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Here’s Why Nigeria Should Prioritise Equity Over Debt

..investors may demand higher yield on Moody’s downgrade …as Aramco set to raise $29bn from IPO

Nigerian President Muhammadu Buhari last week sought the approval of lawmakers to raise $29.96 billion to fund what he called 39 emergency projects in the power, agriculture and transport sectors.

If approved, the fresh borrowing will push the country’s total debt stock to N36 trillion from N25.7 trillion as of June 2019, according to data provided by the Debt Management Office (DMO).

The International Monetary Fund (IMF) said this week that Nigerian public debt as a percentage of GDP was 27 percent of GDP. That figure includes overdrafts with the Central Bank of Nigeria CBN.

A debt to GDP ratio below 30 percent is low compared to the emerging market average, but the worry is the rate of the debt accumulation as well as its actual use and the expensive toll it is taking on already strained public revenues.

The debt stock has almost tripled since 2015 with a chunk of the borrowing going into recurrent expenditure at the expense of capital projects. Official data reveal that total debt service cost accounted for 60 percent of government revenue in 2018.

These worries formed the basis of a downgrade by global ratings agency, Moody’s Investors Service this week. Moody’s downgraded Nigeria’s outlook to negative from stable for the first time in three years.

“The negative outlook reflects Moody’s view of increasing risks to the government’s fiscal strength and external position,” the credit ratings agency said.

“Already weak government finances will likely weaken further given an extremely narrow revenue base and persistently sluggish growth that hinders fiscal consolidation.

According to Moody’s, there is a risk that the government resorts to increasingly opaque and costly options to finance a moderate but rising debt burden.

Nigeria’s rising debt burden begs one question. Why borrow so much when you can raise equity?
Going after private capital is cheaper than borrowing bringing the government’s half-hearted push for private investment under scrutiny.

Choosing private capital over debt should be simple since it is less expensive but in Nigeria, the government has failed to take that opportunity, according to critics.

As surprising as it sounds, there are limited opportunities for foreign Direct Investors looking to park their cash in Nigeria.

That’s because Abuja has maintained its 100 percent ownership of key infrastructure, including rail transport, pipelines, power transmission, stadiums, public universities and tertiary hospitals across the country, effectively limiting options for private investment in the country.

Even the oil and gas sector, which has typically attracted the larger chunk of new FDIs to the country, has come unstuck, as a set of fiscal reforms (contained in the Petroleum Industry Bill meant to unlock new investments) has stalled for decades.

The lack of investment-friendly reforms has been telling with FDI flows likely to fall to a six year low of just over $800 million in 2019.

“Why cant it be Nigeria trying to do what Saudi Arabia is doing by seeking to sell some stake in Saudi Aramco?,” a senior banking source told BusinessDay.

“There are redundant government assets that can unlock trillions of naira, but it’s a pity we have the option to raise equity but we keep choosing debt without caring enough about the cost,” the source said.

Saudi Aramco announced late last night that it priced its initial public offering (IPO) at 32 riyals per share, valuing the company at $1.7 trillion. If all the shares offered are exercised, Aramco will raise $29.4 billion, making it the largest IPO in history.

Rather than go after FDI which is a good source of equity capital, the government has prioritised Foreign Portfolio Investors (FPIs), a trend Moody’s also warned that will hurt the country’s economy and leave it vulnerable to outflows when sentiment turns.

The central bank’s stock of so-called open-market operation (OMO) bills, an instrument used to borrow money from FPIs, has risen to N17.4 trillion ($48 billion) from N5 trillion in 2017, according to Moody’s.

Around a third are held by foreigners, it said, many of which are carry traders enticed by yields of about 13 percent.
“To attract foreign investors, the Central Bank of Nigeria is paying high interest rates on these certificates,” Moody’s analysts Samar Maziad and Marie Diron said in a statement. “This policy is very costly, and has a consequent impact on the yields of other government financing instruments.”

The strategy has worked in terms of keeping the naira stable, a key aim of both Governor Godwin Emefiele and President Muhammadu Buhari. It has barely budged against the dollar this year and is Africa’s best-performing major currency after the Egyptian pound.

The cost of that stability has however continued to cast a shadow over that approach.

Societe Generale doubts the trade, which has returned investors almost 30 percent in dollar terms so far in 2019, will lose its appeal soon. The French bank forecasts that the naira will slip only around 1 percent to 365 per dollar by the end of 2020.

“Nigerian fixed income has provided excellent returns and attracted large portfolio inflows over the past couple of years,” SocGen analysts including Singapore-based Jason Daw said Wednesday. “We expect this to continue.”

The pain will come once the music stops playing and investors begin to unwind the trade, analysts tell BusinessDay.

Source: businessdayng

UNHRC; Housing Challenge in Nigeria and Leilani Farha Observations

Each passing day brings yet more evidence that we are facing a national challenge. And glaringly, our incapacity as a nation to develop necessary strategies and tactics to tackle some of these political and socioeconomic challenges have qualified the nation’s situation as a ‘social dynamite’. This should be a surprise to all Nigerians of goodwill because a strategy is ‘simply no more than a plan of action for maximizing one’s strength against the forces at work’. Yet, such a simple but vital instrument for development and nation-building is conspicuously missing in most- Ministries, Agencies, Commissions and Parastatals in a nation that prides itself as the giant of Africa and the most populous black nation in the world.

Likewise, apart from the belief by Nigerians that often always, it’s through foreign personalities, foreign media and very few Nigerian owned that accurately report the political and socio-economic situation in the country, one event in recent times that probably did more than anything else to convince Nigerians with critical interest to look differently at the out of ordered situation in the country is a preliminary report of findings and recommendations of a recent visit in September 2019, to the Republic of Nigeria by Ms Leilani Farha, Special Rapporteur on adequate housing-a visit which has as a goal; assessing the housing conditions of people in Nigeria using international human rights law and standards, and to determine if governments are meeting their obligations in this regard.

