HOW NIGERIA’S LEADING CEMENT MANUFACTURER BECAME THE RICHEST BLACKMAN IN THE WORLD

With an estimated net worth of $10.3 billion, according to Bloomberg, the Dangote Group founder is the richest man in Africa. According to Forbes, he’s also the richest black person in the world richest black person in the world.Most of the entrepreneur’s wealth derives from his 85.2 percent majority stake in Dangote Cement, which is the largest cement producer  in sub-Saharan Africa.

First launched in 1981, the Dangote Group now owns and operates more than 18 subsidiaries across a range of industries, including Dangote Cement, Dangote Flour and Dangote Sugar.

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The 61-year-old billionaire credits much of his success to his maternal grandfather, who instilled a business mindset into Dangote at a young age. At just eight years old, Dangote would buy sweets with his allowance, which he’d give people to sell for a profit.

“When you are raised by an entrepreneurial parent or grandparent you pick that aspiration,” he told Forbes in 2015. “It makes you be much more aggressive — to think anything is possible.”

Dangote’s entrepreneurial interests followed him into adulthood. In 1977, he graduated with a business degree from Egypt’s Al-Azhar University. When he returned to Nigeria, Dangote moved to Lagos, one of Africa’s wealthiest cities and the country’s largest financial center.

Using a $500,000 loan from his uncle, Dangote began trading in commodities such as bagged cement and agricultural goods like rice and sugar. These business ventures became so successful that he was able to repay his uncle within three months of starting the operation.

In 1999, Dangote shifted to manufacturing, building sugar refineries and a flour mill.When Dangote Sugar first debuted on the Nigerian Stock Exchange in 2010, sales had quadrupled to $450 million, according to Forbes,making it the largest sugar refinery in Africa and by some estimates, the second largest in the world. Similarly, Dangote Flour tripled revenue to $270 million.

Dangote describes his professional journey as “exciting,” but notes that he’s also encountered obstacles along the way. Overcoming these challenges, he told Forbes Africa,, required big thinking and an innovative approach. “You have to dream big to be able to be big and that’s what we’re doing,” said Dangote, who’s now building an oil refinery that’s projected to cost around $14 billion.

For his part, Dangote says he’s driven by the impact he can have on humanity. In fact,he’s also one of Africa’s top philanthropists. “You’d like to be remembered for things that you’ve actually done,” he told Forbes. “We Africans are the only ones that can make Africa great.”

Source:cnbc

 

Challenges of regulating tenancy in Nigeria

Rent control is a residual matter under the 1999 constitution. As a result, most of the states in Nigeria have their individual rent control laws. The abuse by landlords in unlawfully evicting their tenants necessitated the Rent Control and Recovery of Residential Premises law, to seek to protect all tenancies to which this law applies. It is worthy of note that the protection afforded tenancies by this law is not intended to deprive a landlord of the fruits of his/her investment in real estate.

Rather the protection only requires that a tenant should only loose his tenancy after due recovery procedure and process are complied with by the landlord.Though rent control law exists, it has largely remained a dormant most tenants are left to suffer in the hands of their landlords who in the absence of any control, exploit the situation with arbitrary increase in the monthly or annual rent on their property.

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Under Section 37 of the Lagos State Tenancy law 2011, a tenant can apply to court for a declaration that the increase in rent is unreasonable and the court has power to determine whether or not the same is reasonable, taking due cognizance of the rent payable in similar apartments in the locality. If the court is satisfied that the increase is unreasonable, it can change it to a specific amount.

Please note that under this law, if an action is pending in court challenging the reasonability of an increase in rent, it is unlawful for the landlord to eject the tenant pending the determination of the action. But how many people will take the time to go to court and test the law? Your guess is as good as mine.


Even though this law exists, it can be likened to a theory on paper because the reality is that the law respects our freedom to enter into contract agreements and will usually not intervene in a bad bargain in favour of the landlord. Who is a landlord? In the feudal system, a lord so called, would own a land and his tenants became his vassals. The feudal lord had dominion over the land and the produce together with the vassals living on that land. The vassals were then required to swear to an oath of allegiance to the lord, as if a monarch. The landlord could eject his tenant as and whenever he wishes, he could change and alter the rent at will; and could impose any terms on the tenant.

