Nigeria Can Fix Housing Deficit With Planning, Rigorous Implementation- Fashola

(Photo caption) From left to right: Haruna Jalo-Waziri, Executive Director, Capital Markets Division of The Nigerian Stock Exchange (NSE); Apostle Hayford Alile, Pioneer Director-General, NSE; Oscar Onyema, NSE CEO; Abimbola Ogunbanjo, First Vice President, NSE and Ayo Gbeleyi, Managing Partner of GA Capital Limited and representative of the Minister of Power, Works and Housing at the NSE Real Estate Investment Trust Conference today at the Exchange on Tuesday, May 23, 2017.

• Says Local Building Materials To Get Preference

Babatunde Fashola, Minister of Works, Power and Housing, on Tuesday in Lagos said the nation’s housing deficit, no matter how huge, can be fixed with sustainable planning and rigorous implementation.
To sustain supply of housing, he said the Federal Government plans to standardize designs, while industrializing production, announcing plans to engage small and medium scale businesses in the building industry.
In a keynote speach at the Sub-Saharan Real Estate Investment Trust (REITs) conference organized by the Nigerian Stock Exchange, the Minister said the Muhammadu Buhari administration plans to standardize “fittings such as doors, windows, roofing sheets, tiles and other components, it allows us to use these standards to stimulate local mass production of fittings and finishing to meet the demands of mass housing.”
As part of the government’s bid to patronize materials, he said imported materials will not be used in the housing schemes, where there are local alternatives, thereby achieving one major objective of the government’s vision and strategic goal of diversifying the nation’s economy.
“For example, the smallest of houses will have at least a main door, a kitchen door, a room door and a bathroom door making a total of four doors.
“In order to build 250,000 units of that type of house, this market will need to produce one million doors. This does not include pipes, taps and sockets for electrical appliances.
“I leave you to imagine what this can do for our economy if we produce all these items locally.”
While surveys show that electrical fittings like sockets and door locks are still largely imported, he said the Federal Government would use its “demand capacity to stimulate local manufacturing or assembly, in order to keep the jobs in these areas at home.
“The next step toward industrial production is to reduce the time it takes to build a block. Our recent experience shows that a block of 12 flats usually takes 12 to 18 months at the quickest and we are looking at designing moulds that reduce this time to six months or less.”
He assured also that the policy framework for standardizing designs, use of local materials, and registration of developers has already started.
Meanwhile on funding of the sector, Fashola said the administration budgeted N35bn, small as it was, was 1900% more than the N1.8bn of the previous administration, adding that construction work started in Q1 2017 in 33 states that provided land across the country.
“We intend to intensify our efforts and push harder with the 2017 Budgetary Allocation.
In the medium term, we intend to raise more capital outside direct Government Treasury, working with the Federal Ministry of Finance, through Infrastructure Bonds, REITS and other forms of real estate financing instruments, leveraging as most appropriate the platform of the Nigerian Stock Exchange.
“Funding sources such as pension funds, private equity funds, and the
National Housing Fund managed by the Federal Mortgage Bank to finance development and also acquisition will be our focus,” the Minister stressed.
Welcoming resource persons and participants, chief executive of the Nigerian Stock Exchange (NSE) and chief host of the event, Oscar Onyema, noted the stead and consistent growth of Nigeria’s real estimate over the last decade.
He pointed to the PricewaterhouseCoopers report titled, ‘Real Estate: Building the Future of Africa,’ which predicted that the nation’s real estate investment will rise by about 49%, from $9.16bn to $13.65bn in 2016, attributed to a demand for residential property development driven by a growing middle class, besides indirect, retail, industrial and commercial real estate development.
“We believe that this growth can be accelerated by deploying capital market tools such as REITs, listing of real estate companies, and creation of real estate ETFs to unlock capital in the sector.
“Since 2007, when the Securities and Exchange Commission (SEC) introduced the framework for the establishment of REITs, the Nigerian investing public has been given an opportunity to invest in a diversified portfolio of choice real estate assets,” following which the NSE now has about N40bn in REITs market cap listed and a total of N96bn in the Construction/ Real Estate sector of our equity market.