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UK government to train Gombe youths in skills acquisition

The United Kingdom is to assist Gombe State Government in the areas of skills acquisition and youth empowerment for four years.

Programme Manager Skills for Prosperity of British High Commission, Mr Terseer Nyulaku, said, during a courtesy call on Governor Inuwa Yahaya in Gombe, that the intervention was to ensure that young people acquire valuable skills to make them employable and also create jobs for themselves.

He said the programme being implemented in the six Geo-political zones of Nigeria, had Gombe State representing the Northeast and would be implemented between 2019 and 2023.

“At the end of the day, by the year 2023, we hope to see a number of young people and women employing others in their business,” he said.
Mr. Nyulaku said they had currently started assessing the local economy of the state to enable them come up with skills that would be beneficial to the target groups.

On his part, Deputy Governor, Dr. Manasseh Daniel Jatau, thanked the British High Commission for choosing Gombe State out of the six states in the zone, saying the skills acquisition programme was necessary for the development of the state.

He pledged that his administration had placed emphasis on skills acquisition for unemployed youths, so as to make them productive.
“We have seen a lot of qualifications that are running in the street cannot help themselves. And we believe that skills acquisition is necessary if the state is to develop and the nation at large,” he said.

Buhari reshuffles federal permanent secretaries, accounting officers

President Muhammadu Buhari on Friday reshuffled some Permanent Secretaries and accounting officers in the Federal service following the restructuring /creation of new ministries by the Federal Government.

Recall that President Buhari on Wednesday during the swearing-in of new ministers announced the creation of five new ministries.

The new ministries are Humanitarian Affairs, Disaster Management and Social Development; Police Affairs, Special Duties and International Affairs; Aviation; and Power.

According to a statement issued on Friday in Abuja by Olawunmi Ogunmosunle, Director, Communication, Office of the Head of the Civil Service of the Federation, the circular authorising the reshuffle was signed by Winifred Oyo-Ita.

The statement reads in part, “Further to the creation of new ministries and restructuring of some ministries by President Muhammadu Buhari, the following officers will perform the following functions of accounting officer/permanent secretary.

“The personnel are Daudu Narai – Permanent secretary, Ministry of Special Duties, Louis Edozien – Permanent secretary, Federal Ministry of Power, Mbaeri Nnamdi – Permanent Secretary, Ministry of Police Affairs, Dr Mahmoud Isa-Dutse – Permanent Secretary Ministry of Finance.

“Dr Muhammed Dikwa – Permanent Secretary, Finance (Special Duties), Mr Ernest Umakhire – Permanent Secretary, Finance (Budget and National Planning), Mrs Anagbogu Nkiruka – permanent Secretary, Ministry of Women Affairs, Alh Sabiu Zakari – Permanent Secretary, Ministry of Transport.

“Dr Mohammed Bukar – Permanent Secretary Works and Housing, Hassan Musa – Ministry of Aviation, Director (Air Transport Management) to oversee office of the permanent secretary.

“Anetu-Anne Ajiu, Director, Social Welfare, Ministry of Women Affairs and Social Development, Ministry of Humanitarian Affairs (Director, Social Welfare) to oversee office of the permanent secretary.”

According to Oyo-Ita, the arrangement takes immediate effect and remains in force until further notice.

The Essentials Of Housing Economics: What Is The Measure That Matters?

“When did the housing crisis start?” and “When will we know it is over?” There is no quantitative answer to the first question and therefore no answer to the second. Tenant activists cite eviction data. But that data is diffuse and inaccurate, measuring the small number of tenancies gone wrong rather than housing need. Another unrealistic measure, used by the National Low Income Housing Institute is a ratio of high cost housing to low wages, a measure intended to generate alarm and more subsidies, not solutions. We need a real measure of the problem, and there are examples illustrate the challenge, but in the end, the best measure is price.

The official measure of housing affordability in the United States remains the normative standard that no household should pay more than 30 percent of its gross monthly household income on housing. But what happens when a family is paying 25 percent of its income toward housing but still can’t always come up with rent because of other costs? Does this mean a household paying less for housing is taking someone else’s unit something called “down renting,” and should be paying more somewhere else?