The purpose of rent control is to ensure that a city has a certain amount of affordable housing for lower and middle class residents. In fact, the primary advantage of rent control occurs for tenants. Besides paying an affordable rent, they can predict what rent will cost in future and budget accordingly without the fear of a sudden increase that may make living in an apartment unaffordable. The rent control system creates artificial scarcity by encouraging tenants to remain in their apartment it also creates incentive for illegal rental practices such as unauthorized subleases that tenants use to make a profit by renting their apartments to new tenants for more than they already paid the landlord under rent control.

The effort of the National Assembly and State Assemblies to implement the rent control laws has faced criticisms because, the increase in Nigeria’s population in the urban areas has led to increases in the demand for affordable housing, which is far-fetched. Government should intensify efforts at providing affordable accommodation. It is only though this means that government will break the monopoly of landlords.

The rent control laws though good, what about the regulatory aspect of it? When the law clamps down on the landlords, what about the cement dealers, building materials merchants? The reduction of the cost of building materials will ameliorate the problems encountered by landlords, because some landlords take loans from banks. It stands to reason that the multiplier effects are always on the tenants who are the end users of the building.

Source:The Tide News

Why CEOs of Government Owned Housing Finance Institutions Must Work Together

A house is one of the most important thing in human life. It provides shelter, pleasure and security to a person in modern life. With the increasing large population year by year, the house demand is also increasing rapidly in Nigeria.

Different figures have been reeled out to estimate the housing deficit in Nigeria, whatever the real figure might be, a large number is accounted for by the economically weaker sections, for whom it is difficult to gather huge sums of amount at once to acquire a house.

Here comes the role of housing financial institutions. Presently, the government owned financial institutions involved in housing finance in Nigeria are the Federal Mortgage Bank of Nigeria (FMBN), Family Homes Funds, and the National Mortgage Refinance Company (NMRC).

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These institutions have different roles to play in ensuring the provision of affordable housing to Nigerians. Though they have different mandates in the delivery of affordable housing, it is imperative that the heads’ of these institutions must see themselves as partners in progress rather than competitors in the housing finance sector.

The FMBN, NMRC and Family Homes Funds, all work on different aspects of providing affordable housing for Nigerians. Primarily, FMBN is a public sector institution focused on the role of providing mass housing and mobilisation of housing funds for the neediest in society.

FMBN provides long-term credit services to mortgage banks in Nigeria and other mortgage institutions at rates that will allow the mortgage banks and institution grant loans to individuals who want to acquire their own houses. It encourages and promotes the establishment and development of mortgage institutions at federal, state, local, and even rural levels.

It encourages the growth of secondary mortgage institutions to meet the housing needs of Nigerians. The Federal Mortgage Bank of Nigeria gives licensing authority for secondary mortgage institutions in Nigeria.

From time to time, the bank also introduces different innovative mortgage-related programs and products to achieve its mandates. The main goal of the FMBN is to advance home-ownership among every Nigerian by creating mortgage markets with a sustainable financing system.

Loans are directly accessed by Nigerian citizens through the National Housing Fund in accordance with the provisions of the NHF Act. The NHF is also to service the non-salaried informal populace.

On the other hand, NMRC as a secondary mortgage refinancing institution will inject liquidity from the capital market to support mortgage loans accessed through respective financial institutions.

NMRC refinances portfolios of mortgage & commercial banks rather than originating individual mortgages and will cater for financial institutions rather than individual borrowers.

The institution also helps to bring down the cost of mortgage loan by improving market efficiency, lowering cost of funds and allowing for longer repayment tenor period by financial institutions. NMRC as an intervention medium encourages access to mortgage loans from financial institutions at currently approximately 2.5% above where the Federal Government borrows.

Lower income households will benefit from direct jobs created by the construction of new housing units and services required to build a home and deliver it to the final customer.

While, Family Homes Funds will leverage its capital in facilitating access to affordable housing for millions of Nigerians on low to medium income groups. Through strategic partnerships with various players in the sector. The Fund also supports the development of a local content framework for inputs into the house building process, to ensure that up to 80 per cent of manufactured inputs are locally produced.

However, leveraging its capital to support the supply of new homes for families on low to medium income is only a means to an end. The key priority for the Fund is to take advantage of the opportunity a large scale house building programme offers to create jobs which are sustainable and offer families security, improved quality of life and hope.

