peaceful environment to ensure the completion of the project on schedule.”

Igwe Achebe commended President Muhammadu Buhari for his commitment towards the project, adding that people of the southeast geopolitical zone believe that when completed, the bridge would positively impact their economic and social life. Meanwhile, Legit.ng previously reported that the federal government set aside 1.3 billion dollars (about N468 billion) from the National Sovereign Investment Fund to finance five critical infrastructure projects. The disclosure was made on Sunday, September 2, by the minister of information and culture, Alhaji Lai Mohammed. The minister said the five ongoing projects to benefit from the fund included the Lagos-Ibadan expressway construction, the second Niger bridge and the East-West road construction. The other two were the Abuja – Kano expressway construction and the Mambilla power project.

Source: Tunde Osasanya

2019 Real Estate Forecast: What Home Buyers, Sellers And Investors Can Expect

There’s no doubt about it: the 2018 housing market has seen its ups and downs.

The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.

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Will these trends continue? Will housing experience the same wild ride in the new year? Here’s what experts predict will happen in 2019 real estate market:

Mortgage rates will continue rising.

“Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis.” — Aaron Terrazas, director of economic research for Zillow

Millennials will keep buying home — despite those rising rates.

“The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.” — Odeta Kushi, senior economist for First American

“Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages, compared to 17% of Boomers, and 37% of Gen Xers. While first-time buyers will struggle next year, older Millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of Millennials who close in 2019. Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.”- Danielle Hale, chief economist for Realtor.com

Source: Aly J. Yale

Why Nigeria should revert to low-cost housing

The state manages social housing and because it is accessible to low-income earners, it is sometimes called low-cost housing.

Events of the recent past have shown that Nigerians prefer low-cost housing to the conventional housing estates now in vogue. A lot of reasons have been adduced to support the idea of low-cost housing against the conventional or the modern housing estates. One of the reasons is the fact that the houses have the same structure and features, yet, as the name implies, the cost of owning or renting such houses are relatively cheaper compared to what we have now days.

The challenge of housing in terms of quality and quantity appear to be the same all over the world, but in Nigeria, it is more of a complex case. It is the primacy of the housing question that spurred the United Nations to promote the programme of housing for all by the year 2000.

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Good quality housing, as a basic need, is lacking for a sizeable number of Nigerians and so the medium and low income segments of the population, most of who live in urban centres, suffer severe housing crisis. The World Bank, (TWB) had estimated the cost of bridging Nigeria’s then 17 million housing deficit is N59.5 trillion, even though that number is far below the living deficits. This therefore is underlining the vast and untapped investment potential of the country’s real estate sector. One of the continuing challenges posed by unprecedented urbanization in the developing countries is the provision of adequate housing. Over the last three decades, Nigeria, like several developing countries, has emphasised public housing schemes, but with little success. This little success stemmed from the fact that the policy was merely paper tiger that has not been given the serious bite to make impact. This coincides with global paradigm shift from direct public provision of housing to the enablement of private shelter initiatives and housing production.

An enabling environment, including support of housing initiatives and investments by householders, small-scale providers, and entrepreneurial private firms may suffice if we are to look for ways of developing what we may call social housing in Nigeria. The implications of enabling strategy for housing includes; finance, access to land, residential infrastructure, institutional regulations and building materials and related industry particularly in the light of the need for the private sector to play greater roles in housing. The above draw from the aspects of empirical study by various experts that reviewed of housing policy-related issues.

Most empirical studies on poverty, bypass the messy idea that poverty is not just a result of material deficiency, but also of a host of interconnected societal factors that include but not limited to, systemic lack of access to opportunities and decision-making power structures, physical isolation, discrimination, and entrenched cycle of vulnerabilities. Poverty exists because policymakers often address this social pathology with a quick-fix mindset, driven by cold-hearted empirical research. It is not that empirical knowledge of the poor is unnecessary, rather, without compassion as public policy, big data keeps on classifying the poor as a lowly category. Without any real agency of its own, this category is on perpetual life support. However, the fact that more of the estates built these days are for the rich has increased the number housing deficits even with a great number of houses lying unoccupied. This is because some unnecessary features are included in the houses of the rich just because they have access to free funds. These unnecessary features help to add to the finishing costs of the house thereby making it out of reach to the middle or low income earners.