Indeed, not only did the finding which is due for presentation to the UN Human Rights Council in March 2020, confirmed what has been on the minds of Nigerians, its description of the conditions met in the informal settlements visited as inhumane and an assault on human dignity, logically reputed as ‘words made flesh’ the age-long campaign against successive governments continual neglect of these communities by some notable Non-Governmental Organizations (NGO), fair-minded and highly foresighted Nigerians.

For a better understanding of both the findings (report) and the piece, it will be highly rewarding to state that the mission that gave rise to this report was based on housing-related data, laws, jurisprudence and policies in several communities in three major urban centres: Abuja, Lagos and Port Harcourt was focused on vulnerable populations whose rights are most precarious.

And the exercise among other results confirmed the following; that economic inequality has reached extreme levels in Nigeria; that Nigeria’s housing sector is in a complete crisis; that there is no current national housing action plan or strategy. That Coordination and communication between federal and state governments seem lacking. Private market housing is unaffordable for most, rental housing is scarce, requires tenants to have one to two year’s rent in advance and there are no rent control or caps; And established that in Nigeria as in many other countries, real estate is used as a convenient place to launder corrupt money, to park excess capital and as a means of financial security for the wealthy.

This inequality underlined, is widely attributed to several factors, including corruption and mismanagement of public funds, and a failure to implement just tax policies, whereby low-income earners pay disproportionately more taxes than do high earning corporations. Less than 6 per cent of registered corporate taxpayers are active, and only between 15-40% of the Value Added Tax is collected.

Specifically, in my views, there are reasons that characterized this report as crucial. First, is Leilani remark that governments do not fully appreciate the nature and extent of the crisis on their hands second and very profound is the underlining that internally displaced persons living in an informal settlement in the Federal Capital Territory lives in appalling conditions. With over a hundred children attending a tiny, overcrowded one-room school run with little resources by an NGO, despite living half an hour drive away from Abuja’s city centre and the Federal Ministry of Education. Thirdly, if the report is submitted to the UN without the FG doing something theatrical to ameliorate the impact, it will again deplete the little reputation Nigeria showcases at the global stage.

Most fundamentally, regardless of what others may say, as someone that has spent over a decade with some Non-Governmental Organizations (NGO), that champions the campaign against forced eviction of some ‘slum’ and blighted communities and, resettlement of those evicted in Lagos, Abuja, Rivers and Delta, I need not pulse to know that the report was not just well ordered but perfectly articulated.

Standing as a telling proof to this assertion is a similar 129 paged report titled; Pushing Out The Poor (forced evictions under the Abuja master plan), based on upon findings generated from the Social and Economic Rights Action Center (SERAC), research missions undertaken in November 2005, and between May and June 2006 to the Federal Capital Territory and published in January 2007.

There are other concrete examples of such exercise that took place without conforming appreciably to international human rights standards as contained in General Comment 7 of the Committee on Economic, Social and Cultural Rights and the Basic Principles and Guidelines on Development Based Evictions and Displacement (A/HRC/4/18, Annex).

I recall with nostalgia the excruciating pains suffered by the people/residents of Ijora-Badiya East, Makoko/Iwaya/Otto Ologbo (Yaba areas of Lagos state), Abonima Wharf and Njemanze waterfront of areas of Rivers State. And the inabilities of successive administrations in Lagos state to adequately compensate the former residents of Maroko community, Victoria Island, Lagos forcefully evicted in the early 1990s by the then military administration of Raji Rasaki.

 

Separate from Leilani Farha expression of concern that State governments routinely ignore the rule of law in right to housing cases, what is in some ways an even more troubling manifestation of how seriously off track successive administrations have taken us as a nation is a remark that Nigeria is the 29th largest economy in the world, just behind Norway and well ahead of countries like Singapore and Malaysia-and considered as one of the fastest growing economies in the world, albeit, reliant on the precarious oil market.

Yet, unable to meet the standard as set under international human rights law, which demands that states should spend the maximum of available resources toward the progressive realization of economic, social and cultural rights including the right to housing-this include collecting and imposing taxes, and developing mechanisms to prevent corrupt money from landing in residential real estate or other assets domestically or internationally.

This disgraceful treatment suffered by the vast majority of the vulnerable Nigerians in the hands of their leaders have created deep resentment and hurt the feelings of the nation.

Admittedly, a nation, in my opinion, can, of course, chose to fight/develop on the basis of a functional strength or sector recognizing that such sector will engineer the development of the state. But, in the case of Nigeria, there is no example of such priority by successive administration.

In view of the above, I believe without a doubt that the most important part of the report lies in its ability to expose the fundamental flaws in the country and render as invalid the data that are hardly objective, and inferences that is never explicit and the conclusion that is usually, self-serving daily generated by public officials and their aides who often give the impression that they already have exclusive possession of the truth and merely have to educate others about what they already know.

Consider this example reported in-depth; there is a consensus that the legal framework for land administration, especially the Land Use Act (LUA), is exacerbating the pressures on the housing sector. The manner in which the LUA has been used has resulted in severe consequences for the enjoyment of the right to housing. The LUA vests State Governors with significant management and administrative powers. Governors can grant rights of occupancy and also revoke them based on an “overriding “public purpose”. I received many reports of Governors abusing their land administration powers, including granting occupancy rights to family members and friends; defining public purpose in a manner that results in forced evictions of impoverished communities inconsistent with international human rights law, including for luxury developments that often stand vacant – unsold or unused. The LUA also makes land title registration cumbersome and extremely onerous to perfect.

Very seriously also, before concluding that the above is the only harm the government is doing to her people gaze calmly and honestly at the next paragraph for another shocking revelation as factually documented by Ms Leilani Farha, and her team.

None of the homes visited had running water, boreholes or portable water, thus most families have to pay high prices to access household and drinking water. Those who could not afford fresh water were using contaminated floodwater, resulting in cholera and other health issues. I saw a few houses with latrines. According to UNICEF, diarrhoea kills more than 70,000 children under five years old annually in Nigeria, most of it caused by poor access to adequate water, sanitation and hygiene. Nearly one-quarter of Nigerians defecate in the open.