It is clear that the potential in CEOs of government owned housing finance institutions working together is huge, and it has never been more important for these organisations to be close partners, because much more can be achieved collectively than with a single player.

Heads’ of housing finance institutions must build strong partnerships to maximise this opportunity, unnecessary tensions amongst what should be very strong partners must be eliminated. Instead bridges must be built, and they must work together to provide the safe, decent and affordable housing that Nigerians need.

People must be at the heart of why there must be synergy among these institutions to increase and improve their capacity to provide many more truly affordable homes.

Homelessness in our country is unacceptable, so housing finance institutions need to embrace and appreciate each other’s differences and move forward to deliver stronger, more innovative housing solutions together, by doing this they can make the most of their partnership and start to make a real impact on the well-being of Nigerians.

Source: Affa Dickson Acho

Town planning schools:The challenge of planning African Cities

In this article, Professors Vanessa Watson and Babatunde Agbola discuss a paradigm shift occurring in Nigerian Planning Schools: from the American and European planning theories that have so far been applied in Nigeria to new theories more suited to dealing with the unique challenges presented by African cities.

According to Watson and Agbola (2013) in their book ‘Who will Plan African Cities’, “Planning is the single most important tool that governments have at their disposal for managing rapid urban population growth and expansion and Nigeria would seem to have an abundance of this tool to affect and effect the desired changes in the Nigerian urban space”.

Today in Nigeria, ,there are 49 Planning Schools, 31 of which are in Polytechnics and Colleges of Technology, while Urban and Regional Planning are taught in 18 Universities spread unevenly across the Nigerian geographic space. This is the largest assembly of planning schools on the African continent. The most poignant question, however, is how these number of planning schools has and their products impact the morphology of Nigerian cities or the livelihood of its citizens?

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That these number of planning schools and their products have not positively or evidently affected the morphology of Nigerian towns and cities may be traced to three factors: either the curricula of the planning schools are faulty or; the products of these schools have no leverage to practice what they learnt; or both.  In the view of Watson and Agbola (2013), it is more of a faulty curricula which feeds wrong professional practice which seeks to produce Euro-American cities on the African continent

Most planning educators in Nigeria,are products of top rate schools in the global north of Europe and America, including this writer. The received knowledge by these educators are mostly in contradistinction to the needs, aspirations and indeed, realities of African cities. The result is the transplanting of America and Europe knowledge of city plan to Nigeria . Yet, the form, functions and processes of these Africa cities are uncommonly different. Many of the attending problems of Nigerian cities are not the contending issues in the global north. No wonder Nigerian cities remain undeveloped but growing and its major problems remain unsolved.

This need has been accentuated by the Association of African Planning Schools (AAPS) beginning in 2008 when a major conference on evolving a new curricula by African Planning Schools was held. At that conference, thoughts of African Planning educators were distilled and five major themes that should be entrenched in all African Planning Schools curricula were identified as:

  • Informality
  • Access to land
  • Climate change
  • Collaboration between planners, communities, civil society and other interested parties
  • Mismatch between spatial planning and infrastructure planning

In addition to this effort and confronted by daring challenges of urban development in Nigeria, the Nigerian Institute of Town Planners (NITP), and the Town Planners Registration Council (TOPREC), have encouraged Planning Schools to come up with revised curricula to take into consideration topical issues of practical relevance to the lives of Nigerians. Taking the lead, for example, the TOPREC Mandatory Compulsory Development Programme (MCDP) 2013, an annual mandatory seminar series for planners nationwide was based on Climate Change with a message that all planning schools should include these in their curriculum.

These curricula changes to include all the five identified issues are being pursued with dedicated seriousness by TOPREC as they go on periodic accreditation and any planning school that do not have issues of common and practical relevance are refused re-certification.

The required change is very challenging but with collective determination of the planning schools and the unrelenting enforcement by the statutorily supervising bodies, the battle for a more realistic curricula for Nigeria’s planning schools can be evolved and implemented.

With this, the urban form and landscape of Nigerian cities can be more inclusive, growing with development with the possibility of having decidedly Nigerian cities with which the city residents can relate and be proud of as their own cities.

