Why affordable housing will continue to drive demand in real estate sector

In the last couple of years, affordable housing is the only segment where transactions have happened in real estate,according to Pradeep Aggarwal,Chairman of the National Council on Affordable Housing, ASSOCHAM. In this interview first published by livemint.com ,he talks about why the segment is getting traction and its prospects.

Overall, the real estate market is witnessing subdued demand since the last few years, but the affordable housing segment is getting some traction. Why is that?

There are various reasons why the real estate market is in such a situation since the last 5-6 years, but the most important factors that affected the real estate sector was absence of a regulator and mismatch in demand and supply. In any unregulated industry, it is easier to take things for granted and this has backfired in real estate. Besides, mismatch between demand and supply and decline in speculation-driven demand impacted sales. Now there are no speculators because those unrealistic price escalations are not possible anymore.

As far as affordable housing is concerned, you need to understand that 95% of the country’s population consists of the lower middle class or economically weaker section. These sections are driving demand in affordable housing. Moreover, in the past few years, the government’s focus and incentives to developers as well as homebuyers was why demand in the segment went up. I look at affordable housing from a different perspective; it is not just real estate, it is the need of the masses.

In the true sense, the real estate market is now emerging in a different manner and in the next 10 years, it will see a turnaround. The premium segment will also see demand, but affordable housing will drive the sector.

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If I talk about numbers, as per the industry report, affordable housing witnessed a growth of 22% in sales during 2018. Even this number is not big because there are few developers in this segment at present. Demand is huge and supply is limited. Once more developers start offering projects in this segment, it will witness tremendous growth.

If there is such robust demand, why are more developers not venturing into this segment?

Let me try to explain it through an example. Ten years ago, many people—even the industry—was reluctant to adopt digital banking or online shopping. But things changed over a period of time. Now the business depends on volume rather than margin and everyone is now convinced that to enhance business, digitisation is important in the retail industry. Similarly, in the real estate sector, developers in the mid or premier housing segment were used to a profit margin upwards of 25-30%, whereas affordable housing segment can offer a margin of around 10% only. It is very difficult for them to do business at a lower margin. But they need to understand that here we have volume; margin is low but volume is high.

Besides, most established developers already have many under-construction or completed projects which they sold at a higher rate of ₹5,000 or ₹6,000 and above per sq. ft, now they don’t want to get into a segment where price points are around ₹3,000 per sq. ft. It would be difficult for them to justify the same.

Who are the real buyers of affordable housing? Are they only end-users or investors too?

It is difficult to segregate the buyers. But about 70% of the buyers in this segment are salaried individuals. This salaried class, I suppose, is buying it either for own use or may opt to rent it out later. I don’t think there are any speculators in this segment, because if I talk about Haryana government’s affordable housing policy, there are restrictions on transfer of property till the buyer gets possession and even a year after that. I consider them as end users or serious investors, and not someone buying for speculation.

The other category of buyers is self employed (10%) and a mix of senior citizens and millennials and others having a low budget (20%).

However, many people are considering affordable housing as an investment opportunity because of various reasons such as price difference—there is a cap fixed by the government on the per sq. ft rate that a developer can charge under the affordable housing scheme, other projects in the same vicinity will cost you at least 25-30% more. So someone buying an apartment in affordable housing projects will simply save 30% or in other words make a return of 30% straightforward while buying the property. Price appreciation over the years will be additional. Other factors that buyers consider are quality, size of apartments and specification of projects that are defined and monitored by the government, developers can’t manipulate them. There is strict deadline to complete and provide possession. Besides, the small ticket size makes it more marketable. So all the mentioned factors makes affordable housing more promising compared to any other real estate segments. It’s a win-win situation for both home buyers as well as investors.

What is your overall perception on the real estate market?

New launches have almost stopped in the premier housing segment in the last few years because there is already a lot of inventory in this segment and demand is less. So I believe given low demand, developers will focus only on clearing the inventory in 2019 and even in 2020. So, the next two years will continue to remain tough for developers in the premier segment. However, as I mentioned earlier, affordable housing will do well for a long period as there is very less supply and high demand.

NBFC crisis can impact affordable housing

How has the recent liquidity crunch owing to the NBFC (non-banking financial companies) crisis impacted or will impact the affordable housing segment?

No doubt both developers and home-buyers got impacted because of the NBFC crisis. While home-buyers have other options to avail loans, for a developer, in the present scenario, it is difficult to obtain loans from sources other than NBFC. The government should step in and strengthen the NBFC model otherwise it will be a major setback for the affordable housing segment.

The government should also consider putting affordable housing in the list of priority sector lending for banks as well as other financial institutions. Easy availability of loan will boost the sector and make it more feasible for developers to enter it.

The government should also work on the approval process for affordable housing. There should be a separate department and procedure for approvals and clearances, and we should get approvals in a time-bound manner. Margins are very thin in this segment and any delay can impact the financial feasibility of projects.

How Eko Atlantic City will save Nigeria’s economy and future-Chagoury

In this interview, first published by Business Insider, Ronald Chagoury Jr, the Vice Chairman of Eko Atlantic city, bares his mind on the vision and purpose of Eko Atlantic City, the challenges faced building it so far, and what the future looks like, for the city and for Nigeria.

 What is the grand vision of Eko Atlantic City?

Ronald Chagoury Jr: First of all, Eko Atlantic was initially built as a defence against coastal erosion for Victoria Island and parts of Lekki. The idea behind it was how we could reclaim all the land lost to coastal erosion in the past 100 years, create long-term protection, and then become a business centre for West Africa and eventually Africa.

We believe that Lagos needs to have a financial centre and Eko Atlantic will become the platform for that to happen.

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What are some of the biggest challenges you’ve faced with the project so far?

Ronald: Initially, when we were fighting the ocean, it took us a few years to master the technique. But now we understand it very well. Technically, in the beginning, there was a steep learning curve, but today, whether it’s building the state of the art infrastructure or seashore protection, we know how to do it very well.

The second step is a question of what’s really happening in Eko Atlantic. How do we get the message out to the world? As you noticed, as much as we can show you videos, it’s very different when you actually come on site and appreciate how much work has been done.

How do you think you can convince Nigerians that a project as expensive as this is good for them when most of the people in the country can’t even afford it?

Ronald: Our core business is selling land to developers. We then invite them to build. Now, we’ve been seeing a lot of demand for all sorts of products, from high-end residential apartments to efficient smaller apartment units, whether it’s one bedroom, studio apartments, two-bedrooms and there’s going to be a very much bigger market for that.

At the same time, in terms of affordability, we invite innovation. For example, the shared office spaces allow for a low entry point for startups or any company to come into Eko Atlantic. So, it comes down to innovation. Eko Atlantic is the future. We have the infrastructure, it’s state of the art, and the more people come in, the more they understand this. That’s why we see a lot of interest, especially now, for movement into Eko Atlantic.

Something that I think about a lot is, what will be the city’s contribution to Nigeria’s economy? How do you see Eko Atlantic impacting Nigeria’s economy in the next 5, 10, and even 100 years?

Ronald: First of all, on its own, the building of Eko Atlantic is a massive job creation process. During the construction phase, there’s are a lots of jobs created.

Can you estimate how many jobs have been created already?

Ronald: I mean, there have been thousands of jobs already. Then we can get to the tens of thousands if we add (jobs created) indirectly because of the supply of material, the know-how, the consultancy, it goes on.

The more we advance, the more construction comes up, and more jobs are going to be created. This is direct construction jobs and as we know, Nigeria has a huge shortage of homes. Just the construction industry can transform the employment landscape of Nigeria, directly and indirectly with all the supply of materials, consultancy, et cetera. And Nigeria is a very fast-growing country, we’re 200 million people today.

So, if Nigeria’s population is going to grow by 500% over the next 100 years, every 10 million people or 50 million people that are born will have huge requirements of infrastructure and housing, and Eko Atlantic is an example of what needs to be done.

Is there a deliberate effort to bring in Nigerians into the fold by allocating a percentage of the jobs to them?

Ronald: So far, Eko Atlantic has been probably 95% Nigerian workers, maybe more — whether it is job creation, investors or developers, our core market has been Nigeria. 90% of the work is done by companies in Nigeria or ourselves internally, the teams that we built for Eko Atlantic.

The only major element that is outsourced is the sea reclamation because that’s very specialised. Other than that, we produce our own concrete blocks, we even produce our concrete poles, most of our underground pipes are produced here in Nigeria.

Let’s talk about the housing deficit. In Nigeria, that deficit is about 17 million, according to the last research data, and Lagos has a significant portion of it. Do you see this figure falling anytime soon?

Ronald: I don’t. The figure was a few years ago, 17 to 20 million and it’s 5 million in Lagos alone. That was when the population was less than 200 million and Lagos’ population was less than 20 million people. We were, I think, at 15 million people back then and the supply is nowhere near the growing demand.

Something that can help, for example, is if at some point there’s a solution that comes up for the mortgage industry (currently, less than 3% of Nigerians own a mortgage), that would completely revolutionise the market. The amount of mortgages in Nigeria as the percentage per GDP is tiny compared to South Africa and much smaller compared to the US.