Finally, to be candid, there may be a sincere desire by the government to develop the political and socio-economic situations in the country, however, any government; whether state or federal, desirous of doing this must study this report in order to function accordingly.

Source: thenigerianvoice

Ghana Property Awards 2019

Some industry players in the country’s real estate, property and construction sector have been celebrated at this year’s Ghana Property Awards ceremony for their outstanding contribution to the sector. The annual event, which is the 12th edition, was organized by the Property Express Group in collaboration with the Ministry of Works and Housing.

The 2019 edition of the annual Ghana Property Awards was a glittering ceremony, which came off on Friday, November 29 at the Accra International Conference Centre. This year’s event was under the theme, “Strengthen the Bedrock of Ghana through Green Development”.

Being the 12th edition, the event recorded a higher number of attendees as compared to the previous editions. CEOs and management of real estate companies, financial institutions, construction companies and individuals graced the occasion. This shows the expansion of the sector as many new firms have joined.

The president for GREDA who doubles as the CEO of PS Global Limited, Mr. Patrick Ebo Bonful was the Chairman for the event. He called on all to have a total change in our socioeconomic lifestyles and also rely on locally produced building materials which have proven to be more durable. “There should be a total change in our socioeconomic lifestyles if we are to make any in-roads in the area of GD (Green Development).

Social Equity should drive our policy and be the bedrock of our building and construction development plans”, he said. Mr. Bonful also mentioned that GREDA has submitted a proposal to the Government of Ghana to spearhead the provision of mass affordable housing in the country. He urged that many households should be encouraged to use solar energy and reducing taxes of imported solar systems can do this.

In her speech, Irene Agyenkwa, the Director of Ghana Property Awards pointed out that Sustainability is key in the Real Estate Industry and the solution to the thin line between green development and profitability “lies in between with a focus on green solutions, effectiveness, quality, durability and pricing”. She further stated that Ghana Property Awards made a proposal that individuals and real estate developers should be given the permission to trade the excess solar energy they own. Irene said,

“Solar energy should not be just seen as a means of saving money on energy bills but with the right framework, it can generate, store and trade energy, saving and earning income, for home owners and investors alike”.

Speaking at the event also was the representative of the special guest of honor for the event, Hon. Samuel Atta Akyea, the Minister of Works and Housing. The Ministry encouraged the real estate industry to do more through the use of clay, wood and local building materials in order to reduce cost. To enrich the stakeholders input in devising a technical document that will guide economic and development controls, Hon.

Samuel Atta Akyea has launched the Building Regulation Technical Document. The Ministry of Works and Housing hopes to strengthen its relationship with all industry players.

Awards and Winners

To be eligible for nominations, projects must be supervised by an architect, surveyor or engineer with a proof of an insurance policy.

The Awards were grouped into three categories; Residential, Commercial and Special Awards.

Winning the Hall of Fame Award, Mr. Eric Ebo Acquah, CEO of Blue Rose Limited said he was excited and honored to receive this special award. He revealed that, in the coming years, his company seeks to build more affordable houses for the people of Ghana.

Mr. John Otumfuor Watson of Mayfair Estates, after taking the award for Residential Developer 2019- Upper Income mentioned his company has maintained this award since 2016 and they wished to put up the tallest building in the country hopefully next year.

Speaking on behalf of Construction Planners Ghana Limited (CPL), which won the Best Residential Developer 2019 – Middle Income, Jeffery Osei Boateng, mentioned that his company really deserved an award and it would have been heartbreaking not receiving any award at the event.

The newly introduced award for this year was the Real Estate Club Students Writing Competition Awards which were picked by Mr. Derick Frimpong Boateng from KNUST (2nd Runner Up), Mr. Alexis Yeboah from Ashesi (1st Runner Up) and the winner was Mr. George Agyei Nyarko Junior from KNUST. George Agyei Nyarko Junior, a final year Architecture student said he was glad his hard work had paid off and hopes the points he made in his article will be addressed in the country.

About the Ghana Property Awards

Ghana Property Awards is an annual event organized by the Property Express Group in Ghana to give due recognition to excellent performing firms in the Real Estate, Property And Construction sectors, hotels and financial institutions who support the sector.

The maiden edition of the Ghana Property Awards was held in 2007 and since then has become an annual program. The main objective of the program is to boost excellent standards and promote confidence in the sector. It also seeks to protect and maintain the interest of stakeholders in the industry. This awards ceremony also brings industry players together and offers a meeting platform for them to discuss business opportunities.

The 2019 Awards team added new and innovative categories with the intention of spurring on new entrants and increase competition. The awards were grouped into 6 categories, each category having at least 4 awards.

Winners list below:

Award winners

Best Residential Developer – Upper Income Prestigious 2019 – Goldkey Properties

Best Sustainable Engineering and Elevator Firm of the Year 2019 – ARG1

Up Coming Property Brand of the Year 2019 – Bijou Homes

Innovative Mortgage Product of the Year 2019 – GHL Bank

Hall of Fame 2019 – Blue Rose

Quality Property Firm of the Year 2019 – Waylead

Best Students Article 2019 – WINNER George Agyei -Nyarko Jnr – KNUST

Best Students Article 2019 1ST RUNNER UP – Alexis Yeboah – Ashesi University

Best Students Article 2019 2ND RUNNER UP – Derrick Frimpong – KNUST

Best Residential Developer –Upper Income 2019 Mayfair Estate Ltd

Best Residential Developer – Middle Income 2019 – CPL

Best Residential – Lower Income 2019 – Adom City Estate

Best Residential Developer- Apartment 2019 – Goldkey Properties

Best Eco Green Development – Atelier

Bespoke Green Company 2019- Ghana – Yecham Property Consult

Best Mixed-Use Development 2019 Goldkey Properties

Biggest Estate Development 2019 Ghana – State Housing Company

Private Biggest Real Estate Concept 2019 – Appolonia City

Best Hotel Development 2019 – Outside Accra – Red Mango Hotel and Apartments

Best Real Estate Management and Advisory Service Company 2019 – Broll

 

Source: Property Express Group

How to Tap into the Enormous Potential in Green Buildings

A new report by the IFC, a member of the World Bank Group, highlights how investors can tap into the enormous potential in green buildings.