Some houses are finished, mostly in branded areas, and are not occupied due to outrageous rents being demanded by the landlords and/or their agents. There is no law in place to tax vacant properties more than the occupied to encourage occupation and market dynamics. A lot of people have more than one house at no extra cost to them. Nigeria has more than her share of abandoned housing projects due to problematic cash flow. In a country with over 911,000 kilometre square of land mass, oceans, rivers and lagoons are being sand-filled to create housing estates. These and many more cause capital sink. The first house of any man is basic and should be assisted or subsidised. Any other one is investment and should be heavily discouraged through taxation. There must be register of property owners in Nigeria to know each person’s holding capacity.

A house is a basic need that shelters people and gives them comfort. It is a place where people strategise, plan their future, and train their children. It also serves as working and resting place. A house is a status booster and the notion of owning a house bestows confidence on its owners irrespective of class. A house is a common good that every adult who is working, either as a businessman or in paid employment should have. Proper housing can reduce health problems and crime. Since health is wealth, effective property taxation and housing development can be used to redistribute wealth and reduce poverty. This was why the gesture of former Governor of Lagos State, Mr. Lateef Kayode Jakande has continued to be a model for successive governments in Nigeria to emulate. It was on this premises that the Nigeria MortgageRefinance Company (NMRC) was set up as a refinancing vehicle to provide mortgage lending institutions with increased access to liquidity and long-term funds. This is because the ability of banks to deliver mortgage services is limited by the fact that 80 per cent of all bank deposits are for 30 days only. But it seems that housing has a longer gestation period than commercial loans can accommodate. The NMRC therefore, in ensuring greater access to finance for tenure of up to 20 years, was given to accelerate the growth of the mortgage market for all income levels.

Social housing is an umbrella term used to refer to rental housing which may be owned and managed by the state, by non-profit organisations, or by a combination of the two, usually with the aim of making it affordable. Social housing may also be referred to as a public housing which may be a form of housing tenure in which the property is owned by a government authority, be it the Federal, State or Local Government Authority. The state manages it and because it is accessible to low income earners, it is sometimes called low-cost housing. When you talk about social housing for the masses, the words that come to mind are cheap, affordable, non-profit driven, mass produced houses that could be occupied by low income earners, who may wish to save towards eventually buying such houses over time.

Generally, social housing deals with housing solutions that are priced and financed in a way that ensures low-income occupants could satisfy their other basic needs. Even though the scarcity of affordable housing affects all segments of society, it is notably low-income earners who are most affected.

Source: Maduka Nweke

 

Who is to blame for real estate scams in Lagos?

Housing is one of the basic needs of all humans. Over the years, the surge in population of the nation’s commercial centre, Lagos, has assumed exponential proportions. Unfortunately, the provision of urban infrastructure and housing to meet this growing demand is not at commensurate level.

In the real estate business chain, there exists a group of ‘professionals’ that play a big role and due to high demand for their services, many Lagosians have fallen victims of their sharp practices.

Effiong had just moved over to Lagos from Akwa-Ibom, a state in the southern region of the country, and like several young school-leavers seeking the proverbial greener pasture, he was faced with no other option than to stay with a friend who already had an apartment around Iyana Ipaja, a suburb of Lagos.

After a few months, he felt the need to get his own apartment, even if it meant getting a single room where he could rest his head after a stressful day at work. So, he started saving a part of his monthly meager salary. Effiong later approached a roadside house agent who promised to get him a single room apartment in Bariga, a densely populated area in Lagos. After an inspection visit to a one-bedroom apartment and being satisfied with the relatively decent environment, Effiong paid for one year’s rent and was eager to move into his new apartment.

On the day he was to move in, Effiong received the biggest shock of his life. The room already had a new occupant! A visibly angry Effiong approached his house agent to know what had happened. The agent apologised to him and promised to get him an even better apartment. Effiong thereafter requested a refund of his rent, which the agent readily agreed to, but pleaded with him for some time. It’s already six months and Effiong is yet to get either a room or the refund of his money.

Effiong’s experience is just one out of several scams pervasive in the real estate sector — from the small players in the business value chain (roadside agents and caretakers) to the big players, such as private property developers and home builders in the industry.