The Housing Cost Income Ratio (HCIR) is a strange and arbitrary measure rooted in the notion that housing should cost no more than a week’s wages, or about 25 percent of gross household income. How was that number set? It has its roots in 19thEuropean social safety net programs and was boosted 40 years ago to 30 percent without much study. Before I suggest an alternative, let’s look at some other efforts to challenge other key economic measures like recession and poverty.

An example I frequently use as an accepted measure of an economic problem is the measure of recession, generally defined as two quarters of negative growth in Gross Domestic Product (GDP). Not everyone likes this definition, especially many antipoverty advocates on the left. At the official end of the last recession in 2009, the Center for Social Inclusion (CSI) created an “impact index” as an alternative measure because,

GDP does not tell us about the difficulty of finding a job, who has health insurance, where the subprime crisis tore neighborhoods apart, or who was best-positioned to weather an economic storm.”

The impact index included measures for housing (affordability, foreclosures, vacancies, subprime lending and building permits), health, measured in terms of insurance coverage, jobs (wages, employment, income sustainability), and a measure they call, civics, a measure including poverty, gross domestic product, and state fiscal health.

I’m not sure I agree with this measure, but what allows for them to diverge from the standard indicator is that a quantitative measure – two quarters of negative GDP – exists in the first place. The CSI measure using other existing measures to give more dimension to the sense that just because GDP figures are up, suffering doesn’t end; it’s more than just anecdotes or finger-on-the-scale reports offered by the National Low Income Housing Institute or the Eviction Lab.

Another example of a measure being refined is the federal government’s official poverty measure developed in the 1960s, a measure of the income needed to buy a “market basket” of consumer products. Most agree the old poverty measure is woefully outdated. Benefits that are supposed to be based on being below the poverty line end up sliding further up the scale (200 percent of the poverty level, for example) to account for the sense that being above the poverty line doesn’t mean a family isn’t poor. The government developed a Supplemental Poverty Measure (SPM) that includes variables for family size, composition, geography, and housing costs. Again, we can argue about whether the SPM is better because there was a measure of what poverty means in the first place.

In the United Kingdom, the Joseph Rowntree Foundation (JRF) has created something called the Minimum Income Standard (MIS). The JRF explains that the “MIS itself is not a measure of poverty, but is what the public has told us is sufficient income to afford a minimum acceptable standard of living.” The point is why try to measure poverty when the problem is income? Prices change based on supply and demand and so do wages; the question is what do people need to sustain what JRF calls an “acceptable minimum standard of living,” something with both quantitative and qualitative elements.

Finally, let’s return to an idea for an alternative to the Housing Cost Income Ratio (HCIR) measure of housing affordability, the Residual Income Model (RIM), a measure based on how much money a family has left over after they pay housing costs. As I pointed out, the HCIR creates more troublesome questions that it resolves while RIM hinges on other costs: If a household pays half its income on housing but can adequately cover other costs there isn’t a problem. Think of a recent college graduate with a monthly income of $1600 living in a small apartment that rents for $800; if she can still cover her other costs and have $50 left over is she in need of a subsidy? Probably not, but the HCIR would dictate she would qualify.

On the other hand a household with two incomes earning twice that amount, $3200 with the same housing costs, $800 or 25 percent of its income would, under HCIR, be doing just fine. The system tries to cure this problem by imposing a cap of 60 percent of Area Medium Income (AMI) so that the larger household with lower relative income could still be eligible for benefits. But the HCIR system doesn’t account for costs other than housing and it calculates eligibility on gross income, income before taxes and other amounts are withheld from paychecks.

All of this together indicates that measures of economic disutility we currently have and even efforts to revise them are inexact at best; declaring a recession over when people still can’t find a job, finding a family just over the poverty line but still struggling for survival, and calculating housing need based on ratios of income to price. How then do we find a way to talk about housing as it relates to growth and the prevailing sense that there is a crisis?