The report, Green Buildings: A finance and policy blueprint for emerging markets, notes that by 2030 in emerging markets alone, green buildings will offer a $24.7 trillion investment opportunity, which will spur economic growth and accelerate sustainable development. Across Asia and the Pacific, which will house half the world’s urban population by 2030, there are particularly promising areas for investment, with an estimated $17.8 trillion worth of investment opportunities, primarily in residential buildings.

“The floor area of the buildings that dot our skylines is expected to double by 2060,” notes Alzbeta Klein, the director of climate business at the IFC. “The majority of this construction boom will occur in emerging markets, particularly in middle-income countries experiencing high population growth, rapid urbanisation, and income growth. Green construction is one of the largest investment opportunities of the next decade that can spur low-carbon economic growth and create skilled jobs for decades to come.”

The report highlights the clear financial benefits investors, banks, developers and owners, including governments, can expect when entering the green building market. Green buildings command substantially higher sale premiums – up to 31% more – and sell more quickly than traditional buildings. Furthermore, green buildings maintain higher occupancy rates – up to 23% higher – than conventional buildings and offer higher rental income.

By consuming less water and electricity, operational costs are up to 37% lower than traditional buildings. When green features are incorporated early in the building design, the cost of green construction can range from savings of half a percent to 12% in additional costs.

Additionally, the report notes that green buildings can be a strong driver of economic growth, generating upwards of nine million skilled jobs in both the renewables and construction sectors by 2030. Currently, green buildings account for just 8% of the construction and renovation sector, indicating a vast potential for growth.

Catalysing green building markets

The report offers a uniquely private sector perspective on the investment potential in emerging markets and how to realise this potential, according to IFC. It draws on IFC’s almost decade-long experience investing $5.5 billion in green buildings, as well as lessons learned helping governments to design and implement building codes to catalyse green building markets.

In addition, IFC has designed its own certification system designed for emerging markets, EDGE (Excellence in Design for Greater Efficiencies), which is available in more than 150 emerging markets. IFC’s Green Buildings programme is implemented in partnership with the governments of Austria, Canada, Denmark, Finland, Hungary, Japan, Switzerland, and the UK, as well as with ESMAP, the EU, and GEF.

By 2030, other regions besides Asia and the Pacific will offer significant opportunities as well:

  • In Latin America, green housing construction will create an estimated $4.1 trillion investment opportunity in green buildings.
  • New green buildings in Eastern Europe and Central Asia will attract almost $881 billion in investment opportunities, likely much smaller than investments required to retrofit old buildings.
  • In the Middle East and North Africa, cities will account for most of the over $1.1 trillion regional investment opportunity in green buildings as demand increases for resilient housing to combat water and heat stress.
  • In sub-Saharan Africa, cities will double in population by 2050, providing a $768 billion investment opportunity to green future construction until 2030.

IFC’s report highlights best practices by and for investors, banks, governments, developers, and owners, and provides an investment blueprint for scaling up green buildings across emerging markets. Shifting lending and investments towards green buildings will allow investors to take advantage of this significant investment opportunity. It will also help build stronger real estate investment portfolios resilient to financial, regulatory, and reputational risks associated with the transition to low-carbon economies.

Governments stand to benefit financially from the transition to green construction, and the shift will also help them meet their social and environmental objectives. Globally, 28% of greenhouse gas emissions come from energy use in buildings, making them an important part of helping governments to achieve their climate change targets.

Source: esi-africa

McKinsey, Tufano Outline Reforms Nigeria Must Undertake to lift Growth

Time is running out for Africa’s most populous nation, which has only managed to lift 4 percent of its population from poverty over the past two decades, to reconsider its growth agenda.

Emerging Markets (EM) from China to Vietnam have far outperformed Nigeria in that period, having seen poverty levels slide 60 percent and over a billion people taken out of poverty, according to global consulting firm, McKinsey & Company.

While Nigeria has stuttered, 11 recent outperformers like Ethiopia, India and Belarus have achieved 5 percent growth rate in the last 20 years, according to a report presented by Fiyinfolu Oladiran, a partner at McKinsey & Company, at the BusinessDay CEO Forum, Tuesday.

The presentation by McKinsey revealed Nigeria has everything to be a leading economy across the world, thanks to its young growing labour force, high adoption of technology and abundant natural resources. However, economic growth has not been sufficient enough to drive development as a vibrant labour force remains underutilised and uncompetitive while basic infrastructure continue to fall short of rising population.

“Despite relative improvement in the World Bank ranking, Nigeria is still a poor place to do business in,” Oladiran said.

Finding a way to drive productivity and most especially to grow large companies may hold the key to improved economic fortunes. According to Oladiran, large companies build ecosystem with robust value chain which will spill over to small businesses.

In Nigeria, only 42 companies measure up as large companies with a minimum of $500 million in annual revenue. That compares to 309 in South Africa.

Oladiran advised that Nigeria increase its share of large companies to boost economic growth.

Peter Tufano, dean of Saïd Business School at University of Oxford, England, said the best investment for Nigeria is to invest in human capital because in the next 30 years there would be opportunities for Africa in the global leadership space.

“Unlike some countries with an elderly working population that needs retraining, Nigeria’s young population gives it needed advantage,” said Tufano, who was the guest speaker at the CEO Forum.

From its extensive work with some of the most successful emerging markets, McKinsey recommended eight big moves that could result in a turnaround for Africa’s most populous nation.

The eight big moves include building a more able bureaucracy, improving capital productivity drastically, developing centres of competitiveness, leapfrogging the technology ecosystem, unlocking the full potential of the oil and gas sector, accelerate agriculture transition and address current and future mobility issues.

