Ugo Peace Udo is the Group Property Manager of Efab Properties Limited. His almost 20 years in the property business places him above many upstarts who have flooded the FCT. In this interview with EMEKA NZE, Udo talks about the necessity of government involvement in housing delivery. Excerpts:
Nigeria has 17 million housing deficit, do you think we can solve this problem in near future?
Shelter after life is the most important thing. For one to be organized in life, he must have a place where he rests after a hard day’s job. That is why shelter is at the centre of existence. Unfortunately, in this part of the world we don’t have population control, unlike in developed world were the reverse is the case. This is the reason the population will continue to grow.
By next year, this particular demand we need to meet will equally grow due to population explosion. Also, the fact that people keep on moving from rural areas to urban area has over stretched the facilities in urban areas. In the rural areas, we have enough houses there, but because there is no economic drive to sustain them, they usually tend to move.
Concerning the deficit that we have, a whole lot have been done towards providing affordable housing for the populace. We have many estate developers within Abuja and beyond that have the capacity, technical knowledge, financial muscle to close this gap.
The problem however, and for housing delivery to be complete; there must be syndication between the government and developers. This will ultimately bring down the prices for the people. That best explains the reason why there is so many houses in Abuja, yet people cannot afford or access them. Having many houses doesn’t reduce housing problems anymore because of its cost which is beyond the reach of a common man. This is why government collaboration is needed very much. Infrastructure forms about 50 percent of the cost of every house you buy.
If you remove the cost of infrastructure in any house, the cost will reduce by 50 percent and that is why we need government intervention. If you do what government is doing in housing scheme, like involvement of Federal Mortgage Bank, Mortgage financing we should be able to access these houses. The problem however, is the cost and not lack of houses. Because there is always a limit you can access loans. If there is government involvement in form of soft loan, infrastructural development like road networks, electricity and sewage system, because today the whole world is going green and we can’t be an exception, things will be better.
The provision of these incentives by government will no doubt drastically reduce the cost of production.
The feeling among Nigerians is that you are building houses that are beyond the reach of the common man?
The fact that we are building these houses alone shows our readiness to turn the sector around and produce houses that will stand the test of time. Don’t forget that we are businessmen and we don’t want to produce houses rats and cockroaches will live in.
We are looking at the standard and durability. If the environment is not strong enough, economy comes into play. I can’t build a house for N10 million and sell N5 million. I am not a charity organization but businessman. But we are businessmen with a hearts to deliver houses at an affordable rate based on the realty on ground.
Our readers will like to know the level of government involvement that will make the houses cheap and affordable?
Providing the land is a starting point. I don’t want to go into how we access the land, but I think it is not favourable. The cost of accessing the land now is on the roof. It means that before a developer comes in, he has to bring in a lot of banks, sometimes 10 banks to be able to access the land first. After this, he will now think of the building and engaging professionals for a fee.
You will also talk of development levy, certificate of occupancy (C of O) fee for mass housing developers. But what I am saying is that for us to get these houses at the cheapest prices we can, we must look at accessibility to land, funds. Our banks must be up and doing.
I should be seen to be participating in the housing industry by giving loans that are long term with considerate interest. We should also be able to get title easily, because people who want to access facilities need titles as collateral. All these factors being available will surely bring down the cost. Then, above all these, we need to see government being actively involved in provision of infrastructures. Most agreements with government and estate developers always state that government should provide primary infrastructure to make things easy for the developers.
Is it true that you go about bribing authorities, especially in the FCT just to get land in which you build on?
I wouldn’t want to comment on this because I don’t know anything like that. To me, the normal way of sourcing land should be through capacity. It should be a situation whereby individuals who are interested should prove that they have the financial capacity to develop, so that the land will not lie fallow. Developing those lands will benefit everybody including the government that will be collecting premiums and ground rent and it will even reduce housing problem. This will certainly build capital base for the authority. What we have most times is third party purchase. It doesn’t always help the end user.
For the developer who has started collecting loans from anywhere and determined to develop those houses, he can’t decide to get facility at a higher rate. This is because his determination is just to provide housing in a way that will benefit him which is at a cheaper cost. If you get from a third party, we will sure give to an end user at higher rate. If the right procedure is followed, things will move well.
So many people have said that the competition in the industry has increased the prices, do you agree with them?
Well, to me there is no way competition will increase prices rather it will bring prices down. Any competition that increases prices means that something is wrong with the whole process. So in the real sense that shouldn’t be seen as competition, but that people are bringing in new innovations to housing construction in the city.
A house can be built with three million, it can still be built with four million depending on the material you are using and the pattern you want to adopt. If you build house with stick, it becomes cheaper, but an average Nigeria customer will prefer the one built with block. It could be due to the fact that he has acclimatized himself with block made houses over time and will know how to maintain it when there is need for such.