The answer is looking at household income. Looking at residual income and minimum income is a start. I’ve argued in favor here of what Milton Friedman called a negative income tax, a form of guaranteed basic income. But we need a ratio revolution. Affordability is a qualitative measure, not a quantitative one. That is, some people feel a thing is too expensive and others see the utility value of that same thing as worth the price. The Rowntree Foundation is on to something with its measure of a broadly and democratically defined acceptable standard of living, and this could be a guide for a basic income scheme. But the focus should be on income, not a normative ratio of average ranges of income to average price of housing.

If we want to solve housing price problems we shouldn’t use measures that are so inadequate and just measure pain retrospetively; there will always be misdistribution in every economic system and we usually only understand that after it has happened. Instead we should concentrate on an abundance of housing to begin with and income options that would ensure enough supply that when a family is unhappy they have flexibility to make a change. We shouldn’t be trying to measure pain, but trying to avoid as much pain as possible.

Source: forbes

Mobile Money War: Telecoms Threaten Banks’ Future in Nigeria

The future of commercial banks is gradually slipping into the hands of telecommunication companies, and this doesn’t bode well for the Nigerian lenders, as the inroad into mobile money market by network providers is likely to make banks redundant soon. 

Before the entrance of the GSM firms in Nigeria’s telecommunication industry in 2001, having a mobile phone and getting across to people within seconds, no matter how far they were, was something akin to a miracle. They had made the seemingly impossible to become easy. But no matter how much of a feat it had accomplished, no one expected it to grow into an industry capable of making financial payments. Drawing a correlation between network providers and bank functions was far-fetched, but fast track to 2019, and they are now officially recognized as operators of payment service bank (PSB). 

Mobile money is the payment of services or financial transaction between a buyer and merchant through mobile phone. The payment system is also called mobile payment and mobile wallet. Individuals can buy goods and pay for services through the use of USSD code or mobile app.

The quest to bring banking closer to the under-served for financial inclusion has accelerated the value of telecoms firms. The idea of allowing telcos to operate as mobile money service providers had been frowned at in the past, but all that is changing, as Central Bank of Nigeria (CBN) has come to realize that achieving its 80% financial inclusion is impossible without the likes of MTN Nigeria, Airtel, Glo and other telecoms firms.

Banks sentiment 

A handful of bank Chief Executive Officers (CEOs) have talked tough regarding the readiness of commercial banks for the inclusion of telecoms in the mobile money market, however, putting the lenders and telcos side by side, it’s evident that the CEOs will be singing a different tune when this becomes fully operational.

The likes of Ifie Sekibo, Managing Director and CEO of Heritage Bank, Nnamdi Okonkwo, MD/CEO, Fidelity Bank, and some others have all stated that the presence of telecoms in the mobile money service brews no fear. 

Such is expected, as market rivals are known to never speak of themselves as inferior to competitors; but if statistics are anything to go by and with comparison to other market in Africa where mobile money is thriving, banks are gradually heading towards that “inferior” direction if the threat posed by telcos is not handled properly. 

Numbers are against banks 

It would be unwise to bet against telecoms firms in the mobile money market, considering the position they hold and number of subscribers they each possess. While banks had only until recently began to drive traction to their mobile payment platforms, network providers have been building their customer base since their entry into the Nigerian market. 

In the telecoms sector, all network providers account for over 122.2 million subscribers, with interested mobile money operators such as MTN Nigeria and Airtel Africa accounting for 52.2 million and 31.9 million respectively. This is more than the number of customers in GTBank, Zenith Bank, Access Bank, UBA and other banks. The total number of active bank accounts is 72.9 million. 

The subscriber number of Airtel Nigeria is more than the number of app downloads of these banks put together. And when you add MTN, Glo and 9mobile to the list, the chances of the lenders acquiring sizeable market share in the mobile money market become slimmer. 

GTBank, Zenith Bank, Access Bank all have about 1 million downloads, but note that not all downloaders make use of these apps, and having multiple apps for each bank account is stressful, so telcos provide a seamless payment system that doesn’t require multiple accounts or cards. 


While these banks have tried to simplify their transaction processes with USSD codes, the codes are not as popular as the network provider’s USSD among Nigerians. 