 SOURCE: Future Cape Town

NMRC:Bridging The Housing Deficit Gap Through Mortgage Refinancing

The Nigerian Mortgage Refinance Company (NMRC),was set up to bridge the funding gap of residential mortgages and promote availability and affordability of good housing to working Nigerians, and  to provide mortgage lending banks with increased access to liquidity and longer term funds in the mortgage market. Incorporated on 24th of June, 2013, the company is an integral part of the country’s financial system, with special focus on housing finance and, or the mortgage system.

NMRC is driven by substantial private sector participation consisting of commercial banks, primary mortgage banks, insurance companies, private equity investors, and implemented as a component of the Nigeria Housing Finance Programme, an initiative of the Federal Ministry of Finance in collaboration with the Central Bank of Nigeria (CBN), the Federal Ministry of Power, Works and Housing, and the World Bank/International Finance Corporation (IFC).

The company has the mandate to resolve access to affordable housing finance and, more importantly, as a focal point for creating an enabling environment for housing finance by playing a strong developmental role in supporting the improvement of land, legal framework,  housing development and construction.

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Thus, it is the hope for low-income earners, who cannot afford the cost of a mortgage loan. The introduction of NMRC has reduced the cost of mortgage loan by improving market efficiency, lowering cost of funds and allowing for longer repayment tenor period by financial institutions.

This initiative is for the benefit of all Nigerians in the long term, average Nigerians with sustainable and verifiable level of income can access mortgage loans easier and faster from participating mortgage lenders.

These institutions will be better equipped to provide long term loans having refinance from NMRC. It will enable developers to build homes faster and allow these homes to be purchased at an affordable cost.At inception, the World Bank approved a concessional $300 million, International Development Association (IDA) loan to facilitate the execution of the Housing Finance Programme.

About $250 million of the IDA loan will be disbursed in installments to NMRC as Tier 2 Capital based on key performance indicators–it will be retained on NMRC’s balance sheet to provide credit support for NMRC’s bond issuances.

The balance of $50 million will be allocated to other components of the Housing Finance Programme. NMRC has 18 pilot States, these include: Abia, Anambra, Bauchi, Bayelsa, Delta, Edo, Ekiti, Enugu, Gombe, Kaduna, Kano, Kwara, Lagos, Nasarawa, Ogun, Ondo and the FCT.

The Lagos State government has led the way by signing a Memorandum of Understanding (MoU) with NMRC to deliver 20,000 houses, under the State’s Lagos Affordable Public Housing (L.A.P.H.) initiative, to help bridge the housing gap in the State.

The MoU will avail residents of the State the housing affordability and accessibility that NMRC provides through the refinancing of long-term mortgages.The partnership with NMRC also includes Ibile Holdings Limited, the state’s investment company as well as some developers engaged by the state through direct and Joint Venture Initiative to deliver 20,000 housing units by the end of 2018.

At the signing of the MoU, the Lagos state Commissioner for Housing, Prince Gbolahan Lawal, revealed that the Ministry is working on various modalities to ensure accessibility of the citizenry to these housing units.

By creating an enabling environment for mortgage finance, State Governments will be able to attract NMRC to refinance mortgage loans created in these states. This will in turn improve the economy of these states by increasing employment/labour and housing production by stimulating housing construction and manufacturing of building materials in such states.

The opportunity presented by the housing market can be exploited if all Government agencies (State and Federal) and Private Sector (Financial Institutions and Construction Companies, etc.) act responsibly. What this means is that households wishing to either, develop their existing home, or acquire a home of their own, must know that they have easy and fair access to a certificate of occupancy without any doubt.

Land registries in the States must provide access to these rights at a low cost and within a few months rather within a few years, as is often the case. Mortgage Institutions have to provide transparent product offerings, with standardized documentation, so that consumers can make self-assessments and develop realistic savings plans towards financing their homes.

Construction companies, artisans, suppliers of building materials, have to start building homes of real value and not of speculative value. This means that the quality and cost of homes should be easy to assess without large costs to the borrower.

As part of its contributions to the housing sector,NMRC is also ensuring the availability of data to drive housing development and sustainable lending through the introduction of its housing information portal and mortgage market system. The systems have been developed and is in use by mortgage lending institutions to drive improved access to lending and property as an ecosystem.

SOURCE: Affa Dickson Acho

3 tips for aspiring housing entrepreneurs in Africa

With World Bank showing that nearly 61% of Kenyan urban residents live in slums and the country has a housing deficit of over 2 million houses, it’s evident that the Kenyan housing sector needs a drastic overhauling.

