Why people are not putting money into rental housing —Ajayi

March 9, 2021
11 Views

Dr Moses Bunmi Ajayi, a former President of the Nigerian Institute of Town Planners and past President of Association of Professional Bodies of Nigeria, is the Principal Partner, MOLAJ Consultants. In this interview with DAYO AYEYEMI, he speaks on the inability of government to match the nation’s growing population with affordable housing provision. He expressed concerns on the issues of rental housing and importation of building materials.

Are you not worried led by Nigeria’s large population and huge housing shortfall for low and medium income groups?

The fundamental issue you raised has serious and wider implication. This is the issue of large population and growing population with no economic base to engage that population’s usefulness.  We have a large army of unemployed youths and semi-unemployed even when they are selling handkerchief. A lot of them are unemployable and these unemployable people are in three categories. There are those that have certificates under questionable circumstances; or their certificates and capabilities don’t match each other. There are those in the north who don’t even have any education at all; and there are people who are in-between. The major problem is that they are the largest percentage of the population. Now they are at the age where they have a lot of energy; they are at the age where they are supposed to be very resourceful, but they found themselves in a situation where the economy does not make any provision for them. Socio-economic situation does not provide for them, so what do they do? A lot of them go into crime in one direction or the other. In the north where they don’t have education and somebody has successfully given them guns, they started using their guns to make money through kidnapping.

In the south where a lot of them have university education, they started 419, and because they have knowledge, they stay at home with their laptop, doing business. They start their own business, but unfortunately most of the businesses are fraud. You cannot talk of housing in isolation. Even in developed countries nobody will give you mortgage if you have no job.  It’s not free distribution of money apart from the country where the population is very small and there are more houses than the population. Under normal situation, you need to have a job before somebody can give you a mortgage because once you break your mortgage payment, you lose your house.  When people have no job, how can they pay mortgage? How can they build houses? Unfortunately, in this country, all the laws that have to do with houses are in favour of the tenants and against the landlords. Consequently, a lot of people are not putting their money into rental houses any longer because the tenants will not pay rent and will take you to court. The case will go for five years and at the end of the day, he will run away.  So a lot of people are not putting their money into rental housing. That is why rental housing is very scarce and very expensive. Rather, they put money into real estate to build and sell.

 Who are they selling to?

They are selling to privileged people. They are selling to guys who have very big jobs. So housing cannot increase at the rate at which population is increasing. It is not possible because there is no real mortgage. You must earn income before they can start talking about house. And don’t forget government needs the same money to create jobs, build houses and do mortgage financing. The private sector which is supposed to do a lot of these things is limited by government’s laws and regulations. These are not helping the matter. Government in this country does not help anybody, even when you have an idea, government will help you to kill it with regulations. Once you have to take permit from somewhere, you are in trouble. Someone in-charge thinks that this is an opportunity.  I have one case in my hand. Somebody wants to build a supermarket that would have created jobs for 200 Nigerians. He changed his mind and moved out of the country.

Why?

When he brought his design, the assessment fee the government’s agencies asked him to pay was N13 million. After that they asked him to pay infrastructure development level (IDL) of N33 million. The person who was going to supervise the building from LABCA asked for N6 million. Everything was about N50million. The man just decided that with that money, he could start a business abroad.

  

Can you link this to plethora of vacant houses in Nigerian cities?

Yes!  Go to Ikoyi, Lekki and Ajah, empty houses are more than the occupied ones. This is because the economy is down. When they were building those houses, their developers were looking at economy that was growing very well. The economy is down now and the middle class that is supposed to buy houses is no more there.

What are the solutions to issues of job opportunities for  youths so that they can own their homes?