So, we have a long way to go. If that industry kicks in, it would ease home ownership which would then create a huge amount of construction projects throughout the country, that’s for the housing deficit, and it would also create more jobs. There’s a whole positive cycle that comes out from that.

So far, what have been the most exciting aspects of the project for you?

Ronald: It’s really a learning experience. Today, Eko Atlantic is an internationally recognised project, due to the size, location and quality of it. It forces us to think ahead of the curve. Transportation is changing very fast with ride-sharing, this is my favourite example. Ten or fifteen years down the line, if autonomous cars kick in, are we going to all want our own cars? That changes the way we have to design our city, our roads, our parking spaces.

If we are looking at technologies like 5G that will be coming in the near future, that opens the door for the Internet of Things. How’s that going to play a role in the city? So we have to keep these things in mind and have the base infrastructure that allows for them in the future.

It goes on. Simple things like how we are going to be living. Are we going to be living in big apartments? Do we have to start thinking about micro-apartments, like in New York or Hong Kong? Are we looking at shared living as well? That is a new concept coming out of Europe. Still early days, but are start-ups going to create Nigerian versions of it? And that could have a huge impact on the housing industry.

Most of the amenities in the home are not used 90% of the time. So, what if those were shared amenities? A kitchen, for example — a centralised kitchen versus every apartment having its own fully-equipped kitchen. That becomes efficient. If we start thinking a bit in that direction, we have a lot of talent in the country that can start finding innovative solutions for these challenges.

Final question – what do you love most about your job?

Ronald: Just that there’s a lot of innovation. As I often say, we’re coming in at a later stage of city development, which means we get to learn from a lot of the cities built in the last 30 to 50 years, we get to stay ahead of the curve and leapfrog most of the technology applied in cities.

The first buildings straight of the construction are energy-efficient because that’s the standard today. Ten years ago, it would have been a lot more difficult. Today, that’s the basic requirement so we end up having an energy-efficient city from day one. Also, we get to benefit from all the new technology coming in,that makes it exciting.

Source: Ronald Chagoury is the Vice Chairman of Eko Atlantic city, a new state-of-the-art-city set to become the new financial center in Lagos, Nigeria.

Foreclosure Law:Kaduna Is The Next Best Thing In The Mortgage Market -Sani Abbas

Mohammed Sani Abbas is the Chairman, of Kaduna State Mortgage and Foreclosure Authority, In this interview with Housing news, he spoke on the Foreclosure and Mortgage law, investing in Kaduna real estate sector, security and other issues.

Can we know you?

My name is Mohammed Sani Abbas, I’m a lawyer, a banker I’ am also into mortgage business, I’m a law graduate from Ahmadu Bello University Zaria, this year is my 38th year at the bar, and I am among the first set of Nigerians that got mortgage license in the early nineties. I’ am currently the chairman of Kaduna State Mortgage and Foreclosure Authority.

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Kaduna state has scored a big mark in the country for establishing this unique agency to solve the problem of foreclosure on mortgage matters in Kaduna,what is the status of your activity in Kaduna State Mortgage and Foreclosure Authority?

Kaduna state is the 1st to domesticate the mortgage foreclosure law in Nigeria, and established  an agency, I’m pleased to announce to you that we are the fore bearers of the mortgage and foreclosure law, what we have been able to achieve since we assumed office is that we have a timeline of things that we want to do.

This is entirely new in the country, one of the key things we are trying to do now is to establish offices in all the Local governments in the state, and secondly we are convening a national mortgage and foreclosure seminar. It’s going to be the first of its kind in Nigeria.

It’s going to be hosted in Kaduna, we intend to invite all, the property development companies in the country, all primary mortgage institutions, and all stakeholders In mortgage.There we hope the law will be put to test, and we will be able to sensitise Nigerians about the need for other states to adopt the mortgage and foreclosure law.

With this law now in Kaduna state, what is your message to investors?

The message is that Kaduna state is open for business, we are lucky to have a government in Kaduna state that is forward looking, that is why we are able to be the first state to establish the law, secondly we are looking at how to invite investors in real estate, Kaduna is the biggest city that is closest to Abuja, a lot of prominent people from the north-east have moved their families to Kaduna state, primarily because of the unrest in the North-East. So Kaduna state is growing, that is why there is a need for us to attract investment in real estate.

One of the things that we have done now, is that there is a system that has been established whereby genuine investors in real estate are invited to come to Kaduna, engage with us, apply for land and within the shortest period of time you will be given a land.

Provided you satisfy the requirements that have been set up

What is the government doing in the area of security to ensure investors’ confidence in the state?

The government is doing everything possible to secure the state especially with the establishment of the Kaduna state vigilante service to complement the efforts of the police and other security agencies.

On a final note what is your message for stakeholders as we move into 2019?

My message is very simple, Kaduna is open for business, it is the nearest big city to Abuja, it is linked by fantastic road network, and a functional train service, we have enabling laws that protects investors, we will like to call on the major stakeholders, FMBN ,CBN, commercial banks and other Primary Mortgage Institutions to come to Kaduna. We are also calling on the NMRC ,the NHF and Family Homes Funds to come to Kaduna. Kaduna is the future for real estate in Nigeria, outside Lagos and Abuja, we think Kaduna is the next best thing that can happen to mortgage institutions in Nigeria.

Affa Dickson Acho

How A Gabonese Journalist Built A Multi-Million Dollar Media Relations Company

Franco-Gabonese entrepreneur Nicolas Pompigne-Mognard is the founder of the APO Group, a  leading media consulting firm and press release distribution service in Africa and the Middle East. The company, which Pompigne-Mognard founded in 2007, employs close to 80 employees across its offices in Switzerland, Dubai, Senegal and Hong Kong, and has an annual turnover of  several million dollars. APO’s bluechip clients include GE Africa, Dangote Group and DHL among others.

Nicolas Pompigne-Mognard recently stepped down as CEO of APO Group, and will now assume the position of  Chairman, focusing on delivering high-level counsel for APO Group clients and developing his own investment fund dedicated to Africa.

He recently recounted the story of APO’s early beginnings and mused on the evolution of the media relations business in Africa.

You founded APO Group 11 years ago while you were working as a journalist for Gabonews, an online publication. Relive that period for us and walk us through the series of events that led you to establishing the company.

I was a European correspondent for Gabonews, and I soon realised how difficult it was to get hold of Africa-related press releases, press briefings and official statements issued by European-based institutions, NGOs, diplomacies and governments.

As a journalist, I needed to receive all this information in order to stay on top of everything that was happening between Europe and Africa at a diplomatic, economic – even a cultural level. To access press releases, I had to subscribe to all the mailing lists and RSS feeds. Most organizations were only publishing their press releases on their websites, naively hoping that journalists would be constantly monitoring them all to see if anything new had been published. I was spending hours and days trying to reach the relevant people so they could send me their press releases.

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And as the European correspondent at an African media organization, I was also supposed to monitor all content issued by African governments and institutions about any European matter. Receiving press releases issued by these organizations was even more difficult. As I struggled, I realized that it was extremely problematic for any journalist to get all this Africa-related press release content – and that had some very bad consequences:

First, the inability of African journalists to access this information was reinforcing their dependence on Western media and press agencies. Second, most of the press releases issued by African governments and African institutions never reached the international media community at all. Many even failed to reach the African media community.

We have to remember that, back then, international institutions like the African Development Bank, the World Bank and the International Monetary Fund were having serious discussions about the role of African media in the promotion of good governance, and we were starting to hear about the concept of “communication for development” – that is the part media has to play in the transparency and accountability of organizations involved in public investment in the region.

But what really triggered my decision to act was a series of discussions I had with the President of the African Development Bank at the time, Donald Kaberuka, who explained to me how crucial the dissemination of news about Africa’s economy was to the development of the continent. We needed to reverse the tide and make sure the international media community and all African media had access to news releases announcing new investments in Africa, new CEO appointments, new startups, new international events, new awards and so on.

Of course, all this positive news is typically spread via press releases.

A few months later, APO started signing strategic agreements with Bloomberg, Reuters, LexisNexis, Dow Jones Factiva and other major international players to guarantee the worldwide distribution of thousands of Africa-related press releases in a standardised, internationally-recognized NewsML format for the first time.

That’s how it all started.

APO Group is currently the leading media relations consulting firm and press release distribution service in Africa and the Middle East. What else does the company do apart from these flagship services?

APO Group manages an extensive variety of services, ranging from TV and photo production, distribution and monitoring, to Online Press Conferences, government relations and more. But what really makes us unique is our ability to not only advise clients, but also to implement their plans using our own proprietary tools across all 54 markets of the continent.

And this is what our clients really need: a single interlocutor with deep knowledge of Africa, the tools to deliver the right results and an ability to stand alongside them in whatever challenges they face in their communications strategies.

The company’s turnover grew by 50% last year and is forecasted to grow by 60% in 2018. Much of this growth is because of the amazing success of our Advisory division.