History favours Telcos 

The inclusion of telecoms as payment service banks by CBN was encouraged by the rate of financial inclusion success in Kenya. The country’s financial inclusion is pegged at 95%, and this is because of MPesa, Africa’s first mobile money platform. 

MPesa was created by telecoms firm, Safaricom, to close the gap between the under-served and financial transactions. When Saraficom’s mobile money began, there were 3000 ATMs (Automated Teller Machines), but the volume dropped by 1000 because Kenyans no longer visited banking halls to make payments. 

The expansion of Kenyan banks also slowed in response to bank customers’ behavioural changes regarding transactions. Also, account opening dropped, since Kenyans began to prefer using mobile phones to send, receive and store money. But in order not to be devoured by the onslaught of telecoms-sponsored MPesa, the banks in Kenyan drafted an initiative to partner MPesa to stay afloat; that move has paid off well. 

Divide and conquer 

Since the function of banks is not limited to payment or financial transactions, one might think the bank’s relevance is still vital enough to be significant to Nigerians, however, the responsibility of providing loans to customers to help inject capital in the business is not restricted to Nigerian banks only. 

The functions of banks have been split over the years. While network providers only recently received the nod to operate mobile money without loan service, Fintech companies and Venture Capitalists have been offering needed capital to Nigerian businesses especially start ups and have become perfect substitutes of banks for monetary needs; even rating agency, Moody, has argued that commercial banks might soon lose their services to Fintech firms due to their growing popularity.

This division of bank duties has reduced the essence of banks in Nigeria. Their monopoly over payment and monetary transactions has been lessened, and already, the inclination of the middle-class and lower-class towards them regarding loans isn’t favourable. 

In the report of FUGAZ for the year ended 2018, the companies loan to customers dropped except for UBA. GTBank recorded N1.2 trillion in 2018 compared to the N1.4 trillion of 2017. Access Bank also recorded N1.993 trillion in 2018 from the previous year’s N1.995 trillion. Zenith dropped from N1.9 billion to N1.7 billion in 2018. While this drop in some quarters could be attributed to banks cutting back loans given, it could also be argued that Nigerians are reducing their dependence on banks. 

With this division of bank duties, the future of banks is on a cliff edge, and operation in banking halls will be rocked to its foundation, which might result in job loss. The 4th industrial revolution has stretched the banking sector so far that lack of innovation by Bankers Association of Nigeria might leave the traditional financial market counting their losses. 

Lessons from Kenya 

Some banks are calling for the CBN to impose regulatory conditions on telecoms interested in mobile money operation, in order to curb its growth. This shows how fearful they are getting, but now is not the time to make requests that will result in unfriendly competition and rule out collaboration, because that’s the saving grace available to banks. 

It should be noted that lenders in Kenya initially went on the offensive against network operators, but as time went by, more Kenyans ported to telcos mobile money service. To put an end to this migration, Kenyan Bankers Association liaised with Safaricom’s MPesa to create M-Shwari to offer loans to mobile money users; this stopped what could have become a banking crisis in Kenya. 


Banks can’t operate alone in the 4th industrial revolution era, they need to pitch tents with the telecoms companies, rather than compete against them if they are to survive the crisis lurking around to consume them.  

The longevity of banks in Nigeria now depends on how banks handle the competition from telecoms and how innovative the financial players are, as they need to do more than create apps or USSD codes to sway or maintain customers.

Dangote Cement overtakes MTN as NSE’s biggest firm

Dangote Cement Plc has regained its position as the biggest listed firm on the Nigerian Stock Exchange as sell-offs were witnessed in MTN Nigeria Communication Plc’s shares on Tuesday.

On Monday, MTN Nigeria overthrew Dangote Cement, becoming the most capitalised company on the NSE just three months after its listing, as its share price increased to N138.70 from N135 on Friday.

However, this feat was short-lived as Dangote Cement saw a 0.91 per cent increase in its share price from N164.50 on Monday to N166 on Tuesday, which pushed its market capitalisation to N2.83tn, compared to MTN’s market capitalisation of N2.69tn.

At the end of trading on Monday, MTN Nigeria overthrew Dangote Cement by N1bn as its market capitalisation stood at N2.82tn as against Dangote Cement’s N2.81tn.