To foster a more efficient public service, Oladiran suggested the need to digitise priority processes through Public Private Partnerships (PPP) in the short run while in the long run adopt e-government for all public services within the next five years.

On improving human capital, he said there is need for private sector-driven reskilling programmes with a focus on Science, Technology, Engineering, and Mathematics (STEM) jobs on the short run while on the long run there is need for nationwide technical and vocational education and training programmes.

“There is need to increase availability of quality and affordable power at industrial hubs on the short run and special economic zones with time-bound objectives linked to national strategy on the long run,” Oladiran said.

To leapfrog the technology ecosystem, McKinsey & Company advised the government to scale up broadband through partnership with private sector on the short run while on the long run improve digital transformation of private companies.

In order to leverage on the power of parity, McKinsey & Company wants the government to spread the use of digital to raise financial inclusion and empower female entrepreneurs on the short run while on the long run raise women’s skill through education for the future world of work.

Regarding the full potential of the oil and gas sector, the government was advised to accelerate investments into the sector while at the same time diversifying government revenue from the sector on the short run. On the long run, the government was asked to expand infrastructure that can fast-track investment earnings from gas and petrochemicals.

McKinsey & Company also urged the government to prioritise high value crop value chains into national champion in the short run and on the long run drive full end-to-end private sector-led agricultural economy.

To address current and future mobility issues, it said the government must target investment through PPP and other methods on the short run while unlocking financing and delivery models on the long run to close an annual $100 billion infrastructure financing gap.

The government’s short- and long-term approach to economic growth will be decisive, with the World Bank predicting Nigeria to be home to a quarter of the world’s poorest by 2030.

Also at the BusinessDay CEO Forum, Vice President Yemi Osinbanjo said he was optimistic on Nigerian economy as he foresees it moving in a northward direction.

Osinbajo, who was represented by Louis Odion, senior technical assistant to the vice president on print, stated that the advent of technology holds huge opportunity for a country like Nigeria.

He assured that the current administration remains committed to working with the private sector for economic growth and development.

“Let me use this opportunity to reassure you that the Buhari-led administration is committed to working with the private sector,” Osinbajo said.

The annual event had in attendance government officials, investment bankers, policymakers, chief executive officers (CEOs), economists, researchers, analysts, academics, and private equity firms.

Source: Businessdayng

Year In Review: The Biggest Housing Projects in 2019

Housing has dominated every big policy decision in San Jose this past year, as the city faces a growing housing and homelessness crisis. Slowly, the city is inching its way closer to meeting Mayor Sam Liccardo’s goal of producing at least 25,000 new housing units — 10,000 of them affordable — by 2022.

While city leaders say progress is being made, the city is still falling behind on reaching that goal by a long shot, as several challenges have stalled production. In 2019, only 4,392 residential units were either approved or under construction, 1,836 of which are under construction. In terms of meeting the mayor’s affordable housing goals, only 245 out of those 10,000 units have actually been built, while 1,640 are in the pipeline.

But there is some good news.

The city, along with developers, nonprofit partners and tech companies such as Google and Apple, invested millions in beefing up San Jose’s housing stock this past year. Finally, frustrated city leaders are starting to see more shovels in the ground, while many of those anticipated projects — including the city’s first permanent supportive housing project — opened in 2019.

Here are some of the city’s most highly-anticipated housing development discussions and decisions of 2019 — including several affordable housing complexes that opened their doors.

Second Street Studios

Downtown San Jose’s first long-term affordable housing development finally opened its doors in May, after a series of challenges halted the project’s opening for months. Prolonged delays cost Santa Clara County nearly $1.15 million in motel costs for the residents set to move in after weather challenges stalled development. Despite the hurdles, the first-of-its kind project in the downtown core — meant to address the growing homelessness crisis — now houses 134 individuals, considered some of the most vulnerable, chronically homeless and disabled residents in the county. The project’s opening has changed formerly homeless individuals’ lives, many of whom can now feel safe and secure in a new home.

A group of those formerly residents now pen a monthly San José Spotlight column about their experiences called “In Your Backyard.”

“Moving in was as happy a time as I can remember after what seemed like a lifetime of struggle and pain,” wrote resident Cecilia Martin in a recent column. “Almost four months later, every day I think about how much this has changed my life and feel thankful.”

The 5-story, 100,000-square-foot housing complex also provides case managers, medical and mental health professionals and a “wellness” peer who was formerly homeless to each resident, according to Abode Services, the project’s service provider.

Villas on the Park

Earlier this month, the city opened the doors to a 6-story building with 83 units entirely dedicated to housing formerly homeless residents in the heart of downtown. Located at 280 N. Second St. near St. James Park, Villas on the Park cost $37 million, primarily funded through revenue from Measure A, a $950 million affordable housing bond approved by voters in 2016.

The highly-anticipated project took four years to complete, and through several private-sector partners, the project’s developers furnished and stocked each unit with basic essentials such as pots, pans, sheets, pillows, shower curtains and towels. The apartment complex is one of the first to permanently house the region’s homeless population, giving a second chance to those who braved living on the city’s streets.

“This place is a lot of relief,” Jimmy Hendrix, the first resident to move in, told San José Spotlight. “It’s easier to take care of yourself when you’re inside.”

Santa Clara University Teacher Housing

Against all odds, the San Jose City Council in a 9-1-1 vote in May approved moving forward with a plan to house teachers on a plot of industrial land.

The proposed project includes 295 units of below-market-rate homes, for teachers at Santa Clara University and aims to retain quality faculty and staff in a region where rapidly increasing housing prices have displaced and pushed them out. Despite opposition from city planners, citing a conflict with the General Plan’s goals of rezoning land meant for jobs to non-industrial uses, many city leaders said the proposed project is a step in the right direction to solving the region’s affordability crisis.

The site, located at 1202 and 1205 Campbell Ave., will be rezoned to transit residential use in order for Santa Clara University to continue with the project.