Most of our clients understand that the most effective way to use APO Group is not as an ad hoc press release distribution function, but as a holistic consultative partner.

57 of the biggest PR agencies in the world worked with us in 2017 because they truly understood the value of what we provide. We have over a decade of experience so we can benchmark their strategies at a local level and throughout the continent as a whole. Not only do we immerse ourselves in their clients’ communications plans, we implement them and provide monitoring data to evaluate their success and return on investment.

What were some of the challenges you encountered in the beginning, and what were some milestone moments for APO Group?

It’s actually quite difficult for me to mention milestone moments for APO Group. When a company is growing fast, you are living milestone moments quarter-by-quarter.

But I certainly encountered plenty of challenges in the beginning!

I was a journalist. I studied law. I really was not prepared to create, much less develop a multinational company.

I built APO Group from my living room – literally – and during the first years I had to be the IT manager, the sales consultant, the PA, HR, Finance, Marketing – everything. I had to learn it all from scratch.

Not to mention, my English was very poor.

I remember one day, I was calling the head of communications at Boeing. I had noticed they just made an announcement related to Africa and I was hoping I could convince them to try my press release distribution service. The problem was my English was terrible.

During the discussion, and most probably to get rid of me, my contact says, “you know what, why don’t you just send me a quotation.”

“Quotation?” I had never heard that word before. I didn’t know what it meant. But with my tiny amount of English I said “Yes, of course, I will send you a ‘quotation’. Thank you, bye!”

And the first thing I did was to search Google for ‘quotation’. I wasn’t even sure about the spelling. When I realised that the guy just asked me for an estimated cost, I started doing somersaults. I called my wife in to tell her the good news: “Boeing just asked me for a ‘quotation’!” And of course, I’d never done a quotation before so we had to find a template on the internet to create the very first one.

Since then I’ve never stopped learning. The past 11 years have been a constant education. And many mistakes have been made along the way. My most rookie errors in the beginning were hiring misjudgments. I made poor choices with the first three people I brought on board.

This is not a criticism of those three individuals. They were my mistakes. I had wrongly assessed the profiles and skills the company needed at the time. I realize that now. When turnover is starting to take off, and the company is still very small and fragile, you really have to make the right choices or the dream can be over within just a few months.

In my experience, creating and developing a company is one of the most difficult things a human being can do. It requires a huge amount of time and energy, a lot of sacrifice, a healthy lifestyle and a lot of others ingredients too, which – even if they are all put together with love and care – do not always guarantee success.

It goes without saying, you will also need a little bit of luck. The right encounters, the right timing, not to mention (and in my view, most important of all) the unconditional support of a loved one or family.

How has the media relations business in Africa evolved over the last decade, and how has APO Group evolved along with it?

What I think what has changed the most is perception.

Ten years ago, I was in the European headquarters of PR Newswire, in London. At the time, they were considered the leading global press release distribution service and there I was explaining to several of their senior executives how Africa will soon represent a huge market for press releases – and why it was time for them to invest in the continent. It was 2008, remember, and they basically laughed at me.

Ten years later, APO Group is receiving purchase offers, strategic partnership offers and M&A transaction offers from some of the leading players in the industry.

They are seeing unprecedented demand from their clients for press release distribution in Africa – and they simply don’t know how to serve them. And this is just the beginning. According to the World Bank, the African population will double by 2050, reaching 2.4 billion. The latest United Nations population report, published in 2017, says that by 2100 Africa will be home to 40% of all humanity!

A recent McKinsey study said “Africa is poised for economic acceleration akin to the Asian boom”. There are around 440 US companies and 480 German companies who have been operating in South Africa for several years now. Today, most of them are planning their expansion across the continent to get their chunk of this huge untapped market.

This will obviously translate into more media relations spending, especially if you consider a growing trend where communicators are re-evaluating their mix of advertising versus PR.

African consumers are becoming savvier. They are starting to value news and information above blatant advertising – and that creates opportunities for the media relations business.

In your experience, what are the biggest problems that news agencies are facing today?

It’s partly to do with this idea of African evolution: More savvy Africans means a better educated, more demanding audience. Their expectations are higher, so they require more diverse, better quality content.

And as the audience develops, so too the media must follow – and that means better technology, better innovation, better content and – crucially – better journalists.

I’ve been in touch with a lot of African journalists, and when you ask them what they need most desperately above everything else, they all say: training.

That tells you everything you need to know about the evolution of African audiences: They are moving too fast for the talent to keep up. So, finance plays a big part. If you want to attract the best talent to produce the highest quality content, you have to invest in their development.

Talent will always mean the difference between success and failure – so the greatest challenge facing African media houses is making sure their journalists are meeting the expectations of their audience.

How do you see the future of news agencies, particularly regarding technology and its changing role in the news industry?

Clearly, continuous digital transformation is key. Media houses must keep evolving if they are to survive.

The days where they could rely on advertising as a sole revenue stream are long gone. Consumers are not browsing for advertisements – they are browsing for content – so that’s where the focus of these outlets needs to be. The challenge is to find new ways to monetize content and invent new models.

One area we’ve been focusing on at APO Group is media monitoring.

Right now, in Africa, it’s very poor.

That is partly because a lot of African media are offline, and print, TV and radio monitoring across 54 countries is impossible to do cheaply and painlessly. As the digitalisation of media continues and technology improves, monitoring becomes a critical part of the content value proposition. It produces metrics, data and insights that, in turn, encourage spending.

In the last few years, big international media players have started to come to Africa. CNBC, Euronews, Forbes, CNN and BBC have all increased their presence on the continent. The Washington Post announced this week they will be opening a new office in West Africa, explaining that they want to extend their reach in Africa – “because the continent is projected to account for more than half the world’s population growth over the next three decades”.

If the international media can see the potential, the African media needs to make sure it keeps up.

What are your greatest accomplishments at APO Group? Could you share a ballpark figure of APO Group’s annual revenues?

A lot of the work we are doing – around 70% in fact – is providing strategic advisory services for leading multinational companies, therefore many of our biggest accomplishments are covered by non-disclosure agreements. Let me just say that in 2017, we organized 250+ interviews, including off-the-record interviews, placed dozens of opinion pieces, organized tens of journalists round tables, press conferences and press trips, and actively participated in helping to shape some of the most important business stories in Africa.

Our project managers are in constant contact with some of the most influential media in the world, from CNN to CNBC, BBC to Al Jazeera, The Financial Times to The Wall Street Journal. We are organising interviews and media events in the US, in London, in Oman – but also in very complex African markets such as Eritrea and Somaliland. That’s something we are extremely proud of.

While I’m not allowed to disclose our exact turnover, I can give you some figures. Our turnover grew by 50% in 2017 and is projected to grow by 60% in 2018. Our press release distribution activity grew by 44% in volume in 2017 and is projected to maintain that growth in 2018, while our advisory division is projected to grow by 50% in 2018. Our five-year-plan consists of multiplying our profit margin 4.5 times.

But I would say my greatest accomplishment is to have turned my 10,000 euros of savings – which I invested to create APO in 2007 – into a multi million-euro business without the aid of any loans or investors. That means that, 11 years later, I’m still the 100% owner of my company.

Why did you decide to step down from APO, and what’s next for you and the company?

Being able to create a company does not necessarily mean that you are the right person to develop it and allow it to reach its full potential.

I built a race car. I did it on my own and I’m very proud that the car can reach 300 km per hour. But just because I built it doesn’t mean I’m the best driver to take it to 300 km per hour. That requires another set of skills.

Often, by sticking to the helm, the founder of a company can become the main obstacle to its development.

I’m not that person.

APO Group has huge potential. As we’ve seen, the situation in Africa is such that, in many ways, we are the right company at the right time with the right services on the right market. Our performance in the last three years is proof of that – and if you factor in the projected growth of the continent as a whole, the figures will back you up.

I always knew that someday I would have to hand the reins to a “professional CEO” so he or she could make sure the company realises its potential.

The new CEO I have appointed, Lionel Reina, has a fantastic track record in helping companies scale up quickly and break new ground. Lionel is the former Vice President and General Manager for Eastern Europe, the Middle East and Africa at Orange Business Services, the B2B division of French telecoms giant Orange. He has also served as Middle East Director in the Gulf region for Accenture.

Lionel and I met in Africa and we have known each other for years. I couldn’t have dreamed of a better CEO.

I am now officially the chairman of the company and I remain its 100% owner. My focus will be on delivering high-level counsel for APO Group clients and continuing to contribute to the growth of the continent by developing my own investment fund dedicated to Africa. I will also continue to oversee our relationship with the World Rugby’s African association, Rugby Africa, of whom we are the main Official Sponsor. Today, Rugby is the fast-growing sport in Africa. In 2002, only six African countries were playing the game, and now the Rugby Africa boasts 38 countries! APO Group is also helping its clients to enjoy the unique sponsorship opportunities offered by World Rugby’s African association, Rugby Africa.

Any advice for budding, young African entrepreneurs?