Shares belonging to Dangote Cement closed at N164.5 per share.

In May, when MTN Nigeria listed on the NSE, the company’s market capitalisation was N1.3tn, leaving a N782bn margin between Dangote Cement.

The firm, which was the first telecommunication company to be listed on the NSE, became the second most capitalised company on the Exchange, until Monday when it overtook Dangote Cement.

At the end of trading on Tuesday, MTN was pushed back to its second position as the margin between MTN Nigeria and Dangote Cement stood at N130bn in favour of Dangote Cement.

MTN’s listing on the NSE was part of negotiations with Nigerian authorities to reduce a fine of N5.3tn by the Nigerian Communications Commission for misdeeds with sim card registrations.

It listed a total of 20.35 billion ordinary shares at a listing price of N90 per share.

Source: Punch

System review’ll address property market glut – Stakeholders

Real estate stakeholders say there is an urgent need for paradigm shift to resolve the challenges of affordability mismatch resulting in unsold and unoccupied developed houses, especially in major cities.

According to them, the paradigm shift should be a review of dynamics from market-driven pricing system to end user-driven pricing to ensure that houses are provided for those who need and can afford them.

The call for the review of systems was part of the resolutions reached at the 13th Abuja International Housing Show, and had been presented to the government and its several housing agencies for implementation, according to the organisers.

The documented resolutions, a copy of which was obtained by The PUNCH, also included a call for the creation of enabling policies around land title documentations, with government playing a larger role in assisting investors and supporting local building industries and materials.

Stakeholders also demanded a fast track of the passage of foreclosure bill into law to legally resolve default issues in the sector.

They called for the review of Land Use Act, the Federal Government Housing Loans Board bill, the Federal Mortgage Bank of Nigeria bill and the National Housing Fund bill.

They said there was a need for the Federal Government to advance the ongoing partnership between the Mortgage Banking Association of Nigeria and the Central Bank of Nigeria with regard to the underwriting standards which could increase housing and mortgage affordability for the masses.

Among other resolutions, they called for the adoption of high impact training that would support research and data generation by major stakeholders within the industry and building the right skill ecosystem through job-driven training programmes spearheaded by private sector industry participation for adoption of trainees.

They also called for the institutionalisation of collaboration and partnerships between large-scale industry players to enhance mass housing provision and affordability.

They equally called for the creation of standard data base in African countries especially in Nigeria that could be universally accepted to collate data, identify data gaps, integrate, optimise and expand knowledge set to meet current demands.

Source: punchng

MSMEs to get N154 billion credit facility from LAPO

Life Above Poverty Organisation (LAPO) microfinance bank is targeting N154 billion loan disbursement to support Micro, Small and Medium Enterprises (MSMEs) this year (2019) as against the N137 billion disbursed to them last year.

Godwin Ehigiamusoe, the Managing Director of LAPO microfinance bank, made this disclosure at the bank’s 8th Annual General Meeting (AGM) held in Lagos.

“There is a huge funding gap for Micro, Small and Medium Enterprises, so as a microfinance bank, committed to help bridge that funding gap, our major operation is supporting credit. We prioritise giving loan to those businesses. This has been our commitment right from when we were a non-profit organisation,” Ehigiamusoe was quoted.

Why MSMEs funding: The role of SMEs in enhancing economic growth and development has overtime been widely acknowledged globally. Economic wealth all over the world is created through enterprises and the expansion of their output.

SMEs contribute to the economy by creating value through the production of goods and services, thus enhancing the gross domestic product. They also generate employment by creating much-needed jobs in the economy as well as expanding the export sector largely through linkages with large firms that produce for the foreign sector.

Lack of adequate funding has been the major challenge Nigerian SMEs have raised concerns about. The SMEs stakeholders have overtime lamented the absence of adequate credit facility startups and business expansions.

About LAPO: LAPO is a microfinance bank that focuses on assisting the poor, especially the women, in raising their socio-economic status. It does not only act as a microcredit institution but also assists clients in overcoming problems beyond the lack of funds, such as illiteracy and environmental degradation (which often aggravates poverty).