Slow growth in the sector is preventing Kenya from reaching its economic potential with the key to unlocking the sector’s vast potential being the provision of affordable housing.

In its last Economic Survey Report, the Kenya National Bureau of Statistics recorded the annual average employee income in Kenya as 684,097 KES, showing that home ownership, even in Nairobi’s purportedly affordable satellite towns, was out of reach for most Kenyans.

In recent years, global giants, IKEA and Hilti’s foundations have moved into Kenya’s housing sector. Together with Habitat for Humanity, the world’s foremost social-impact organization in housing, and other partners (Pangea Accelerator, BDO and Strathmore University and iBizAfrica) IKEA and Hilti have scouted and are supporting changemakers improving access to housing in Kenya.

Launching the ShelterTech Accelerator in Kenya on Tuesday, Pangea Accelerator and partners selected 24 out of approximately 100 applications to provide expertise, networks and a chance to get up to $100,000 in funding.

From talking to startups making waves in the sector and industry experts, Business Insider SSA compiled tips for aspiring shelter entrepreneurs.

#1. It’s all about the money

“Whether you’re bringing renewable energy in homes or recycling heat in buildings, businesses in this sector need significant capital to survive. On the plus side, there’s less competition: we’re one of 6 similar firms in the country. But the on the flip side, if you’re outside, it’s hard to get in,” Greenhub founder, Brian Ouma, explains.

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#2. Know Your Customer

Nawiri, a social enterprise providing shared living spaces for low-income women, mapped out the needs that their target customer faced. In the end, they realized that to remain sustainable, they’d need paying customers and yet their target customer often lacked access to job opportunities.

Therefore, they set out to develop partnerships and skills training with local businesses to provide employment opportunities to their clients, providing both themselves and their customers with revenue and adding value to their product.

#3 Talent Turns Tables

Getting the right people on your team is just as important as having enough capital, especially in this sector.

Pangea Accelerator held #AcceleratingShelter in September, gathering startups in the housing, waste management, water and sanitation and renewable energy ecosystems to discuss and deliberate on startup needs in the industry.

Participating startups noted that getting talent, especially engineering talent, was particularly hard and smaller firms often had a high turnover due to poaching by established companies, leaving them locked in a cycle of recruitment and training.

SOURCE: PULSENIGERIA

Redan to Unlock Huge Potentials in the Real Estate Industry • Set to Unveil New Office Building.

The creation of the The Real Estate Developers Association of Nigeria (REDAN) was driven by the need for a body to represent the interests of developers involved in the Housing development sector within the national policy and implementation discourse. REDAN’s role is unique as its members face very specific issues. The Housing sector has particular characteristics, requires specialized knowledge, and imposes certain practical parameters on the players involved in the delivery of Housing.

The purpose of REDAN is to act as an umbrella body of the organized private sector (public and private) responsible for housing development in Nigeria, REDAN was conferred with official recognition by the Federal Government of Nigeria in November 2002.

REDAN has the mandate to effectively represent its members to achieve their corporate objectives and to effectively carry on their business as agents of housing development, REDAN also supports the Government and organized private sector to ensure that they meet the housing needs of Nigerians. REDAN also ensures balanced national legislative, regulatory and fiscal policy to provide the enabling framework and environment for effective housing delivery.

With the membership strength of over 2,000 members, the association is capable of meeting the expectations of all its stakeholders, and serving as an effective pressure group that will drive through legislation aimed at enhancing the enabling environment for mass housing provision at the National Assembly; contribute to and reshape the housing finance policies of the: Central Bank of Nigeria, Federal Mortgage Bank of Nigeria, Primary Mortgage Banks and Commercial banks, the Nigeria Mortgage Refinance Company; expedite the much needed reform in the mortgage finance sector, and thus promote the business interests of its members.