It would be a very long list! And it would really depend on which stage of the company’s development you are in. But if there are two things common to most self-made entrepreneurs, it’s hard work and resilience. If it was easy, everybody would have already done it. If it was easy, it wouldn’t have any value. You need be ready to work 12 hours a day – and don’t make any plans for the weekend, because you’ll be working then too.

As for everything else I’ve learned? That would take an entire book to cover.


Fss2020 to make Nigeria the fastest growing financial system in the world-Suleyman

In 2007, the Central Bank of Nigeria (CBN) launched the Financial System Strategy (FSS2020) aimed at calibrating the financial system as a means of ensuring economic growth and development in order to grow the Nigerian economy to be one of the 20 largest economies in the world by 2020. In this interview, the Executive Director of FSS2020, M.D Suleyman, speaks on the impact of the strategy and what to expect in the coming year.

What is FSS2020 about?

The FSS2020 is an initiative of the CBN and other regulatory institutions in the financial system that was launched in 2008, but its implementation was in 2009. The initiative came about since 2006 as a result of the prediction of Goldman Sac that come 2025 Nigeria is going to be among the net 11 developing nations in the world. So when that happened, the CBN governor felt that we needed to start a project to actualise that prediction to make Nigeria one of the top 20 economies, not by 2025, but by 2020. So that target was set in 2006.

The regulatory institutions in the financial system came together with some critical stakeholder ministries to craft the strategy document, and the vision of that strategy is to make Nigeria the safest and fastest growing financial system in the world by 2020, supporting the real sector, but after a 2013 review, the vision changed to becoming the safest and most diversified financial system among emerging nations supporting the real sector for economic development.

The strategy is to focus on the emerging economies in the Africa and Nigeria itself. So, basically that is what the strategy is about.

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What is the focus of the strategy?

The strategy is anchored on three pillars: to deepen the Nigerian domestic financial market, to integrate the Nigerian financial market and the international market, and then the third pillar is to support real sector in promoting economic growth.

That was how we came about bringing in the Micro, Small and Medium Scale Enterprises (MSMEs) sub-sector into the strategy document so as to support the real sector in our bid to develop and deepen our economy. That’s how the strategy was crafted.

What sectors are you looking at in the implementation?

We are looking at five sectors in the implementation of the strategy: insurance, pension, mortgage, financial market (comprising of the money and capital market) and the MSME sub-sector.

These are the constituents of the strategy document. We are as well working in collaboration with the regulatory agencies and market players in all these sectors to make it happen.

What is the impact of the financial system strategy adopted in the last 10 years?

So far so good, though 2020 is just around the corner, but we have been able to achieve some milestones in some of the sectors, particularly the money market, because our focus in the money market is enhancing the payment system in the country; that’s how we came about innovations in the payment system space.

Today the payment system space in Nigeria is among one of the best in the world to the extent that other countries are coming to learn from us to see how we got to where we are today. You know in pre-2006 we couldn’t transact any business in any branch other than the branch which your account is, but today, even in the comfort of your bedroom, you can do your transactions: bank transfers, pay your bills and you can do so much using other channels of financial services to transact your business. And that I think is a great deal and I will say we have done much in that respect.

And for the capital market, gone are the days when you wait for your dividend warrants or share certificates from entities that you subscribe for their shares. Now with the coming up of the CSCS shares are registered online and people can manage and monitor their shares and their dividends can be paid into their accounts. All these came about from the innovations of the FSS2020 strategy.

Financial inclusion is part of the strategy we are trying to achieve. Just recently, last year December, the Governor of CBN, who is the chairman of the programme’s supervisory board of FSS2020, at an executive retreat in Lagos, gave a marching order that we needed to upscale the inclusiveness of Nigerians into the financial system to 80 per cent by 2020. So we are working with the national financial inclusion strategy secretariat, and to achieve that and to do that in the pension sector to have this micro pension that everybody is talking about, we have come up with an initiative that SMEs that want to patronise government for contracts must come up with certificate of compliance in participating in the pension scheme, at least to have three staff in their companies registered in the pension scheme. And that is working. The next level we want to get to on that is to encourage the banking sector, particularly the CBN, to make it a condition that any SME that wants to access intervention funds from the developmental funds in the CBN, either agric or the SME funds, that the provision of the certificate of compliance should be part of the requirement. That will go further in deepening the involvement of the SMEs in the pension funds thereby achieving the micro pension scheme that we are bringing in. Likewise in the insurance industry, more products are coming in. Before now,

people had this apathy about going into the insurance industry because of either cultural or religious beliefs. But now we are beginning to introduce into the space the non-interest insurance services like the Takaful so that will take care of the large segment of the society that has not been captured in the micro insurance industry.

For the mortgage, a lot of initiatives are coming up on board for the provision of affordable housing at a very reasonable costs. Though we are faced with the challenge of funding, but we are making effort to see how we can pluck from the low hanging fruits of the direct foreign investors who are interested in the housing industry.

So far so good we are talking to about two groups now: the African-Diaspora Chamber of Commerce who are coming in with billions of dollars for that purpose, we are still discussing with them on that in collaboration with the Federal Mortgage Bank, the Nigerian Mortgage Refinancing Company and the Mortgage Bankers Association.

By and large, we have made some good strides in the FSS2020 strategy. There is still work to be done and we are leaving no stone unturned to see to the achievement of our objectives.

With just one year remaining, is there going to be an extension of the strategy?

Usually, no strategy is cast in stone, the beauty is that part of the requirement of the strategy is that you apply some agility and flexibility to it. Where you find out that you are experiencing some issues or challenges; by that agility you can make it suit your purpose, so for that reason, if we are unable to meet our target by 2020; of course we are already embarking on a review of where we were before the strategy and where we are after the implementation of the strategy has commenced, and I think that document will be a referral document for research and records.

By 2020 we intend to do a final review of the progress of the strategy and then we will be able to decide whether we have been able to achieve our objectives or not and whether there will be need for us to extend that date or not.

What should Nigerians expect from FSS2020 in the coming months?

If what we are working on now works out and we get the support of our principals, I think Nigerians should begin to see a complete revolution in the areas of mortgage market development in the country and a lot of infrastructure; both financial and physical infrastructure, coming to the country.

We have succeeded in getting PenCom to agree to the increase of the level of pension funds that would be deployed to infrastructural development. And once that happens, Nigerians would see a lot of activities going on in the issuance of corporate bonds, green bonds, infrastructural development, in the spirit of sustainable banking principles to meet all these climate change challenges where we will start to encourage healthy environment.

So pretty soon we are going to have affordable housing, long-term housing projects and mortgage financial transactions in the country.

We have an initiative of coming up with the Green Smart City development, we have opened conversation on that and all that is in the spirit of climate change. The Green Smart City is going to come on stream, we have written to the Minister of the FCT, we have written to some of the states, because we want to have the pilot run in five states: FCT, Lagos, Kaduna, Enugu and Rivers.

The city is all about climate change, low emission, encourage green environment and reduce environmental pollution. The city will use alternative sources of energy and no generators, and environment where we can have automated surveillance security system for the city.

Ogunniran calls on government to create platform for affordable housing

HAKEEM OGUNNIRAN is the immediate past Managing Director, UACN Property Development Company (UPDC). He is also the founder/Chief Executive Officer, Eximia Realty Company Limited. In this interview that was published by Guardian,he spoke on the challenges of affordability and social housing in Nigeria as well as the real estate’s potential in boosting the economy.

You are a lawyer but cut your fame in real estate sector, what drives the passion?
People don’t know that I used to teach real estate law in the university. I have a unique understanding of real estate because my foray into academics gave me significant insight into the underpinnings and workings of real estate transactions. I was working in UAC and had the opportunity of moving from what I was doing to UPDC, I grabbed the opportunity with both arms and that gave me a unique platform to manifest what hitherto has been innate in me.

As a former Chief Executive Officer of UACN Property Development Company, the company over the years added rich property investments/portfolios. How were you able to achieve the feat? What are the critical loopholes you noticed in the Nigerian real estate transactions? 
I worked in UAC for 23 years and had varied experiences from legal to sales and marketing, running two significant businesses. UAC is a great company; it gave me opportunity and training. I spent eight years in UPDC and in those years, I had a rare privileges of working at the centre of real estate transactions in Nigeria executing projects, raising funds, selling to customers, creating platforms in the real estate industry.

The sector is challenged; there are significant problems that we grapple with in the industry. People always talk about funding, but for me, funding is not the main problem in the sector. The major problem is the availability and affordability of good titled land. We have instances, where you acquired title to a land and several years after, somebody else comes and then it becomes a problem. For me, uncertainty of title is a major problem.

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Another is the issue of funding at both construction and retail end because of the structure of the economy. At the retail end, there are a little above 20,000 mortgages in Nigeria, the mortgages are unaffordable, the rate is too high, the tenures are too short. Currently, mortgages go as high as 20 or 25per cent. What that means is that in four years, you would have paid for the price of the house twice and it doesn’t make any sense. Infrastructure is also a key problem because a lot of developers today, are like local government. They provide power, road, sewage and water treatment yet; you would pay other charges like neighbourhood charge, land use charges and others.
These issues are serious problems, which affects the growth of the sector. I always take a value chain approach to real estate, look at the critical players and issues that matter to them. The environment is such a risk factor against real estate and it is very difficult.