Femi recalled how his room was burgled few days after he moved into his apartment. All efforts to get a refund from the landlord and his agent earned him a serious beating by touts allegedly sponsored by the landlord who had vowed never to refund his money to him.

Lagosians recently woke up to the news that a cross-section of homeowners at Horizon Premier-1 Estate in Lekki, an upscale part of Lagos, have dragged the Management of Lekki Gardens Estate Limited, and its Managing Director, Richard Nyong, to a Lagos High Court over the alleged distortion of the estate layout to build shops in the space originally meant for a children’s playground, green area and recreation facilities within the estate.

The homeowners, in a suit filed at a Lagos High Court, are demanding an immediate reversal to the original estate layout, which suffered over two years of delay in delivery— a default for which the subscribers are also demanding compensation.

Also, residents in its existing Lekki Gardens estate have complained bitterly about the atrocious state of facilities, and complete lack of maintenance. Some also complained about poor workmanship on some of the buildings, such as cracks on the wall, while some others complained about disjointed pipes.

 Scams in getting access to land and permits

The World Bank, in its Ease of Doing Business Series in Nigeria, ranked Lagos State as the worst place to secure construction permits in the country. The fear of falling into wrong hands and getting fake title documents has forced several people and investors hoping to own a house or build a factory in Lagos, to seek alternative locations such as neighboring Ogun State, to avoid falling into the hands of scammers and street urchins, popularly called Omo-Onile.

The increase in the number of reported cases of sharp practices in the real estate industry has waned investors’ confidence in the sector and out of curiosity, Nairametrics seeks to find out where the fault lies.

Blame Nigerian’s love for cheap things and greedy developers

It is not uncommon to see giant billboards on major highways across Lagos and flyers advertising housing units and lands at mouth-watering discounts and unbelievably low prices, all with the aim to attract buyers.

In an interview with Nairametrics,  Mr. Nnamdi Ijei, Chief Executive Officer of Highrachy Investment & Technology Limited, noted that Nigerians looking to buy property must always carefully seek and patronise professionals in the industry.

“No professional that has his name to protect will involve in any shenanigans or shady deals that will tarnish his image.”

He added that developers should always put into consideration the quality of building materials, the convenience of the structure for homeowners, and its impact on the environment when designing and planning their building.

According to Dr. Opaleye, an occupant in one of the newly built estates in the Lekki area of Lagos, developers are very greedy as most of them fail to deliver on time as promised. More worrisome is the fact that many of them use substandard building materials and even poor workmanship which are often covered with flashy paint coatings and aesthetics to conceal the defects.

“If you visit my house, you will see the poor job done. They don’t even deliver to the initial specification. Some of them will promise you a spacious compound and sporting facilities in the housing units but years after the completion of the house they are yet to construct any sporting facilities in my estate.”

Navigating through the mine field of dodgy real estate agents

Ms. Ellen Abada is an Executive Marketer at a real estate firm and she believes that most people usually ignore the red flags at the initial stage. She noted that real estate is a huge investment and anyone putting down his/her money must have a proper knowledge on how the industry works.

She, however, advised that anyone who wants to rent a room must request to be taken to the landlord of the building to avoid stories that touch, noting that some tenants even sign agreements without considering the future implications of such agreements.

A lawyer, Barr. Makanjuola noted that the Lagos State Tenancy Law 2011 was introduced to regulate the relationship and in particular, the rights and obligations of tenants and landlords under Tenancy Agreements, and the process for the recovery of premises and other related purposes.

He further advocated for proper education before signing any agreement with private developers and advised tenants to approach the Rents Tribunal in the state which is an alternative dispute resolution mechanism to resolve their rents issue.

Source: Fikayo Owoeye

Counting Gains of Infrastructural Development in Osun State

Yinka Kolawole in Osogbo, writes that the Osun State Government under the previous administration, has carried on with its infrastructural development across the state, this time, reaching out to the Osogbo people

Perhaps one of the reasons the immediate last Osun State Governor, Mr. Rauf Aregbesola, has remained in the good books of Osun people is the massive infrastructural development that the state has witnessed since the governor assumed mantle of leadership in November, 2010.