The institution was founded by Godwin Ehigiamusoe while working as a rural co-operative officer in Delta State, Nigeria. LAPO started its activities in 1987.

Source: nairametrics

CBN Resumes OMO Auction with N150bn Offer to Investors

The Central Bank of Nigeria (CBN) on Thursday resumed Open Market Operation (OMO) auction offering N150 billion to investors in the secondary market, but the short and medium-term instruments were gripped with low patronage due to high rates.

OMO simply means the buying and selling of government securities, which enables a central bank to control the supply of money in the banking system.

Godwin Emefiele, governor of the CBN, said in London this week that the regulator would offer more OMO auctions to counter the upcoming maturities due in September/October. There have been fewer OMO auctions of late. In fact, there may be a requirement to increase yields a bit here to maintain Nigeria’s relative attractiveness to Egypt for fixed income flows (CBN argues Nigeria could remain attractive to Egypt on slightly lower yields given the FX stability).

Of the amount offered on Thursday, a total of N115.89 billion was subscribed by investors but the sum of N88.66 was sold.

“This is due to more attractive rates in the secondary market. Offshore investors have continued to take profit on their fixed income investments in Nigeria,” Ayodeji Ebo, managing director, Afrinvest Securities Limited, told BusinessDay.

The breakdown of the OMO auction shows that N20 billion was offered for 84-day tenor and it was undersubscribed by N5.89 billion. Investors’ bid range was between 11.79 percent and 12.68 percent, but there was no sale and no stop rate.

For the 175-day tenor, the CBN offered a total of N30 billion at a stop rate of 11.8 percent, although investors earlier sought to buy at a bid range of between 11.25 and 12.48 percent. The offer which matures on February 6, 2020 recorded a total sale of N0.69 billion.

The sum of N100 billion was offered for 364-day tenor but a total of N87.97 billion was sold at a stop rate of 12.88 percent after the investors earlier bid at a range of between 12.25 percent and 13.50 percent. The instrument was oversubscribed by a total of N106.27 billion and will mature on August 13, 2020.

The CBN on Wednesday, after the two-day holiday, conducted a Primary Market Auction (PMA), rolling over maturing bills worth N34.4 billion across 91-, 182- and 364-day tenors.
Ayodele Akinwunmi, head, research, FSDH Merchant Bank Limited, said over N9.6 trillion worth of government securities are expected to mature in the financial market between August and December this year.

A report by Afrinvest revealed that on Wednesday last week, the apex bank offered a total of N100.0bn across three tenors (85-, 183- and 344-day). However, the CBN did not allot any sale on the mid-term bill despite 2.9x oversubscription while the short- and long-term bills were both oversubscribed with bid-to-cover ratios of 1.2x and 3.8x, respectively.

“We advise investors to cherry-pick bills with attractive yields across the short-medium term space as the sell-offs may persist this week,” the analysts said.

The report indicated that last week, the secondary market for Treasury Bills started on a mildly bullish note as market players showed interest in short-term bills in the first trading session due to the high system liquidity (N191.7bn positive) on Monday.

This was, however, short-lived, following a reduced demand on mid- and long-term bills by Tuesday as investors awaited the OMO.

On Thursday, the bullish trend was reversed as offshore investors sold off big across all tenors pushing average yields up by 1.3 percent. Thus, average yield on the short- medium- and long-term bills advanced 177bps, 159bps and 94bps, respectively.

Source: businessdayNG

What Nigeria Govt. Should Know About Impact of Housing Sector Development

The housing sector is the bedrock of the economy of most developed nations, an important tool for stimulating growth. Housing construction indices are some of the most common measures used by analysts to gauge economic trends in OECD countries. In more advanced countries like the United States of America, Britain and Canada, the sector contributes between 30 percent and 70 percent of their Gross Domestic Product (GDP). Investment in housing accounts for 15 percent to 35 percent of aggregate investment worldwide and the sector employs approximately 10 percent of labour force worldwide.

The sector of the Nigerian economy that has a very bright future is real estate. Despite the economic downturn, the sector has been growing in leaps and bounds, with high rise buildings, shopping malls, hotels springing up everywhere from Lagos to Abuja, to Port Harcourt, to name just a few.