Talking about planning approval, I was in a conference recently where one of the speakers narrated how he had to wait for 36 months before getting approval for a project, which they completed, in 14months. There are other challenges of inflation, high interest rate, challenges at the ports and all the usual problems of businesses in the country because you can’t isolate real estate from the economy.About 60 million Nigerians are said to be living in indecent homes coupled with wide housing gap. The country hasn’t been able to meet the need of the people too, how can we solve the problem?
Solving the housing deficit will require a whole lot of multi-level approaches. I don’t believe that government should build homes. I struggled to understand why government should be building houses; it should create the right environment for the private sector, to drive construction and delivery of homes with special assistance. I know that in the past, government has said that some people abuse the process but I think that government should partner with the right set of people.

I also call to questions the pre-qualification criteria that government had used before they put money in the hands of those people. Government needs to create the platform for delivery of affordable and social housing. Government should put in place deliberate programmes for funding the affordability gap for those who acquire houses and provide social housing for those who are unable to build homes. That requires a deliberate process and wholistic approach through policies that would bring together all the stakeholders.

Despite huge demand, driver for real estate investment in the country especially in cities with increasing populations, there has been lull in the sector, particularly this year. What is responsible for current situation?
The truth is, real estate typically mirrors the economy. Whatever happens to the economy also happen to the real estate sector. We are just coming out of recession, real estate suffered because when an economy enters recession, real estate is the first to suffer and the last to come out. In a recessionary period, your asset recovery circle is a little bit longer and that puts a lot of pressure on you as a participant in that sector. The reality of the matter is, the economy itself is suffering from declining demand, purchasing power, so much uncertainty around.

People don’t make real estate decision during uncertainty because that could be their largest real investment they would make in their life. They would want to make such decision when the atmosphere is a bit certain. Today, the lull is not only in the real estate sector, it is in food and beverages, and permeates the entire economy. The sector feel the pinch a lot more because all the enablers that are needed to drive the real estate segment are largely absent in the country.

Enablers such as financing options, incentives, low mortgages to drive the sector are lacking. Fortunately, we have seen interventions for other sectors like bank, textile but government has not provided any intervention for real estate, so the lull persists. I am not an advocate for handouts, but when you have a segment, which has come under such a heavy burden, the government could do well by putting in place programmes that would help to re-catalyse the sector.

You recently launched a real estate company, what was the motivation for the initiative and how would it impact the real estate industry?
I have worked for 33 years in all my life, worked for people, government and other organisations. So after I retired from UAC, I was convinced that I could do a lot more than I have ever done in the area of real estate. I also understood that we needed to do things differently and change the narratives.

With a lot of experiences, gathered over the years, I have to put everything together. I also consulted with people, potential investors, partners, funders of our initiative and that is how we launched Eximia, which is from a Latin word meaning extraordinary, outstanding and unusual. That speaks to what we set out to do in the market. We want to address specific problem that we have seen in the market. We understood that we needed to mobilise capital in a different way. The first thing we did was to launch a real estate cooperative last September to create an avenue for people to have access to long-term targets.

The idea behind the cooperative is to create an avenue for people to have medium to long-term real estate ownership target and to start saving towards it, which will helps us to mobilise capital in a very unique way. We taking a look at a model in Kenya called SACCOS, a cooperative, which account for over 35per cent of national savings and over 90per cent of housing finance.

Venturing into the sector now, are you not bothered about the downturns in the real estate market?
We are bothered but you just have to understand the market and the customers. I have spent a better part of the past five months to really work on our designs and engineer efficient service delivery to customers. We are coming to the market with our studio as low as N18million, one bedroom; N25/N27million and none of our products is prized above N30million for now.

Beyond that, we are also creating different mechanisms because a lot of people in that category have different cash flow and no bulk fund. We have to create a finance mechanism that assists them to take over their units after a particular period like flexible payment plans and others.

What do you think is the best approach to addressing the need for social housing in the country?
We need to do so many things if we must deliver social housing. We need to start through strong reorientation because what is called social housing or affordable housing is not social housing. Social housing starts with the designs. Social housing is supposed to serve and meet the needs of certain category of people so that they can migrate to higher level of housing in the future.

After China, the country that has done a lot of affordable housing, is South Africa. In South Africa, the country started from 40square metres houses and they move up to 80square metres gradually. But here, everybody wants to live in two bedroom flats with all rooms’ ensuite and boys-quarters. The first thing is that we need to revisit our understanding of social housing and once we have done that, come out with efficient designs properly done by value engineers. Then we have to talk about the construction methodology. I always say that we are still building houses but we have to start to industrialise the process of delivery houses. This already happening in some parts of the country, by so doing, we would be able to turn out large volume of houses within a short period.

By industrialising, it means we have to mechanise the process either through prefabrication and other processes which are cheaper, faster and more efficient. It is only happening in the United States of America, but it already happening in Maiduguri where you have a young engineer who has designed a particular type of block, which is being used on large scale. Once we have done that, government has to put the right incentives in place, to help us deliver the houses at affordable price.

High cost of housing and building construction has brought a substantial increase in disinvestment in the construction industry as well as added investment risks. What could be done?
It is not just housing sector that suffers from high cost in Nigeria, it permeates several sectors of the economy. Housing suffers an added problem because the main input, which is land, the cost of land is high. I think pricing is very artificial. In Nigeria, land cost as part of development could be as high as 20/25per cent.

Ideally, the cost of land shouldn’t be more than 10per cent. The infrastructure cost is also there. I did a project where the overall infrastructure cost was about 10/15 per cent, you also have the high cost of perfecting your title, permitting and approvals and all the materials, which you use are imported beyond land and cement, every other things are imported. So you suffer from all importation problems, including exchange rate volatility, which add to the total cost of construction.

By the time you do that, it is difficult to deliver prices at a cheaper rate. However, a lot of reforms are happening in Nigeria which we must commend the government to some extent. For example, at the national level under the housing finance programme, recently the Family Home Funds was established. I believed that the scheme would be a critical driver for solving housing deficits.

There is also NMRC which has recently been reorganised to drive mortgage refinancing and in mortages new underwriting standards are taking place, standard foreclosure laws and model mortgage foreclosure law has also been put into place. Recently, the mortgage warehouse was also launched and I believe that these initiatives would help to solve some of these problems and create a springboard for bridging the housing deficits.

As a high-profile player in the real estate business, which innovations/technology do you think Nigeria needs to adopt in improving the industry?
This is the era of prop-tech, where a lot of things are happening. Technology is driving everything, in our company for instance, one of our core goal is techno-savviness because we understand that would drive our business at both construction and the management end of the market. We need to allow technology to drive business, deplore technology that would provide standardisation, efficiency, and delivery.

What are your projections for the industry in 2019?
This is election years and we are going to lose about five to six months into the New Year. Another Central Bank of Nigeria (CBN) Governor would emerge. We are going to wait and see the policy thrust of the new government and CBN. A lot of things are still hazy but some things are constant. Housing deficits are still there and people will need houses, shortage of infrastructure is still there and there is the need for investment in those areas.


“Africa should no longer be seen as a continent asking for aid”- Mustapha Njie

Mustapha Njie is the Chairman/CEO, of Taf Holding Co. Ltd and the owner of TAF Africa Global.  Started this company solely from nothing to a multi million USD company. Recognized as Gambian businessman of the year (1993, 2004 and 2006 – 3 times). Gambian Man of the year (2006). 1998 European Counsel for Global Business – For quality and Excellence. 2004 Best SMME in construction in Africa. 2010 ECOWAS honourable businessman. With 28 years experience in running his own business in the housing and real estate industry in Africa, he is passionate in expanding his business in sub Sahara African countries, while sharing his experience with other professionals in the field. In an interview with the Forbes Njie shares his experience in the housing and real estate industry and his plans towards investing in the low income  housing.

As it is the first time that you are interviewed for Forbes Global Magazine, would you please give our readers a brief historical background of your company as well as an overview of your activities?

I started my business in 1990. We are generally involved in construction and construction related businesses. The company was initially involved only in construction, but over time we have diversified to include selling of building materials, tourism development, building hotels, executive apartments and housing development, which is the latest of our ventures. So under our holding we basically have construction, building material supplies, estate development and tourism development.

Our readers, which are mainly decision makers, are always curious to know how companies are doing. Would you please provide us with some financial figures like turn over, net profit, number of employees?

Obviously in construction, employment is not always the same as it depends on the work that one has at a given point. On average, however, under the holding company we employ about 500 people and our turnover ranges from 5 to 8 million USD.

An operation “House the Nation” has been launched some time ago in co-operation with Shelter Afrique. They were expected to finance the project. Would you please present that project to us and provide us with the latest developments regarding this agreement.

“Operation House the Nation” started early this year. We have always been interested in housing development and have been doing conventional housing since the inception of the company. People come to us to build their houses. Since housing projects in The Gambia are done by government parastatals, we are the pioneers in housing development by the private sector.