As Nigeria’s most influential and credible voice in the real estate development and investment industry and a  notable force in influencing industry policies and practices; with strong local and international recognition in all issues affecting the Nigeria real estate sector, members of REDAN, enjoy some privileges, rights and responsibilities, these rights  include but not limited to the following:

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The privileges, rights and responsibilities accruing to members of the Association shall include but not limited to the following:

  • Credibility and recognition as Developer.
  • Opportunity to access Estate Development financing from the Federal Mortgage Bank of Nigeria (FMBN) and sell housing units to National Housing Fund (NHF) Contributors under the NHF Mortgage Loan Scheme.
  • Support for land Acquisition, participation in the Public –Private Partnership (PPP) scheme for Infrastructure and Estate Development.
  • Access to finance under the REDAN Real Estate Investment Trust (REIT) scheme, or other local and          offshore development loan syndication schemes under the auspices of the Association.
  • Opportunity to access credit finance / materials and equipment at specially discounted rates for members.
  • Access to information on development affecting real estate business.
  • Business linkage and marketing assistance.
  • Access to project preparation consultancy, advisory and support services
  • Intervention in member’s real estate development problems
  • Participation in capacity building programs local, regional and international trade events, seminars, workshops and exhibitions
  • Access to University of Lagos Centre for Housing Studies & other Local training opportunities for capacity development
  • Access to NAHB resources through REDAN’s affiliation with IHA
  • Access to foreign training programs and other International training facilities
  • Complimentary delivery of Newsletters, e-newsletter and relevant industry documents and information to members
  • Easy access to industry news, information and networking through REDAN Facebook and twitter accounts.

In pursuing the interest of its members, REDAN under the new leadership, led by Rev Ugochukwu Chime, has commenced the construction of The REDAN House, Abuja, which undoubtedly has projected the present leadership as visionary and focused.

There is no better time for real Estate Developers to identify with the activities of the organization to promote the housing sector in Nigeria than now.

The new leadership is also striving to reposition the body to ensure formidable discharge of its mundane responsibilities in areas of housing advocacy and standardisation of products and services.

The President, Rev. Ugochukwu Chime stated this in his acceptance speech and investiture as the president of the 5th REDAN National Executive Council 2018-2020 in Abuja.

He said “In REDAN, we provide houses; we also regulate to avoid cheats within the system. Take for instance, the NLC (Nigeria Labour Congress) engaged a developer who was not known to us; he has never consulted us and eventually, they were defrauded. If they had come to our association, we would have been able to give them a genuine developer whom we can stand by. So, we play a very important role in regulating those who are in the building industry and belong to our association. We make sure that people deal with trusted developers. We have relationship with all stakeholders in the building industry.”

Chime also noted that under his leadership, the association will seek greater cooperation with relevant government agencies to deliver affordable houses to Nigerians.

He said “We shall further the work we initiated with Federal Mortgage Bank of Nigeria (FMBN), Nigerian Mortgage Refinance Corporation (NMRC) and other stakeholders to ensure ease of doing real estate business and make home ownership accessible and affordable, while expecting cooperation from policy makers and other agencies,”.

The Real Estate Developers Association of Nigeria, is totally committed to the future of socio-economic development of the country and articulating, profound and propel strategies that would unlock the huge potentials in the real estate industry.

SOURCE: Affa Dickson Acho

Family Homes Funds will address the challenges of affordable housing

 

As Nigeria continues to urbanize rapidly, adequate supply of affordable housing will be fundamental to actualizing national development targets and enabling the country to maintain a high rate of growth, with cities contributing an increasing share of new employment and GDP.

The structural shift out of rural areas and toward a higher-productivity manufacturing and service-based economy will drive population growth and new demand for housing in cities Lagos, Owerri, Port-Harcourt, Eket, FCT, Enugu, Benin, Kaduna, Makurdi etc etc.

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Urbanization has been used as a tool to accelerate economic growth and poverty reduction in many countries around the world, and affordable housing will be instrumental to helping Nigeria achieve its goals for increasing productivity and inclusive urban growth.

Nigeria has a substantial deficit of quality affordable housing. Almost 70 percent of households in Nigeria are still living in poor conditions. Meanwhile, the majority of new demand for housing will be concentrated in only a few major cities and industrial zones. Together FCT and Lagos, will account for around two-thirds of the new housing demand.

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The Family Homes Funds will address the challenges of affordable and equitable housing for all Nigerians through the following measures that will be implemented:-
– Increase and reorient government spending in the housing sector. In particular, focusing on programs that support and target the lowest two income quintiles and high growth cities, where the need for housing is most urgent.
– Program would include initiatives to improve access to housing finance, stimulate supply of affordable rental housing and enable delivery of core housing to support the self-built housing sector.
– Prioritize structural reforms to improve governance of the housing sector and urban land management.
– Support market development by investing in the building blocks of a functioning housing sector, including regulatory reforms to incentivize greater private sector participation, improved real estate information systems, as well as monitoring and evaluation standards.