If I had my way, there would be a form of restructuring. It is not going to be a political restructuring that people are talking about, but restructuring about the issue of economy. Government cannot run business. That is what I am taking about. The role should be given to the private sector.  We should look at all the laws and regulations. Which are the ones that are inimical to private sector development? Let every sector sit down. If people say they are interested in investing in farming, let us sit together to find out the inhibiting problems and discuss them. Government should now focus on private sector running the economy. Government should just give policies and moderate them, but it is the private sector that is putting in the money. They were trying to do that, but they reversed it along the line. Former President Obasanjo and the rest of them that was the direction they were already going by creating the enabling environment for the private sector. The civil servants know that once that happens, they will not be able to make money. However, let the private sector run the economy and use technology.

 

How do we revamp the Nigerian economy through housing?

All over the world, it has been proven that when you have a depressed situation and you have to wake it up, put money into real estate. That is the experience all over the world. I agree with that, that when you put money into real estate, you will employ many people. That is why you don’t have many useless people in Lagos. So construction keeps a lot of people busy and has a way of contributing to the Gross Domestic Product (GDP). Government should put a lot of money into real estate development.

 

What is your take on importation of local building materials?

It is inimical to our economy, and that is why I’m saying that government policies are always against the nation’s growth. If you ask anybody the types of taxes government put on local manufacturing of building materials, you will be surprised. There are places where you can find all these materials such as marbles, tiles and ceiling materials and the rest in Nigeria, but it cheaper when you import than the locally manufactured one. Some of the challenges faced by manufacturers in Nigeria are that by the time you need to get permit from government’s agencies, there is no thinking that this man wants to invest here and let us create enabling environment for him. Rather, they would ask him to bring N500 million and other things. All these discourage investors and they walk away.

YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE

COVID-19: Nigeria Close To ‘Flattening The Curve’ ― Analysis

Nigeria may be close to flattening the curve of the COVID-19 pandemic as confirmed cases in the country keep dropping weekly, Tribune Online analysis has shown. This is even as the much-expected COVID-19 vaccines arrived in Abuja, the Federal Capital Territory last Tuesday…

Inside Ibadan Bound Train From Lagos

The train started the 156.65 kilometres journey to Lagos at exactly 08:00hrs. The pace of its acceleration was minimal. At about 25 minutes, the train slowed down at the uncompleted Omi-Adio terminal, a village on the Abeokuta/Ibadan expressway; it’s a stone throw from Apata in Ibadan. Conveyance of passengers from there and other terminals has not kickstarted as the terminals are still under construction and workers were found there…

Killer Herdsmen: Untold Story Of Ibarapa’s Worst Nightmare + VIDEOS

“Please do not talk to my father. He is yet to come to terms with the death of his son. It is a most tragic experience. How does one quantify the loss of a dear brother? My brother was killed like an animal by two herdsmen. His offence was that he asked them to drive their cows off his already cultivated farmland,” Bisi Olaosepin, whose brother was hacked to death, struggled to hold back his tears as he relayed to Sunday Tribune the horrible experience that culminated in the passage of his brother…

Pollution, Deforestation: How Ignorance, Unclear Environmental Policies Influence Booming Fish Smoking Industry

Rays of the afternoon sun pelted her head as she fanned the embers beneath the half-cut iron drum with the smoke permeating the air. “This smoke is unbearable, Iya Maria,” said one of the three neighbours conversing under a makeshift shed about five meters away. Their voices rose and fell intermittently…

You may be interested

News
3 views

Gunmen attack police station in Abia

admin - April 20, 2021

Gunmen attack police station in Abia Posted by News Express | 19 April 2021 | 286 times Gunmen have attacked…

There won’t be elections in 2023 if we don’t sort out security — Ex-DSS official 
News
3 views
News
3 views

There won’t be elections in 2023 if we don’t sort out security — Ex-DSS official 

admin - April 20, 2021

There won't be elections in 2023 if we don't sort out security — Ex-DSS official  Posted by News Express |…

Gunmen hijack commercial bus with passengers in Rivers 
News
3 views
News
3 views

Gunmen hijack commercial bus with passengers in Rivers 

admin - April 20, 2021

Gunmen hijack commercial bus with passengers in Rivers  Posted by News Express | 19 April 2021 | 344 times Gunmen…

Leave a Comment