Since 1992, we have been interested and have been testing the market, but never on a large scale. This year, on the contrary, we have started on a large scale. We applied to Shelter Afrique for a co-financing loan, which was approved within a month of submitting the document, and subsequently applied for land from the government. A piece of land had been granted to us in Kanifing but unfortunately, this has resulted in some controversy which is currently being sorted out.

The project caters for all levels of society. It is divided into four categories: one for the very high-income group; the second one is for the moderately high-income group, the third for middle and the fourth for the low-income group. We are looking at low-income housing where it is planned to utilize locally available materials with appropriate technology to produce, among other things, stabilized laterite bricks for the construction of core houses.

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TAF Estate Developers recently made a vigorous attempt in setting the pace for private sector involvement in housing infrastructure. This effort has met some difficulties. How frustrated is TAF’s commitment to play in this field?

We are not frustrated at all, in fact, this energizes us. If there are problems, it just helps us better to succeed as entrepreneurs. Yes, there is a temporary stop to the project, but we are in renegotiations with the government and have almost agreed on alternative sites. We are hence going to proceed with the project in one way or another.

In order for a country to develop, it needs the collaboration between public and private sector. Taking into consideration the recent events concerning the Sinchu-Yahi project. How do you think the collaboration between those two sectors could be implemented here in the Gambia?

The public – private sector relationship should be very cordial and complementary. We all have different and important roles to play in our development, which is why our relationship must be complementary. There must be positive dialogue in order for all of us to achieve our goals towards the sustainable socio-economic development of our country. What is important is to be able to overcome problems, such as these, through dialogue.

Could you explain how aggressive your growth strategy is and what your projects for the next future are?

We are quite aggressive in strategy. We are the biggest indigenous construction company in The Gambia and have developed lots of strategies especially in the field of marketing, where we are quite aggressive. The strategic location of our billboards e.g on the only pedestal bridges in the whole of Gambia, ensures that we are noticed by everybody more so by those travelling to or from Banjul. We ensure that nobody comes into the country without noticing us. The company’s name was chosen because it is short, simple and easy to remember. Even when choosing our colour, the emphasis was that it should be eye catching. Apart from that, we do almanacs every year, which are distributed to every office and place of importance to show and remind people of our existence. We are the pioneers in this and as a company we make sure that we are quite visible, which I don’t think we have missed. We do invest quite a lot in marketing both locally and internationally.

Regarding our strategy on development, our goal is to maintain being the leader in construction nationally. But obviously given the size of the country we have our medium and long term plans for expanding both in the sub region and in the continent.

Are you currently planning on diversifying your activities as far as engineering is concerned in order to target new markets?

No, we will continue to concentrate on housing construction and tourism development, but not in road construction with heavy engineering involved. My analysis on that is if we want to go that big we have to, as a matter of necessity, go beyond our borders, because the investments are quite heavy on capital and equipment for this type of works. For the time being we want to stay within our borders. There are no immediate plans for large engineering type of works.

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To what extent do you engage your company in investing in new technologies? Could you explain what are the main investments you’ve planned to do in the near future?

We are going into low income housing, as I said, and our plan in the next five years is to build about 1000 units, which in The Gambia is a significant project. You should note that we are not only planning on constructing these houses in the Greater Banjul Area, but also in all the growth centres in the country.

This is a new technology that we are getting into. It is compressed laterite bricks and roof tiles, which are stabilized and environmentally friendly. Sand, which is widely used in all construction activities is at the moment quarried from the beach thus creating lots of problems especially with regards to coastal erosion. We therefore don’t want to use any sand and very little cement. This new material is compressed, very strong, and in fact stronger than ordinary sand and cement blocks, and yet still cheaper. The technology which is being imported from Belgium, is very labour intensive, creating thus a lot of employment.

For a company, investment in Human Resources is the key word for success. Would you explain how important it is for TAF?

My dream is actually to build a training / skills centre for young people to encourage them into the field of construction but looking at it from a private sector perspective. Already there are similar institutions run by government and people generally think that it is the government’s responsibility and the private sector simply employs, but we are thinking to invest in training to benefit our company and also as a contribution to society.

As a successful entrepreneur we just don’t have to be seen as making money and being in business but must also be seen to be pumping back some of the profits that are being made into society, creating, in this way, a positive corporate image as well.

In creating this training facility we will be very selective in the enrolment, hiring good people with the right potentials, teaching them construction and eventually employing them directly or indirectly. We have been discussing this issue with various government institutions, but it is a long term project which will need quite a lot of financing and a site for its location. It is when all these pieces have been set into place that building the centre would commence in phases and over a period of time.

TAF is importing its raw material from abroad: wood from Brazil, ceramic from Morocco, and cement from Indonesia even if The Gambia produces some cement: How competitive are the Gambian producers here?

I think we are pretty competitive. As I talk to you now, we are no longer importing cement. We use the local cement and now there are further negotiations being made to see how we can increase our volumes. If you look at market prices now, it is definitely cheaper than the imported cement. People, however, still want to have a choice of buying the imported product rather than the local one. But as you know, even the local product is imported.

Do you think the market could be taxed less?

Yes of course. I mean any tax reduction will boost the market. It is not only Gambia, I think it is a global fact. However, compared to our neighbours, our taxes are lower, but it is clear that we could do better with lower taxes.

Are you working on a joint venture with foreign companies or are you planning on doing so?

We are always looking for new joint ventures, because local finances are very scarce and interest rates are way too high, so we will be looking in every sector that we are in, for joint ventures. We are open to any offers. Whatever we do, we can do better with a partner, and more human, material and financial resources.

Our mid term plans are not to stay a privately owned company, but create global partnerships and joint ventures in order to be enlisted on the open market in the future.

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As a final question, what has been your main achievement since you are Chairman of TAF and what will be your challenge for the next future?

I am probably most proud of my hotel project. It is not only because we own the majority, but also because the hotel is managed entirely by us, up to now. We just hired Gambians to manage it and are very proud about the fact that it is 100% Gambian. Generally in this sector hotels always look for expertise from outside.

What do you think is going to be or has been your greatest challenge?

My greatest challenge is going to be the provision of housing for Gambians. We want to make sure that Gambians are housed. We plan to provide affordable housing or shelter for every Gambian. When I say affordable, I mean very cheap but high quality housing.

Is there anything else you would like to share with our readers?

I would like to talk to you about the new African entrepreneurs.

I just came back from Addis Ababa where we decided to launch the African Enterprise Network, which now has a membership of over 500 from over 31 African countries. That is quite an achievement.

We started in 1993, and are financed and sponsored by OECD, USAID and other donors. Initially we started in West Africa with a membership of 200 from 13 Regional countries.

The success of the West African Enterprise Network, where I served as an executive committee member led to the setting up of the East and South African Networks in 1998. And now in Addis Ababa we have just launched the African Enterprise Network. We are proud to say that our newest member is Noa Samora, the CEO of World Space.

When we talk about the new African Entrepreneurs we are not only speaking about age, but it is more the way we do business. The objective is to engage governments in a dialogue on policy changes for sustainable development and to encourage cross border trade and investment within the continent.

This is something I really believe in. While there is a lot of talk about globalisation, we want to focus more on regionalism and on the African Continent. Unless we can trade with ourselves, there is no use targeting other continents. We want to trade and make sure that the environment exists in order to trade. We should be able to drive from here to Nigeria and get our goods across borders without harassment. I think these are issues that must be addressed, and when they are, as a sub region, we will attract more interest in this part of the world. There are too many obstacles in doing business here. One, our markets are too small as nations, and two, there are listed constraints in doing business. Compared to other continents, if you wanted to drive from Dakar to Lagos, it will take you up to two days in Europe, but here it can take you up to three months. We want to get all these barriers out, making sure customs duties and tariffs are harmonized and so forth. Once this is achieved we will be in a better position to compete globally.

What is your final message to our readers?

The image of Africa is changing. Africa should no longer be seen as a continent asking for aid, where drought, famines and wars are part of daily life. In Africa today we have many success stories and people ready to do business. And we are too.


‘We are driven by our vision to build 1 million homes in the next 20 years’


Taf Nigeria Homes, a subsidiary of Taf Africa Homes, is a ‘foreign’ real estate firm making direct investment in the Nigerian economy. The company entered the Nigerian property market with a bang, developing over one thousand luxury but affordable homes at its RIVTAF Golf Estate in Port Harcourt. In this interview with CHUKA UROKO, the Group Managing Director/CEO, Mustapha Njie, speaks on the Nigerian economy, the recession, the real estate market, the potentials, opportunities and challenges in the market. Among other things, Njie also speaks on the company’s future plans in Nigeria. Excerpts:

Taf Nigeria Homes Limited is, for purposes of definition, a foreign real estate firm making direct investment in Nigerian economy. What was the attraction to Nigeria?

When we came into Nigeria in 2013, Nigeria had an estimated population of about 150 million, a dearth of housing, and an increasing annual population growth rate. These factors made the real estate sector very attractive and the potentials still remain untapped. Our experiences have not been too palatable particularly in view of the economic situation of the country in the last 3 years, but it’s been worth the while as we take pride in delivering a luxury estate with quality homes and seeing our client express satisfaction with our products and services. We are also particularly elated to acknowledge that our project positively impacted the lives of members of the community, individually and collectively.