According to a 2014 forecast by the International Monetary Fund (IMF), strong developments in the construction, real estate, and technology sectors in developing countries such as Nigeria has supported the world economy through tough financial periods in recent years. It also predicts that these developing nations will account for about 70 percent of world growth over the next decade.

Nigeria is touted at the moment as one of the developing countries with great potentials in real estate, and one of the competitive players in the global real estate market that is fast becoming increasingly attractive to investors.

Recently, the National Bureau of Statistics put real estate contribution to Nigeria’s GDP at 7.5 per cent, a figure that left many stakeholders surprised at what they described as a very poor rating by the body.

To really appreciate the importance of real estate to the country’s GDP, they called on the federal government to integrate the construction and building sector into the formal sector in order to capture their contributions accurately.

However, though real estate is still a small contributor to the country’s GDP, its importance cannot be over-emphasised. Perhaps the best way to really understand the importance of the real estate sector to Nigeria’s economy is to compare it to other emerging and developed countries of the world. Another way to do this would be to compare its growth to the country’s economic growth.

Let’s start with the latter. The Nigerian economy grew by 2.35 percent year-on-year in the second quarter of 2015, down from 3.96 percent expansion reported in the previous quarter.

This has been attributed to the decline in oil production and prices, and recently, the Federal Government admitted that the country’s economy was “technically in recession” having gone on two quarters of negative growth.

That admission, though coated in technicality, corroborates the recent forecast by the International Monetary Fund (IMF) who predicts that Nigeria’s economy was likely to contract by a further 1.8 per cent this year. In other words, the country which had earlier overtaken South Africa as the fastest growing economy in Africa is now heading towards recession.

Ironically, while the country’s economy suffers from stunted growth, the real estate sector has been on the upswing, growing faster than the average GDP at a rate of about 8.7 per cent, according to the accounting and auditing firm, PricewaterhouseCoopers (PwC), as well as stakeholders like the Centre for Affordable Housing Finance, with a projection to grow by 10 per cent in the near future.

In its May 2015 report titled, ‘Real Estate: Building the Future of Africa,’ PwC further predicted that Nigeria’s real estate investment will rise by about 49 per cent, from $9.16 billion last year to $13.65 billion this year. It attributes this to a growing middle class driving demand for residential property development, and indirectly, retail, industrial and commercial real estate development.

However, experts believe that the sector could do better with the right incentive. According to them, despite its growth, the real estate sector still remains a small contributor in the country’s GDP, especially when compared to other emerging and developed countries like South Africa, Brazil, China, and the US.

This could be attributed to several problems plaguing the sector. One of them as highlighted by the PwC report is access to finance. “There are existing problems with access to finance; with a lack of long-term debt financing and an underdeveloped mortgage market, with mortgage loans representing less than 1 per cent of the nation’s GDP.” Another, the report says, is the cumbersome and time-consuming process for land acquisition and ownership documentation which makes land acquisition difficult, even though land is very cheap in Lagos, compared to other emerging cities across the world.

Lack of infrastructure still remains a major concern for the sector as the non-availability of basic services such as water and energy has forced developers to provide these amenities themselves, thereby raising their total development costs by up to 30 per cent, the report further lamented.

All these have led to a severe shortage in the sector, with the yearly supply nowhere near what is needed. The country, like the rest of Africa, remains severely undersupplied, especially when it comes to high-quality commercial space.

Retailer expansion also continues to be hindered by a lack of high-quality retail accommodation. Jones Lang LaSalle estimates that the stock of ‘Grade A’ shopping malls across.

The economy of developed countries like USA, UK, France, Germany, Japan and many more relies heavily on the real estate sector. This is why crashes in real estate markets often result to global economic meltdowns. It proves how important the sector is in the development of an economy.

Africa (excluding South Africa) is less than 1.5 million square metres – that’s barely equivalent to the stock of Hungary, a country of just 10 million people against one billion in Africa.