At the twilight of his handing over as governor to the incumbent, Aregbesola commissioned four projects as part of the activities marking his exist in government and handing over to his successor, Governor Gboyega Oyetola.

The commissioned projects were: upgraded Technical College, Oba Sir Adesoji Aderemi East Bypass, Obafemi Awolowo Motorway and
Fakunle/Unity High School, all in Osogbo. Prominent among the projects is the Awolowo Motorway which is the dualisation of 40km Osogbo–Ikirun–Ila odo, Kwara State Boundary. The road construction projects created over 5,000 direct jobs in the state and 12,000 indirect jobs for welders, plumbers and bricklayers, as well as food vendors.

Though quite a number of projects are being undertaken by Osun State Government, but clearly, the flagship project of the massive investment in upgrading of infrastructural amenities in the state in recent months, especially in Osogbo, the state capital, is the dualisation of the 45 kilometer Osogbo-Ikirun-Kwara State Boundary road.

Since the state government signed a N17.8 billion contract agreement with SAMMYA Construction Company Limited for the dualisation of the 45kilometer road, the project segmented into three of Osogbo-Dagbolu (International market) to Alamisi Market in Ikirun (9.52 kilometers); Osogbo (Old-garage) to Ikirun junction road (20.5 kilometers) and Ikirun-Ila Odo- Kwara State Boundary road (16.55 kilometers), the state government has been receiving a lot of commendations from both the people living in the state and road users using the ever busy Osogbo-IIorin road.

In line with the assurance given by the former Special Adviser to the Governor on Works and Transport, Late Engineer Oladepo Amuda, that the project would be completed within 24 months, with the explanation that the project was not the usual direct contract award, but a contractor-financing transaction which came out of the confidence of the contractor in the previous administration and that the money for the contract would be repaid across 36 months after the completion of the project,

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The contractor, SAMMYA Construction Company Limited has not only demonstrated its capabilities in executing the project technical wise, but it has also displayed a rather solid financial war chest that only few construction companies
can boast of, thereby clearing any doubt about the success of the project.

It should be noted that a development financial institution, The Infrastructure Bank Plc (TIB) which is the Transaction Advisor, Fund Arranger and Financier of the project is also working in conjunction with the construction company and other stakeholders to fund the project.

 

The Chairman, SAMMYA Construction Company Limited, Mr Sammy Adigun, at the inception of the project, had not only promised to meet up with the 24 months deadline for the project with the assurance that a lot of hands are being employed to ensure the deadline was not missed, but also revealed that the company had signed a local content undertaking, such that the labour and materials would be sourced locally up to 60 per cent, stressing that the actual target was 90 per cent to provide jobs for the people of the state.

He noted that the promises made had been fulfilled, just as he thanked the outgone governor for the job done, adding that he was happy to be the contractor, as well as development partner in the project.

Adigun added that for executing the project, the administration of Aregbesola has demonstrated its unwavering commitment to fully implementing its aggressive road development plan for the state, which, he said, would facilitate the rapid development of the state.

The MD/CEO of The Infrastructure Bank, Mr. AbdulRazaq Oyinloye, said: “Infrastructure financing in Nigeria has received a significant boost with the innovative financing brought to bear to ensure that the Osogbo-Ilaodo road project is well-funded and completed on-schedule.

“The project is a clear statement of intent by the bank to continue to be at the forefront of attracting urgently-needed capital
into Nigeria’s infrastructure space”.

Commendations

Several months down the line since work commenced on the multi-billion naira project however, opinions of people of the state about the performance of the contractor on the job has been nearly the same, with people praising the technical knowhow that has never been seen in the state before now being employed by SAMMYA in executing the project.

In her remarks after the commissioning, the daughter of the late sage Awolowo’, Rev. Mrs Omotola Oyediran said: We are celebrating an enduring legacy, a legacy that has been through storms, insult and many other challenges.

“Aregbesola has done what Awolowo aimed to do. The dream of Awolowo was to ensure every Nigerian is literate. All what
Aregbesola have been doing is in fulfilment of Awolowo’s dream. Aregbesola’s behavior is similar to that of Awolowo. He has
transformed Osun in spite of the financial and political challenges.
I thank God for Aregbesola’s success.”