You have been in the Nigerian real estate market for over five years now and still counting. What story can you tell of Nigeria, its property market and the economy in general?

Prior to being hit by the recession experienced in the country, the real estate sector made certain contribution to the real GDP of Nigeria. In 2015, the real estate sector was reported to have contributed 8.26 percent to the real GDP of Nigeria (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q1 2015). Unfortunately, the contribution of the real estate sector to the real GDP has reduced over the past years due to the recession.

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The National Bureau of Statistics reported that in the third quarter of 2017, the real estate sector contributed 6.79 percent to real GDP, lower than the 7.18 percent reported in the third quarter of 2016 (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q3 2017) and lower than 7.57 percent reported in the third quarter of 2015 (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q3 2015). Although the country is said to have come out of recession, the real estate sector is yet to recover from the impact of the recession.

This is evident in the Nigeria Gross Domestic Product Report, Q1 2018 of the NBS which puts the real GDP growth in the sector in Q1 2018 at -9.40 percent and a contribution of 5.63 percent to real GDP (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q1 2018) which is lower than the 6.32 percent of Q1 2017 and the 6.48 percent of Q1 2016 (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q1 2017).

Nigeria successfully exited a crippling 15-month recession. Our focus in this report is on those real estate firms, which you are one, that are still afloat despite the impact of the recession. Tell us your story in the circumstance.

Without a doubt, the real estate sector attracted investments from individuals, corporates, foreign investors in a large scale prior to the recession that hit the Nigerian economy. It cannot be overemphasised that, just like other forms of constructions, real estate development requires significant capital. Till date, the sector has witnessed limited equity financing, hostile debt financing (particularly in view of harsh lending rates which was reported to have hit 30 percent per annum) and weaker effective demand triggered by inadequate and unfriendly mortgage facilities.

We were not insulated from the situation of the sector as we are a key player in the sector. However, we were resolute to deliver on our promise of delivering affordable luxury estate to our target clientele without compromising the quality and standards which our brand is known for across the continent. To this end, we decided to take certain strategic steps which I hope to discuss in the course of this interview.

A major problem for developers like you during the recession was credit drought and hyperinflation that eroded people’s purchasing power. How did you source funding for your projects?

The poor state of the economy, worsened by the recession, posed significant barriers on the availability of finance for the real estate sector. This is because the few lending institutions that could ordinarily provide construction financing to real estate players or mortgages to encourage demand for real estate products could no longer provide such facilities. The cost of finance (especially debt finance) during the recession was alarming so we decided to deploy other innovative and creative means of generating funds outside debt finance.

For you to have sustained your business till now means you are a resilient company and indeed you must have brought innovation and creativity into your operations. How did you do it?

In a bid to navigate the storms in the sector and continue to provide quality products and services to our growing clientele while we remain profitable, we had to deploy creative strategies. These include introduction of certain value added services to our existing superb customer service experience; redesigning our products to smaller units in order to make them more affordable; introducing new products like serviced plots; evaluating ongoing construction works on defaulting clients’ property and renegotiating sales agreement with a view to handing over such properties “as is”; strategic engagements of marketing agents especially by providing incentives to existing clients who make referrals to us; and ultimately introducing a contractor/vendor/supplier-financing (C/V/S-F) system.

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We are particularly fascinated about the C/V/S-F system which you adopted in the RIVTAF Golf Estate. What is this system all about and how did it work for you in the marketing and sales of that estate?

The C/V/S-F system is a system wherein certain aspects of the development and infrastructure within the RIVTAF Golf Estate were financed by the contractors/vendors/suppliers themselves. So, rather than paying the contractors/vendors/suppliers for the services provided to us, we issue them with some properties for the contract sum and at negotiated prices. The contractors/vendors/suppliers in turn sell off these properties or collateralise the properties to finance the contract. This strategy was not limited to new contracts, it was extended to existing contracts that had been partly paid for as well as to contract that had been fully performed but with outstanding debts to the contractors/vendors/suppliers.

As a result of the C/V/S-F system adopted in the RIVTAF Golf Estate, the estate is nearing completion. Work has progressed significantly on our shopping mall and completion is now in view, liabilities have been reduced thereby freeing up funds for other operations and commitments of the company. The C/V/S-F system allowed our company to continue to create value and deliver on the promises made to our esteemed clients while our contractors/vendors/suppliers remained in business and continued to make profit. It is apposite to also note that this system guaranteed sales of our products. This is in view of the fact that properties given to contractors/vendors/suppliers in place of payment for services rendered are deemed as sales on our accounts as they are deemed to have been paid for by the receiving contractors/vendors/suppliers.

The challenge of the C/V/S-F system was a potential parallel market but this was well managed as the structure of the C/V/S-F system already anticipated this challenge and had ready preventive solutions for such potential challenge. Rather, a viable secondary market was created where contractors/vendors/suppliers became strategic players in the secondary market for our products.

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RIVTAF Golf Estate is a project with which you stamped your signature in the Nigerian real estate market. Any plan to replicate that in any other part of Nigeria? Where and when should we expect that to happen?

Yes, we intend to replicate and do even greater projects in Nigeria. TAF Nigeria Homes Limited and its sister companies across the African continent are driven by our vision to build 1million homes in the next 20 years. Nigeria remains one of the biggest economies for such projects. With an estimated population of over 184 million as at December 2017 (World Bank: The World Bank in Nigeria), a conservative estimate of 17 million units of housing deficit as at 2015, an annual population growth rate of 2.8 percent (National Population Commission and National Bureau of Statistics Estimates), the potentials of the real estate sector remains unimaginable. We are optimistic that the sector would recover from the negative results being reported and start experiencing positive growth. The Nigerian real estate sector can!

We want to believe that it has not been a bed of roses for you operating in Nigeria. What have been your major challenges in this country? Do you have any regrets being where you are?

Every business faces certain challenges and indeed a significant chunk of such challenges emanate from governments and regulators in each sector. We have had our share of this and can only ask that government makes increased efforts at improving the ease of doing business in Nigeria. Another significant challenge is the dearth of infrastructure in the country. The absence of infrastructure such as roads and efficient transport system impacts location and viability of a project. Infrastructure must be given its deserved attention by the government.

What are your projects in terms of growth and expansion in the next four to five years?

We have a couple of projects to deliver in Nigeria but I would not want to put the cart before the horse. We are in advanced level discussions with the governments of some key states in the South-Western and South-South regions of the country and have reached certain Agreements in Principle and signed a Memorandum of Understanding. In due course, these projects would come on stream. It may also interest you to know that we have built a formidable and highly competent team in Nigeria to manage the company’s operations in more than one location as we expand into other states..


“You Can Enjoy Rental Income without Owning a Property”

Founder of Africa’s Property Investment Group, Mr. Chudi Kalu, in this interview with Mary Ekah, speaks about investing in the real estate business as the surest way to building and securing one’s future, providing insights and latest money-making tips in the property market in Africa, among other issues

How would you describe Nigerians attitude towards investment in real estate?

So far we have realised that people fear that the recession in the nation will stop them from investing in property. But that is not the case because a lot of people are already taking advantage of real estate investment because they know that the way to come out of any form of recession is when they enjoy consistent cash flow. So a lot of people are investing in real estate at this particular time.

That is why we have been holding a lot of seminars and workshops lately aimed at opening the minds of investors to how they can change their financial levels for better by investing in real estate, the opportunities that are available to people and how ordinary individuals can take advantage of the investment opportunities available within the real estate sector without having to break the bank. And I think that for real estate industry to grow in Nigeria and for property business in Nigeria to be activated properly, investors should come in; and we cannot always expect foreigners to invest in real estate in Nigeria, we the local people should take advantage of the opportunities around us.

You have had series of conferences and workshops on real estate lately, what is the driving force behind all these?

We at AFPING are trying to give everyone an opportunity to invest in high quality real estate investment. Presently we have projects in Surulere, Yaba, Ijesha amongst other areas in Lagos and elsewhere. We also have some UK projects that we are pursuing at the moment. Anybody can take advantage of these opportunities and you don’t necessarily have to live in the UK to invest in the UK. To this end, we have been doing a lot of coaching on real estate investment and how people can take advantage of the rental market. We are particularly focused on educating people on how they can enjoy rental income without owing a property of your own.

People keep wondering if this is possible. It is actually very possible if you understand how it works. Now because of the challenge of buying property in certain areas, a lot of people have lost money because of “Omo onile” and they bought property expecting that some of those property will appreciate but after 10 years, they probably do not know where the location of that property is and at the end they would realise that they must have been duped. So it is better to play within a particular market where you can easily take advantage of. Now how do you participate in the Lagos market for example without getting your hands burned? At least we can see the population.