Google Village

Earlier this year, tech giant Google unveiled a massive plan to bring 5,000 new homes, 6.5 million square feet of office space and 500,000 square feet of retail, hotel, community and other “active uses” to the west side of downtown. The massive 80 acre mixed-use development will transform San Jose’s downtown, bringing a vibrant new community reflecting the beating heart of Silicon Valley’s tech industry.

The plot of land, located west of Highway 87 near a busy transit hub will revitalize the core of the city, attracting new growth, stimulating the city’s economy through the production of nearly 25,000 new jobs and creating a bustling transit hub next to Diridon Station and BART’s newest San Jose extension.

The proposal also includes a whopping 15 acres of public amenities, such as large plazas, parks and plenty of natural, green space. While construction on the ambitious project may take more than a decade to complete, eager city leaders are expected to approve the project by the end of next year.

Source: sanjosespotlight

Under fire: The story of Abuja Communities Threatened by High-Power Cables

Thousands of Abuja residents live under high tension power lines. To these people, electricity sparks in a ‘normal’ occurrence. Some of the residents said though there are sparks from the power line, nobody had died from electrocution in their areas while some believe that there is no electricity running through the power line. In Karu, one of Abuja’s sprawling satellite towns, hundreds of people reside under or near power lines.

They plan going nowhere insisting that the government should relocate the high tension power lines instead. Mrs Bulus Ali, a Jikwoyi resident said despite experiencing some electricity spark on the high tension power line above her house, she would not leave to another location. She argued that despite the dangers, well known to her, the government had to relocate the power line to another location because she built her house before the power line was constructed in the area.

Another resident, who identified himself as Dr Dom said the high tensions were already laid before moving into the house. He alleged that the government ought to have moved the power line to another location as its present location is developed with several houses and occupants. Some of the houses marked for demolition in Lugbe “This is a matter of life and death which the government is treating with kids gloves which should not be so because every life is important.

I hardly sleep at night especially when there is heavy wind due to fear that a pole might fall,” he said. Mr Linus Okeke said despite the risk, which he acknowledged could lead to loss of lives, he, however, says he would not relocate, “It is advisable to leave the vicinity but we cannot because some of us built our houses and we cannot just abandon it like that.” Another occupant Mrs Tessy Ajakaye said, “The lines were mounted years back and then we were so ignorant of the impending dangers attached to it. But now, we have full knowledge of it because we see how it sparks regularly and sometimes ignites.

“We have complained to regulatory bodies and our district heads but nothing tangible have been done to avert this. They keep saying the lines were enacted by machines and cannot be uprooted easily but can be shifted but it will cost a whole lot except the residents are willing to contribute money,” she said. Mrs Ajakaye plans to stay in the same location despite the challenges because “I do not have money to start relocating to another place,” she said.

Rev. Yusuf Chetubo, who had stayed in the area for over a decade said when the power tension lines were mounted, they had thought it would bring development to the area ignorant of its inherent dangers. “Seeing the havoc it is causing, our lives are in danger and we are appealing to the government to come to our aid because we are at risk of getting electrocuted,” he said.\

The Nigerian Electricity Regulatory Commission (NERC) safety regulation titled, ‘Nigerian Electricity Supply and Installation Standards Regulations 2015’ stipulate that for a 330kV transmission line, a 50-metre distance split equally must be maintained on both side of the lines before erecting structures. For the 132kV transmission line, the distance is 30 metre. For the power distribution side, 33kV and 11kV lines must have both sides distance of 11 metre.

“For safety reasons, no structures shall be built under the overhead line Right of Way (RoW). Where such structures are built after the construction of the lines, the licensee shall not be liable for any mishap caused by contact with the line,” the law further stated. While some Karu residents demand compensation from the government before relocating, people in Tundun Wada, Lugbe had their houses marked by the Transmission Company of Nigeria (TCN) for demolition for building under the power line.

Over two years since their homes were marked they await the imminent demolition exercise. They had averred that the compensation must be paid before the demolition while they remain in their houses.  The Federal Capital Development Authority (FCDA) described the structures as shanties, residents said their houses were not shanties but buildings. The chief of the community, Muhammad Usman said more than 750 houses are built under the power line while there were several others to be demolished for the construction of a 330/132/33KV substation.

He said they had been living in the area for over 20 years. The chief said though it was dangerous for houses to be built under the high tension, “but it has not killed anybody in the past because there was no power supply in the high tension cables.”

The residents were not bothered by the risks but the compensation to paid by the government. One of the residents that had lived in the area for about six years, Simon Okuma, said he paid some money to an FCT native to purchase the land where he built his building. “Government cannot just come and push us away from where we are living without adequate compensation,” adding that compensation had to be paid before they vacate the area.

Source: Dailytustng

Who Will Rescue Nigeria Housing Sector?

Shelter along with food and clothing remains essentials of life identified by Abraham Maslow’s human basic needs. There is a sense of pride, security and level of fulfilment humans derive from owning their homes.

It has been well established a fact that housing is very important to mankind and to economic growth.

Housing problems abound in Nigeria both in rural areas and urban centres. The problem in the rural areas has to do with qualitative housing while the problem in the urban centre is both quantitative and qualitative in nature. Almost half of Nigeria’s population live in cities, with 80 percent living in overcrowded slum areas and generally poor living conditions coupled with inadequate infrastructural amenities. Rural houses are of generally poor condition, and they are characterized by lack of potable water, toilet and decent environmental conditions.

Since independence, all the housing policies by the federal government, though laudable, have failed because they were built on unsustainable tenet that houses will be provided by the government. This is an anomaly which must be corrected for the country to move forward and achieve a remarkable reduction in the housing deficits.

The presidential technical committee set up by Former President Olusegun Obasanjo headed by Prof Akin Mabogunje did set a great agenda for housing. In fact, some of the surviving housing projects in Nigeria today are results of that highly respected committee.