Speaking, Prince Aderonmu Aderemi, the son of Oba Aderemi, said Aregbesola is a great man, adding that his projects are unforgettable because they are developmental, adding that, “Aregbesola is the first Nigerian politician to bring back history and honour Nigerian past leaders like Oba Aderemi and Awolowo. Aregbesola has laid wonderful foundation for the progress of the state”.

Commenting on the project vis-a-viz the quality of technology being employed by SAMMYA, a trader at Igbona Market in Osogbo, Madam Sinatu Layoonu, said the contractor SAMMYA has proven it is capable of handling the job with the deployment of brand new machineries for road construction, adding that the workers handling the project have also demonstrated sense of dedication to the admiration of people of the state.

“Many of these machines that SAMMYA workers are using for the construction are new to many of us in Osogbo. They are not only new, but are also very appropriate, at least to some of us, who have never seen such huge construction machines, for the quality of work people of the state are expecting them to deliver. We in deed very grateful to the governor for given such a project to a serious company like SAMMYA”, she said.

Similarly, a shop owner at Ayeitoro area of the state capital, Chuks Ezemokuai, noted that despite the rain, the uncompromising spirit of SAMMYA has ensured work progress steadily on the project.

He added, “when the company initially commenced on the project and the contractor, SAMMYA Construction started work on the road, I, like many others doubted the capability of the construction firm because we were not familiar with that name, but it was not long before we were all proved wrong and SAMMYA won our hearts with the quality of machines and the expertise of its men constructing the road. Indeed, we are pleased with SAMMYA.”

Boost for Indigenes

Speaking on how activities of the contractor handling Osogbo-Ila Odo Kwara Boundary road, SAMMYA, has aided businesses of petty traders especially those that have their shops close to the construction site, Mrs. Beatrice Olawoore opined that many of petty traders have immensely benefitted from the on going project because the construction workers have been patronising them.

She added: “many of us petty traders have benefitted from the presence of SAMMYA’s men on this road because they buy a lot from us ranging from snacks to drinks and stuffs like that, they have aided our business very well. I believe this is part of the gains of this on going construction work, at least if the construction is not going on here, these men will not be around here and our sales would have remained what it was”.

Similarly, answering questions on how the construction work has improved youth empowerment, one of the drivers recruited by SAMMYA from the state, Yunus Adegboyega from Oba Ile, a town in Olorunda local government area of Osun state, explained: “I got a hint that SAMMYA was employing drivers and I approached its office. That was how I got the job.

“The salary is very attractive and there was training for all the workers. Besides empowering us financially, SAMMYA is also
exposing us to skills in our various areas that are very new to many of us. The number of youths from Osun state that have been employed into various departments and sections of the company since the work began on the road is well over 500”.

Corroborating views of

Adegboyega on empowerment, but on a general note, a construction materials supplier based in Osogbo, Francis Fadoyin commended SAMMYA for sourcing construction materials from with in the state.

Fadoyin said business of many construction materials dealers have improved greatly since SAMMYA commenced work in the state capital. “True to the promise of the chairman of the company, when the contract was awarded that, construction materials for the project would besourced locally; the workers are actually sourcing materials from people dealing in the materials in the state. We can only hope this will be sustained and other contractors working on projects within the state will emulate SAMMYA and buy materials from people dealing in them from the state”.

Counting the Gains

While counting the gains of Osun massive investment in infrastructural development vis-a-viz the construction of Osogbo-Ila Odo-Kwara Boundary road, a labour leader in the state, Comrade Kazeem Oladepo challenged administrators in the country to borrow a leaf, not only from the model adopted to finance the project, but also the sheer dedication to duties which he said the contractor has shown in making sure that the work is done to specifications.

Speaking further, the employee of state Ministry of Health, added that the construction of the road has demonstrated the readiness of government to place the Osun in the league of developed states and the choice of SAMMYA, a pointer to the resolve of Aregbesola’s administration to permanently etch his name in the minds of people in the state as a governor that lift the state to enviable heights in terms of infrastructural development.

A traditional ruler, Oba Rauf Adedeji, the Akinrun of Ikirun, the headquarters of Ifelodun local government area of Osun state, one of the towns through which the road transverses, commended both state government and SAMMYA Construction Limited for making the project a good reference point for the development-driven administrators in the country.