RECOMMENDATIONS FOR IMPROVING ACCESS TO HOUSING FINANCE IN NIGERIA

 

Housing Microfinance is an interesting innovation appropriate for the Nigerian market. It functions by providing small, short-term loans to match step-by-step housing construction that the lower-income segment can afford. Technical support ensures that people get the best possible housing for their investments.

With a population of over 70 million low-income people and an almost non-existent mortgage market, the opportunity for a housing microfinance business model is evident. Nigeria’s housing finance sector depends on the active participation of both the public and private sectors.

The following recommendations are broken down into issues affecting
(a) Policy and Regulation
(b) Financial Sector
(c) Capacity Building and Knowledge Gap
(d) Housing Sector

POLICY AND REGULATION
Challenges
• Difficulty in procuring consents for transfers, title deeds and very high processing costs.

Recommendations
• State governments should make administrative amendments to the Land Use Act to delegate endorsement of consent to Commissioners. At the national level, a Director of lands should do this
• Simplification of land title registration and revision of procedures and cost structure. Revised fee schedule should be capped at 0.5%. Subsequent land transactions should NOT require Governor’s Consent but mere registration of title
• Policies and programmes should be aimed at the low income segment focusing on assisting them to acquire, build or improve their homes through easy accessibility to land and securing of title documents

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FINANCIAL SECTOR
Challenges
• Lack of access to funds by potential homeowners and PMIs. There also exists absence of synergies for generating construction and mortgage finance
• Low funding base and poor corporate governance of PMIs
• Absence of secondary market
• FMBN’s poor capital base
• High down payment percentages
• Sectoral illiquidity issues
• Inadequate investments by pension funds

Recommendation
• Housing microfinance for the low-income population is critical and resources should be committed to researching and understanding this emerging sector. There should also be concerted technical assistance programs and housing support services to be administered by the government
• The CBN should direct PMIs to recapitalize to position them to finance big ticket transactions and to provide long term funding to developers and end users. The CBN should also encourage Mergers and Acquisitions among PMIs.
• Institutionalize a code of corporate governance in the management of PMIs
• CBN should issue a 20-25 year bond in collaboration with the Debt Management Office and use the proceeds to refinance eligible mortgages
• FMBN should be given adequate resources by the government to strengthen its financial and operational capabilities
• Government should provide a form of security to financiers/home buyers, for example securing a percentage of the total amount in case of default through a mortgage insurance scheme. This security should be targeted and removed after a certain period so that the mortgage insurance scheme can operate independent of government. This would help to reduce current down payment percentages required from home buyers.
• Development of liquidity facilities framework for refinancing qualified mortgage assets of Deposit Money Banks and PMIs to fund affordable housing
• Review existing provisions and allocation framework to allow for more participation of Pension funds in long term finance for housing

CAPACITY BUILDING AND KNOWLEDGE
Challenges
• Absence of data
• Lack of trained and skilled housing finance personnel

Recommendations
• The CBN, FMBN, Housing Finance Professionals Association of Nigeria (HoFPAN), CIBN and Mortgage Bankers Association of Nigeria (MBAN) should collaborate to institutionalize training leading to the certification of professionals in the mortgage and housing finance sectors. The National Universities Commission (NUC) should be encouraged to offer courses on housing finance at Universities
• A Real Estate Information Centre that will warehouse data and information on the real estate and housing market should be established. The centre will be the repository of market information on key data in the housing sector
• Capacity development and training for real estate professionals should be done through local and international training programs, seminars, workshops and study visits

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HOUSING SECTOR
Challenges
• Infrastructure challenges
• Affordability and cost issues

Recommendations
• The Federal Government should set up a Housing Infrastructural Development Trust Fund to provide incentives to participating State Governments to induce provision of housing related infrastructure in their states.
• Basic building materials should be given tax and duty relief and government should develop incentives to encourage both the public and private sectors to use indigenous building materials
• State and federal governments should engage housing finance experts to develop viable framework for public private partnership for housing and infrastructure
• Government, developers and financiers should work together and come up with strategies that can make housing affordable especially to the low income segment. Strategies may include granting tax holidays to developers and providing free land to them to reduce the cost of producing houses

Why money alone can’t help beat poverty in Africa, here’s what is needed

Money is not the currency of well-being, sustainability and community cohesion. Nigeria recently surpassed India to become the country with the highest number of people living in extreme poverty: 87 million. Nigeria is oil rich and boasts Africa’s fastest growing economy. Yet six of its people fall into extreme poverty every minute.