Also under President Goodluck Jonathan, the then Minister of Finance deserves kudos for getting the World Bank’s support for housing finance which many thought would have put the country’s mortgage system in a better shape.

While these moves are commendable, they have suffered due to lack of commitment from stakeholders who succeeded them.

A good number of housing advocates have bemoaned the selfishness of most public and private sector players in the industry who only target short term projects that are not sustainable in any way.

The quality of housing stock in Nigeria is poor because the construction industry is driven by cost minimization rather than value maximization. The lack of a regulatory body and a non-existent legally binding building code has led to the continued poor performance of contractors leading to poorly constructed buildings.

Given the current state of things in the Nigeria housing sector, it will be difficult to provide housing unless issues of access to land, commercialisation of building approvals, provision of secondary infrastructure, affordable housing finance and many others are addressed.

It is obviously beyond the might of the government to address all the challenges in the housing sector, and that is why a lot of stakeholders are advocating for more corporate personalities and businesses to focus their corporate social responsibilities towards housing.

While acknowledging the support of philanthropists like Alh. Aliko Dangote in spending a lot of money in providing houses for IDPs, there is need for more corporate social responsibilities and constituency projects in the area of social housing for the masses. The productivity of people will improve if they have access to their own houses.

It is now expected that the stakeholders in the sector begin to speak with one voice especially when dealing with the government. They need to persuade the government to address some critical problems facing the sector, and this can only happen when stakeholders are united in their advocacy.

Without a doubt, the current administration headed by President Muhammadu Buhari needs to show more interest in the housing sector. While it is laudable creating a body like Family Homes Funds, there is need for more support for all housing related agencies to deliver on their mandates.

There are a lot housing sector related laws like the foreclosure law, the land use act, housing sector regulation and many more that needs to be passed both at the federal and state levels. There is need for more commitment towards regulating the activities of private sector in order to deter shylocks, unprofessional and fraudulent practises.

A couple of institutions in the housing sector have begun initiatives like rent to home and cooperative housing to make it easier for those in need of a home have affordable access to them. Such initiatives should be given more support by the government.

It is only through such strategic interventions that the Nigeria housing sector can be functional in a way that it can deliver affordable housing for millions of Nigerians who are currently homeless and stranded. Opportunities and potentials abound in the housing sector, but only possible if the right things as mentioned above are done.

36 years After Metro Line Dream, Lagos Traffic Still Defies Solution

 

These words capture the dream of Lateef Jakande, first civilian governor of Lagos State (1979-1983), when he flagged off the Lagos Metro Line project on July 16, 1983, projected to cost N689 million at that time. It was a major attempt at introducing an intra-city rail system in Nigeria’s commercial city.

Jakande’s Lagos Metro Line project was conceived against the backdrop of the city’s seemingly intractable gridlock.
On March 29, 1978, Daily Times had led with a screaming headline ‘LAGOS TRAFFIC DEFIES SOLUTION’, with a rider, ‘Chaos despite new measure’. It was to resolve this traffic situation that the metro line was launched.

According to Jakande’s projection, the first phase of the project was to be completed in July 1986. It was to have 30 trains, each running 28.5 kilometres on raised concrete tracks from Marina to Agege.

The 30 trains were projected to carry 88,000 passengers per hour, which is 2,288,000 passengers in 16 hours, about half of the population of Lagos going by the World Health Organisation (WHO) calculations at that time.

The Jakande-led government was responding to a transportation study said to have been commissioned by the Federal Government in 1974, which indicated a crisis situation with regard to traffic in Lagos, compared to what was the case in the early 1970s, unless the challenge was urgently addressed.

The administration had planned to execute the metro line project in two phases, with the first starting from the Marina to Yaba. This phase was slated for completion in July 1986, while the second, commencing from Agege to Yaba through Oregun and Ikorodu Expressway, was slated for completion in March 1987.

BusinessDay findings reveal that the two sections were to have 19 stations spaced 1.5 kilometres from each other, with two platforms of 140 metres in length, and six metres wide.

The trains were to be made of aluminium to reduce power consumption and maintenance cost. They were to be powered from two major sources, and a traction supply, which would come through 10 rectifier substations linked to the defunct National Electricity Power Authority (NEPA) low voltage network. The other was the 415/250 volts required to operate fixed auxiliary equipment.

The Lagos Metro Line Limited (LML), a limited liability company inaugurated in 1979 and registered in 1980 to oversee the project, was expected to break even and generate its own funds by its fourth year of operation, having revenue of N62.5 million per year at an operating cost of N12.5 million.

It was projected that the surplus would be used to service its short and long-term loans. And by its fifth year, the LML would have generated its own funds and serviced its capital loans. Interinfra, a French consortium of 19 firms, was to handle the project.

The project, however, suffered a setback as the General Muhammadu Buhari military junta overthrew the civilian administration of then President Shehu Shagari in a coup. When the Lagos Metro Line project was scrapped in 1985 by the Buhari regime, it was said to have recorded a loss of over $78 million to Lagos’ taxpayers, according to information obtained from Wikipedia.

About 36 years after the bold attempt by the Jakande-led administration, the traffic crisis has worsened as the population of Lagos has grown geometrically from about 5 million to an estimated 22 million residents.

With a vehicular density of over 222 vehicles/km and largely unplanned network of roads, Lagos, the smallest of Nigeria’s 36 states by landmass, sitting on 3,577 km², faces myriad of challenges.

Though one administration after another in the state has made some attempts at containing this challenge, their best has not been good enough, hence the state which is Nigeria’s economic hub is gradually but steadily grinding to a halt due to snarling traffic situation.

Apparently, the gridlock which is everywhere and anywhere in the state, including the very exclusive neighbourhoods, has defied solution which, in some cases, comes right from the Federal Government level.

Besides the provision of roads infrastructure, the state government, during the administration of Babatunde Fashola, had to come up with two separate but interrelated laws aimed to control traffic situation in the state. These are the Lagos State Traffic Law and the law setting up the Lagos State Traffic Management Authority (LASTMA).