In Nigeria, a country of over 180 million people, the housing shortage can be seen in low, middle income residential and office spaces. And as the country’s population increases, we will see further strains on an already challenged industry. At the moment, Nigeria is believed to have a housing deficit of 17 million. According to experts, affordable housing and accommodation must be the major driver if the nation’s real estate sector is to deliver at the rate and scale needed to contribute significantly to the nation’s economy.

To plug the housing gap, the World Bank in its 2014 study stated that N59. 5 trillion would be needed at N3.5 million per unit. What this means is that despite the harsh economic conditions, the real estate sector still represents a huge opportunity for positively impacting the economy to promote growth and inclusion.

This is because housing is not only a basic necessity that affects the welfare of the citizenry, but also a critical sector of an economy. Therefore a viable and sustainable housing finance plan is essential.

To achieve this, experts insist, the industry requires the availability of affordable long-term funds to be provided by the capital market. According to them, funding from the capital market reduces the cost of mortgage loans, cost of funds and allows for longer repayment tenor.

In addition, there should also be a general review of the house types, as well as their sizes and quality, with more efficient designs. Also needed is high quality infrastructure such as the ones provided in the Eko Atlantic City.

Modeled after the skyscraper District of Manhattan Island in New York City, it is expected that the new city will be home 450,000 residents, with commuter volume expected to exceed 300,000 people daily. Self-sufficient and sustainable, it includes state-of-the-art urban design, its own power, clean water, advanced telecommunications, spacious roads and over 200,000 trees.

The uniqueness of the initiative for the region is that the residential units will be constructed as vertical high-rise apartment towers due to limited space for the traditional single family detached units. There are already over 500 units of apartments of various room sizes ranging from one bedroom to four bedroom apartments already under construction. The first residential tower is completely sold out and the first set of units will be delivered over the next couple of months.

With such ambitious projects, stakeholders remain optimistic that the real estate sector can contribute immensely in resolving the current economic problems faced by the country also be a major source of employment for the country’s fast growing population.

Nigeria’s Former Minister of Power, Works and Housing, Babatunde Raji Fashola agrees, describing the real estate industry as a strategic sub-sector in the construction industry that has remained an important contributor to the Gross Domestic Product with vast potentials for energizing and catalyzing growth of the overall national economy.

This is therefore a clarion call on the federal and state governments, the national and state assemblies to rise up with the political will that will encourage investment in the real estate sector of Africa’s most populous country – Nigeria.



The Bank of Ghana (BoG) has revoked the licences of twenty-three insolvent savings and loans companies and finance house companies.

The affected institutions include Ideal Finance, GN Savings and Loans, First Allied Savings and Loans, ASN Financial Services, Midland Savings and Loans, IFS Financial Services, Unicredit Savings and Loans and Women’s World Banking Savings and Loans.

A statement issued by the BoG on Friday August 16, 2019 said the revocation of the licences of the institutions had become necessary because they were insolvent even after a reasonable period within which the Bank of Ghana had engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.

“These actions were taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent,” the statement said.

The Bank of Ghana has also appointed Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.

The companies are:

  • 1. Accent Financial Services Ltd
    2. Adom Savings and Loans Ltd
    3. AllTime Finance Ltd
    4. Alpha Capital Savings and Loans Ltd
    5. ASN Financial Services Ltd
    6. CDH Savings and Loans Ltd
    7. Commerz Savings and Loans Ltd
    8. Crest Finance House Ltd
    9. Dream Finance Company Ltd
    10. Express Savings and Loans Company Ltd
    11. First African Savings & Loans Company Ltd
    12. First Allied Savings and Loans Co. Ltd
    13. First Ghana Savings and Loans Co. Ltd
    14. FirstTrust Savings and Loans Ltd
    15. Global Access Savings and Loans Company Ltd
    16. GN Savings and Loans Ltd
    17. Ideal Finance Ltd. Finance House
    18. IFS Financial Services Ltd
    19. Legacy Capital Savings and Loans Ltd
    20. Midland Savings and Loans Company Ltd
    21. Sterling Financial Services Ltd
    22. Unicredit Savings and Loans Ltd
    23. Women’s World Banking Savings and Loans Co. Ltd

Source: graphic

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