Mr Benjamin Onigbinde is a Real Estate Economist and the Chief Executive Officer of SigVent Property Trust Limited. In this interview with TOPE SUNDAY, he reviewed how the Nigeria’s housing sector has fared.
As an expert in the building industry, were you satisfied with the performance of the sector in 2018?
Housing sector performance in the last few years especially last year was definitely below the average. The issue is definitely not about lack of appropriate policy or programmes, in my own view, it’s in two ways. First, the non – integration of programmes and policies at various levels of government and secondly, lack of full commitment in the implementation of the programme. In addition, the budgetary provision for the sector was very low considering the huge housing deficit gap in the country.
What are the major issues that you considered to have worked against the sector in 2018?
Some of the challenges that worked against the performance of the sector in the previous years have not changed; this includes the delay in approval of the borrowing required to fund the housing programme, the bottleneck regarding the land documentation and development control, due diligence process involved in approval of housing Projects. Low awareness regarding the access to housing fund, as well as low capacity delivery in human resources and artisan require for the building and constructions. Also, the land use act of 1978 is also part of the challenges confronting the sector.
What do you think can be done to address this?
All these challenges are not comical, it require focus and high level of seriousness on the part of all the stakeholders, especially the regulatory agencies. There is the need for integration of various housing programmes and policies at all levels of government. Effort must be made to improve the land documentation procedures, in some cases it takes more than two years to process Certificate of Occupancy (CofO) of landed property. This definitely affected both access to fund as required for housing development projects as well as approval for construction of houses. There is also the need to create more awareness on the process and opportunities available regarding access to housing funds. The Federal Mortgage Bank of Nigeria digitization programmme, ‘DigitalALL’ is a good initiative that could drive easy access to National Housing Fund. However, more still needed to be done to ensure sustainability of the process. Land use act of 1978 needs an urgent review, under this act, the government act has to be secured before any transaction on land can be completed. Banks also need to get government access to create mortgage facility. There is also the need to create more institutions to train more artisans to increase housing delivery process; most of the artisans engaged in our construction site are from neighboring countries. I hope Nigerian Institute of Builders will do more in this regard.
The sum of N26.7bn was approved for housing sector in 2018 by the federal government. Will you say there was any improvement in the sector during the year under review?
As I had stated earlier, our political system is a little bit complex and as it were, we are still unable to understand how to operate it effectively. Giving a proper template of budget delivery system as I believe we have one, the passage of the budget should not be delayed at all, so also the implementation of the budget. It quite unfortunate that we allow political considerations to create bottlenecks for budgetary approval, which coming back to your question definitely did not have a pleasant effect on the budget implementation for the year under review. The 2018 budget is expected to run to the middle of this year for this specific reason of delay in passage of the appropriation bill.
Despite all the challenges, there was much improvement in the sector in 2018. The Presidential Initiative on Family Housing Scheme set up by the presidency which I believe is one of the components of the National Housing Program with focus on Social Housing Scheme has done considerably well by launching 100,000 affordable home for low income earners. This will enable low income earners to own a house between N2m to N5M. The Federal Housing Authority has also performed very well with Low Cost Housing Estates in Kubwa, Lugbe and Zuba. This is expected to provide about 1,650 housing units. The Rent –to-Own Initiative of Federal Mortgage Bank of Nigeria is a value added programme that will also increase access to home ownership among low income earners. The digitization of Federal Mortgage Bank operations is also an improvement to housing sector in the year under review. There are lots of private sector driven housing projects and initiative that have also contributed immensely to the growth of the industry this includes the Millennial Housing Project by Sigvent Property Trust Limited which is a Lifestyle Premium House Communities that targets home ownership for young people.
What will you say was responsible for the non-full implementation of the budget?
The major challenge of full implementation of the budget is the gap between revenue projection and the budgetary provision. It took time for government to realize the budgetary provision for the year which necessitated the non-completion of most of the projects as scheduled. Since budget is mostly deficit financing, it takes more time to get the necessary approval from the national assembly for borrowing. So, also is bottleneck created by the government bureaucracy from approval to release of fund to implement projects.
Are you satisfied with NHP Programme? Is it feasible?
The National Housing Programme as instituted by the Federal Government is a very laudable project. Over the years, government has been consistently reviewed the public housing programme to bridge the gap in housing deficit in the country, most especially the in affordable housing sector. On the issue of feasibility, the programme is quite feasible; however, there is the need to integrate all the programme components from Federal Housing Authority, Federal Mortgage Bank of Nigeria, the various state government housing agencies, and the Private Sector to be able to achieve a significant result.
What are your projections for the sector in the 2019? Will you say that the government is committed to bridging the huge housing deficit in the country?
In order to improve the sector performance in the year 2019, there is the need for a total commitment of all the stakeholders in the sector both public and private, and against any political differences. Just as it happened in Shagari Housing Programme, there have been incidences of State Governments that are yet to allocate land for Federal Government for its Housing Project. You will remember that last year, the Minister of Works, Power and Housing, Mr. Babatunde Raji Fashola was begging Lagos state government to release land for the Federal Housing project in the state. I think 33 states have made land available for the projects. Also, the FISH programme is a fantastic one that needs more collaboration with the Private Sector. More can be achieved with proper implementation in this year. One of the major initiatives of FMBN is the Home Refurbishment Loan, which I think, is a fantastic idea that increases the livable housing stock in the country. I suggest that other Mortgage Institutions and Commercial Banks will do better by adopting their own version of these products. The Nigeria Mortgage Refinance Company is a major institution that we need to look out for this year. The company entry into the sector will instill more confidence in the mortgage industry.