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When I see the Lagos traffic, I get so excited and then some people wonder why I am so. I feel so because as long as there are people within town, rent will continue to go up. And what drives rental income for landlords is the number of people that lives in a particular area. And how do I as an individual participate in that game without actually owning a house is what we have been able to figure out at these seminars and workshops. When you go round that, you see a lot of property that are empty and also property that the landlords do not have the required funds to put them in good shapes because they probably do not have a regular income and yet the property is within a good location.

All one needs to do is to invest in such property and renovate for better rental charges while both the landlord and investor share the profits. So, as an investor, you do not have to buy the property to share in the profits, All you need to do is just to invest some money for its renovation and then in return get huge rental income. That is what we coach people on during the seminars and workshops that we have been holding lately and you don’t have to be an expert in the industry before you can earn rental income but all you need is to have a little fund on ground.

According to statistics, we have 17 million housing deficit in Nigeria and if every household pays a hundred thousand naira from the 17 million housing deficit that we have in this country that will be more than 17 billion naira annually. So I would say that the deficit we are facing in the housing sector is an opportunity and not a curse.

And it is those people who see the opportunity within that market that would take advantage of it. If they say we have about 17 million housing deficit, what it simply means is that you have 17 million families who are ready to pay only for kind of houses they can afford, so that means that if anybody has the houses that fit their needs, they would be willing to pay. So the deficit is an opportunity for only those that see it as a business opportunity and can then thrive on it.

So it is a missed opportunity for me if I do not invest in such market. So real estate is a big market not just for the developers but also for people who can see opportunity in that area and grab it and this can only be achieved when I use my money to do renovations on some of these properties on ground.

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Many people have properties but they are still poor merely because they are not thinking creatively nor taking advantage of the immense problem of housing deficit and then convert that problem to their own advantage; and that is what our seminars and workshops are all about. We are trying to teach people how they can take advantage of the housing problem in Nigeria. Every problem is clothed with opportunity and how you take advantage of that opportunity is what this is all about.

How would the common man who could hardly save the miniature income earn benefit from this?

There is a scheme we have been doing for over four years now, where by certain people can put funds together to own high quality real estate investments. For example, there is a particular project somewhere in Ikeja that requires about N22 million. Now, if I come together with like 10 other people and together we raise N22 million, we all can buy and renovate that particular property and start enjoying cash flow from it. It simply means that 11 of us will share the profit based on the returns we get per year. That is what we are currently offering people right now, taking it to the market place, so that people can take advantage. We have already people buying into the idea and investing in real estate.

This also means that if I want to invest in a property in Lekki, I don’t need to have all the money for the property to invest in it, but it simply gives me an opportunity to invest in high quality real estate investment that may take me so many years of savings to be able to invest. So, we don’t just want to make opportunity for only those who can afford to buy plots of lands to make money, we also want those who have little means to also be able to invest in properties and make money. Why is it that it is easier for plumbers to own houses while a banker remains a tenant for a very long time? This is so because the plumber is thinking in terms of cash flow while the banker is thinking in terms of building and owning and so he waits for so long till he is able to save a huge amount to buy or build a house.

This is information that people in this sector may hardly want to give out so freely. So why and how are you doing this?

I have been using every platform available to me. I have been using the social media a lot to create awareness and I have been crazy about it and I know a lot of people that have taken this raw information and duplicate it for their own benefits and presently are having numerous properties around town.

This is to tell you that this actually works. It is better we cover this nation with success than preventing people from being successful because a lot of people have success but hide the secret of their success from others. The real estate market is too wide for me to hide anything. We have over 17 million people having housing problems in Nigeria; even I alone cannot serve half a million people. The market is too wide so there is no need for competition.

We hold seminars regularly on this. We just concluded one last week called the Rental Income Plan. It is all about helping people to understand how they can do these things on their own. People can be part of this by registering on our website, www.afping.com. We are thinking of holding these conferences at least once in two months, where we gather people in a class to learn. They don’t have to be real estate experts but those who are ready to take the opportunity in the real estate sector.

Husband and wives can also take advantage of this. We also do one-on-one training, leading people by their hand and helping them to explore the real estate market. And if someone says he doesn’t have the time because he has a regular job, then he/she can invest with us and grow with us. And investing in real estate is predictable, tangible and indestructible. That is why I am inviting everybody to do it and you don’t necessarily have to invest with me, you can do it on your own. I started doing this when I didn’t even have full information about the sector but for the fact that I had opportunities. So those whose eyes are opened to opportunities can take advantage of the real estate market.

How do you guarantee security for such investments and is the training free of charge?

Some amount of money is attached to the trainings because we bring in experts to coach these people. And the training one gets involved in also determines the amount one pays. When it is a class, that is a group of people, we give discounts. So the fee ranges from 50,000-750,000 naira depending on which class you want to attend. We also do executive class whereby after the class, you can pick a particular property and we would guide you by the hand, that means that we would follow you to where the property is, secure the property, negotiate the deal with the property owner and then show you by example how we do it.

And talking about security, we have, in the last seven years, been privileged to have sold more than 2,000 plots of lands; so what we do is that the same way we secure people’s property is also the same way we secure people’s investments. So you are not investing into any real estate project that is not insured. We are working with several insurance companies to ensure that people’s investments are secured and that they do not lose their investments in case of negligence on the part of the developers. So that is one of the ways we are guarding against people experiencing loss in their investments.

This Day

‘We’ve Plans For Valuable, Affordable Housing’

Alhaji Umar Abdullahi is the Managing Director of Brains and Hammers Limited, an Abuja-based company that won the Nigeria Customer Service Award for customer service excellence in real estate during the customer service week. In this interview with Senator Iroegbu, he speaks on plans for more affordable housing for Nigerians…

Your company recently won an award for excellence in customer service. What earned you the award?

Brains and Hammers is actually the first company that started a dedicated customer service department in real estate in Abuja and it is based on that the Nigeria Customer Service Award found us worthy of the award. We were nominated alongside other real estate companies and we emerged winner. I think it is a well deserved award considering the fact that we have dedicated enormous resources to develop the customer service department. Every of our customers has an account officer attached to them and is responsible for managing the project, from the foundation stage to completion of the project, after which the facility manager takes over.

I think they came and did their assessment and what they saw based on how we treat our customers and management of the whole relationship bagged us the award. Quality is our watchword here and in terms of selecting our staff, we make sure we hire skilled professionals and foremen. We don’t compromise on standard of materials and skills we use in our projects. We also train our staff locally and internationally, to be the best, both technical and supporting staff. Every year, we send our engineering and project management staff abroad for training, just to make sure that they get the highest skill available.

As the saying goes, ‘reward for hard work is more hard work’, what new projects are you working on?

We started operation in January 2011 and so far, we have executed three projects, Apo 1, Apo 2 and Life Camp. By next year, we should be rounding off all these projects. So far, we’ve built over 600 houses and our plan now is to build 750 houses. We’ve already acquired two hectares of land in the heart of Gwarinpa estate for about 87 units of building. We are also about to acquire another site for our Apo 3 project for about 137 housing units and then, we are in the process of signing an MoU with the African University of Science and Technology (AUST) for 15.5 hectares of land and we plan to build about 500 units. In total, we are talking about 750 houses, that’s our target and we’ve achieved over 600 in five years.

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Unlike, some private entities, corporate social responsibility appears to be an integral part of your company’s business. What informed this?

We believe in adding value wherever we go, we impact any community where we find ourselves positively. Take this Apo site for instance, when we moved in here in 2010, it was all bush but since we moved in, we’ve constructed asphalt access road of 1.7 kilometres, drainages, culverts and street lights and these have impacted on the community by adding value to properties that were already existing and cost of other lands around here as well. Though it is the responsibility of government to fix the road for instance, we decided that we should do it to make them happy.

Affordable housing is a major challenge in the country. What provision do you have for low and middle income earners, considering that they are the worst hit by the gaping housing deficit in the country?

We have plans for affordable housing. We are presently about to seal a deal for acquisition of a 25 hectare land in Abuja where we will have bungalows and one-storey houses that will be in the range of N10 to N15 million.

How affordable would you say your projects are generally?

Pricing depends on location. The price of a property in Apo for instance would be different from the price of one inside Gwarinpa or Life Camp. The price of all property we sold four years ago for instance, have appreciated by about 80 to 100 per cent, so, it is also an avenue for those looking to invest in property because the return on investment is very encouraging. We always ensure that our properties are reasonably priced, to encourage people to buy. Already, some cooperative organisations and corporate bodies are approaching us for construction of their staff housing estates and we are in the process of completing one of such projects in Life Camp.

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Importation of construction materials is still very prevalent in the country. Is your company considering local production in the long term?

Our primary business now is construction; but what we are planning to do is to make some of our existing departments full-fledged subsidiaries.

In what way will your new projects be an improvement on previous models?

Every new project we do is usually an improvement on the last one, particularly in areas such as size of buildings, space between building, and improvement on the design. We improve based on feedback we get from our customers. In our latest project, we want to ensure that there is total improvement from the design, construction, facilities etc, to satisfy our customers. All our estates meet the standard of a mini city in a city, where we have facilities such as recreation parks, markets, water, security, hospitals, club house, sports arena, etc, for the comfort of residents.

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