This story isn’t unique to Nigeria. It’s echoed in other resource-rich countries like the Democratic Republic of Congo and Angola where an exploitative elite and multinational companies keep wealth from reaching the majority of citizens. By 2030, it’s estimated that 82% of the world’s poorest people will live in Africa.

This is the continent’s paradox: vast natural resources and mineral reserves alongside extreme poverty.

Historically, poverty has been predominantly dealt with as a lack of material resources or an income deprivation issue. Development work has focused on pushing resources to poor communities. Many have criticised the availability of “free money” though international aid, which they say has created a “dependency syndrome”, dishonest procurement and white elephant projects. Aid work has also been accused of fostering paternalism rather than partnership.

The reality is that poverty is about more than just money. If money alone were the solution, poverty would have ended: more than $50 billion was given as overseas development assistance to Africa in 2017 alone.

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Without contextual knowledge, education and adaptation, foreign or imposed practices or resources cause new sets of problems. This is seen again and again across countries that depend on aid. For example, where food poverty was causing under-nutrition in parts of Malawi, financial aid has alleviated it. But that problem is quickly being replaced by diabetes and hypertension – because of a narrow financial solution to a complex problem.

We argue that tackling poverty requires a different focus, rather than just money. It requires partnerships and practices that promote learning, particularly in relation to cultural and self knowledge. Having communities identify their own problems, then collaborate to find solutions, is also crucial. Money has a role to play in partnerships, but projects shouldn’t default to depending solely on it.
Driven communities

Many of the factors that are blamed for contributing to poverty are not measurable in dollar terms or connected to income. These include people’s lack of choices, restriction of freedom, lack of skills, gender castes and barriers.

Understanding these issues and their complexities requires looking at poverty through a sustainability lens. This is a perspective that focuses on ethical and innovative ways to look at and use resources, share knowledge, and build community to affect positive change.

Our work with the Sustainable Futures in Africa Network has shown the importance of this lens. We’re an interdisciplinary collective of researchers, educators, and communities of practice that aims to build understanding, research, and practice in socio-ecological sustainability (which recognises the interconnection between social and ecological systems)
in Africa.

We work from the understanding that because poverty is multifaceted, solutions to alleviate it must be multifaceted, too.

A number of the community projects we work with are engaged in poverty reduction practices but don’t focus solely on generating income. These projects are driven by communities on their own with existing resources; they rely on their own abilities and efforts that are not externally funded.

One example is ECOaction, which works in a slum community on the outskirts of Kampala in Uganda. Residents largely rely on collecting and selling discarded plastic bottles collected from across the city for small amounts of money.

With no resource other than time and vision, residents have built a community hall from recycled water bottles and an urban garden that grows food for residents and a chicken farm. Colourful murals and sculpture can be found around every corner.

In Botswana, the Sustainable Futures in Africa team is working with a community in Mmadinare to develop a project that will protect their farm land from wild elephants. This will not rely on, or generate, external funding. But it will protect the farmers’ and the wild animals’ interests.

There are other ways to build strong sustainable communities without external financial resources. In Taba Padang, a village in Indonesia, sustainable community forestry is helping improve human wellbeing. There’s also Boomu African Village in Uganda, where a women’s group participates in eco-tourism and invests back into the community. They have built a nursery school and trained other residents in their village to get involved in eco-tourism.

Other self-reliance projects centre on health. For example in Lesotho, volunteers participate in community home-based health care and fill the gap in the community health care chain.

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There is, of course, no one-size-fits-all solution that will end poverty. But aid in the form of donated money, from one place to another, is culturally, practically, and ethically problematic.

Money is not the currency of well-being, sustainability and community cohesion. More often, it’s a tool for influence and power dynamics that will favour the creditor. That’s why partnerships that rely on different types of resources and bring people together to design and act on context-relevant solutions can be such powerful drivers of change. That’s why for resource rich Africa, promoting self reliance would be key to eliminating poverty.

CNBC Africa

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