The traffic law, which was so effective in its early days that it demanded a psychiatric evaluation of any person who drove against the normal flow of traffic or who failed to comply with any of its provisions, failed due largely to lack of enforcement.

Today, it seems as though the state never had any such law in place. LASTMA which came out smoking with some level of positive results soon became an octopus, assuming larger-than-life image with its officials extorting motorists on spurious charges, leading to its widespread condemnation.

Though officials of the authority are still seen everywhere on Lagos roads, their impact is quite minimal. They are no longer serious with their work after former Governor Akinwunmi Ambode clipped their wings, telling them to stop the harassment and extortion of motorists while on duty.

The reconstruction and expansion of major highways in the state are also part of measures the state government has taken to contain traffic crisis. A ready example of this effort is the Lagos-Badagry Expressway which is being expanded into 10-lanes with a light rail in-between.

But the expressway has become an albatross. After 10 years with very little to justify the efforts, it has become a nightmare where motorists spend upwards of five hours within a stretch of 3km.

In the midst of these efforts and failures, the state, its residents and the economy have continued to suffer. It has become unbearable to live in the state. This was reflected in the ranking of the state as the third most miserable city in the world by an international ranking organisation.

Housing Development

Both travel time and cost have gone up in recent times. Apart from impoverishing the residents, the crisis situation is also diminishing the economy of the state as it affects productivity significantly from the level of artisans to CEOs in the corporate world.

“The congestion we see everywhere in Lagos today is as a result of action and inaction of the state government,” Adebola Adefuyi, an environment and regional analyst, told BusinessDay.

He explained that the inability or unwillingness of the successive governments to enforce existing traffic and street trading laws are major causes of the present crisis situation.

Adefuyi was of the view that for so long as the state government shied away from creating new city centres in places like Ikorodu, Badagry, Abule Egba and other far-flung suburbs, so long will everybody find their way to the already congested city centres, and for so long too will this crisis continue.

Ezeillo Nnamdi, a Lagos resident residing in one of the suburbs, agrees, stressing that the state government should, as short-term measure, make the roads motorable because, according to him, “There is no road to drive on in Lagos at the moment.”

Source: Businessdayng

 

Solving Nigeria’s Housing Deficit

One sector of the Nigerian economy that has experienced rapid growth despite facing several challenges is the real estate sector.

Even in the face of a recent economic downturn, the sector has been developing in leaps and bounds with several buildings springing up, most especially in new locations predicted to become prime destinations in Lagos, Abuja and Port Harcourt.

Nigeria’s real estate sector is one of Africa’s greatest potential while also representing the continent as a major competitive player in the global real estate market, thus appealing to investors as a destination for investment.

Despite the expansion, the growth being experienced is far from solving the over 22 million housing deficit experienced in the country.

This comes in a time where the emerging middle class of the economy is seeking affordable housing in a clean and decent environment, which is far from the country’s present reality.

The stabilisation of the market claimed by an investment analysis report published by Global Property Guide can be argued to be relative. This is because the growth experienced in the real estate market, according to the report, favours mostly the highbrow areas like Ikoyi that experienced a growth of 20%, followed by a 12% growth in Ibeju Lekki while areas like Ajah, Gbagada, Surulere and Yaba were relatively steady in the prices of property.

Guess what, areas Ikorodu, Alimosho and Isolo experienced a decline. Reasons for this decline in lowbrow areas are simple: they are connected to issues yet to be addressed by the government. Issues like poor infrastructure, bad roads, traffic and congestion, poor planning and development alongside other pertinent issues that have served as hindrances to such areas

Therefore, if Nigeria must solve its housing deficit issues, it must look at the issues holistically and develop concrete plans that will address basic needs that will promote equal growth in all its urban locations.

It is only normal for investors to purchase property in areas where there is good road connectivity, proper urban planning and development, etc.

This is the reason the gap between the poor and the rich in Nigeria keeps widening because even a child that is born today can tell you areas that are meant for the rich.

Sadly, some areas that experienced a decline in house price used to be seen as highbrow areas back in the days.

However, the Nigerian system is such that when there is a new location that the government is paying attention to, the affluent and well-to-do immediately move out from where they reside to the new location.

Areas like Isolo, Ikeja, Ogudu, and Ilupeju used to be regarded as highbrow; sadly, not anymore because the roads in these areas are now very bad that people experience terrible traffic almost on a daily basis. There are now encroachment and shanties in those areas with people hawking all over the place. This was not how it was before now.

As long as the government is not paying attention to these issues, it is not creating an enabling environment to have an emerging middle class like in most western economies.

The model should be such that when the affluent staying in those areas choose to move to a new location, the old locations should not be abandoned but maintained and adapted for the emerging middle class. And such areas should be well-maintained even as the government is making sure the needed infrastructure is in place.

There is nothing wrong with the government focusing on Lekki, and its environs. But I can boldly tell you that every new project, plan or infrastructure is being cited in new locations like Lekki and its environs leaving other old locations to bare.

The Lagos State Governor, Babajide Sanwo-Olu recently signed a $629m facility to complete the Lekki Deep Seaport, which is very good. But, let us ask some important questions like:

On completion of the Lekki Deep Seaport, what will be the fate of the Apapa port?

What plans does the government have on improving the state of Apapa port, from road connectivity to decongestion and improving its infrastructure?

Why can’t the government evenly distribute the important projects across the state and not just focus on one area?

Housing Development

What plans does the government have in making sure that the emerging middle class whether being a government or a private-sector worker have access to mortgage financing?

Why is the government not investing in building affordable housing themselves just like it is done in the western world?

Everyone is happy about the proposed increased budgetary allocation for housing and infrastructure. Have we asked if the government has any visible plans on the ground to make sure the increased allocation affects the lives of low-income earners and the middle class?

There are so many other questions and important issues that need answers if the government wants to solve the housing deficit in the country. Right now, all the government’s attention is on new locations and that cannot help the country.

Source: Punchng

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