For the monarch, the dream to transform the state’s infrastructural amenities as conceived by the then governor was actually being given a life by the contractor handling the project, charging all those involved in the project to ensure that the same vigor with which they commenced the work with is retained throughout the duration of the project.

In his own reaction, the founder of Sword of Spirit Ministry, Eweta, Pastor Israel Wemimo said the major gain the state is recording through the ongoing Osogbo-Kwara Boundary project is in the area of empowerment.

He declared that those youths in Ikirun and adjoining communities, who could not be absorbed by the contracting firm handling the work at the moment, eagerly awaits when the contractor will shift full attention to
the part of the project that traverses the community.

Similar to the view expressed by this clergy man is the one held by Chief Tadese Esuleke of Oloba Compound, Osogbo, who was of the opinion that, besides giving the state a facelift, employment opportunities created through the project and the perceived readiness of the contractor, who he said was not planning to use and dump those employed, but in addition, empower them by given them training in specific vocations, is simply the continuation of youth empowerment efforts of the previous government.

He said: “Many youths in the state, who could not get opportunity in OYES are beginning to turn their attention to SAMMYA, the contractor working on Osogbo-Kwara Boundary road. Honestly, this work is assisting in mopping our streets of these hitherto idle young men. You can call it an indirect way by government and its partner the contractor to empower young ones.”

Speaking on behalf of students’ movement in the state, a former Osun State Chairman of the Joint Campus Committee (JCC) of National Association Nigerian Students (NANS), Comrade Bosede Safety said: “People are saying youth empowerment is one of the gains recorded by the state through the project of Osogbo-Kwara Boundary road but beyond that fact, I think the preservation of lives and properties of the people that will use that road. The rate of accident on that road before this construction work is relatively high. Lives and properties have been lost and that will have to stop now with the expansion and reconstruction work going on.”

Source: Thisday

Lack of supply is driving up property prices in Portugal

An imbalance between demand and supply is continuing to drive strong price growth in Portugal’s residential property market, the latest housing market survey suggests.

A similar picture is depicted in the lettings market, where rents continue to rise firmly on the back of solid tenant demand and falling landlord instructions, according to the October trend report from the Royal Institution of Chartered Surveyors (RICS) and Confidencial Imobiliário.

Overall, new buyer enquiries remained unchanged in October with the net balance coming in at just -2%. This follows a broadly flat underlying trend in demand over the past few months, notwithstanding the 21% net balance reading in September.

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What’s more, enquiries were reportedly flat in all three regions covered in the survey. Likewise, the agreed sales net balance indicator pointed to no change in transactions at the national level, although sales did reportedly rise very modestly across Porto and the Algarve.

The report says that the softer trend in activity is having an impact on the National Confidence Index, a combined measure of near term price and sales expectations, but this indicator still remains comfortably in positive territory at plus 15 in October compared with plus 27 in September but it is the weakest reading in four years.

Meanwhile, the headline new instructions indicator edged further into negative territory in October with a net balance of 27% reporting a fall. Significantly this marks the nineteenth consecutive month in which the supply of properties for sale have declined.

On the back of this, prices continued to rise firmly at the headline level with a net balance of 24% of respondents citing an increase. Expectations for the coming three months have moderated slightly but are still suggestive of further price inflation nonetheless.

In the lettings market, tenant demand continued on an upward trajectory, albeit the pace of growth in the latest results was the softest since February 2016. Alongside this, new landlord instructions declined once again.

As a result, the rental growth indicator continued to point to further gains. Expectations suggest this will persist over the coming three months, the volume of lettings, however, are envisaged to decline in the same timeframe.

‘The key factors driving the market remain the same. The most quoted, however, is regulatory and fiscal instability, which is increasingly affecting investors’ confidence. This is particularly true in Lisbon, where new rules regarding the local lodgement market appear to have had an adverse impact on Lisbon’s Historic Centre (LHC),’ said Ricardo Guimarães, director of Ci.

According to RICS chief economist Simon Rubinsohn, although October’s results suggest momentum has eased somewhat, forward-looking metrics are still suggestive a reasonably solid outlook for the market.

‘Indeed, the macro fundamentals remain strong, which should help provide a positive backdrop for housing market activity in the near term,’ he said.

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