Chief Executive Officer (CEO) of Fesadeb Communications, producer of Housing Programme on AIT and Housing Time on Raypower and promoter of Abuja Housing Show, Mr. Festus Adebayo, is an expert in the real estate sector.
His annual Abuja Housing Show, is the biggest in West Africa and one of the biggest in the world. In this interview with FRED ITUA, Mr Adebayo proffered solutions on how to fix the deficit in the housing sector. He also spoke on the forthcoming housing show and countries expected to participate.
This is the eleventh year since the popular Abuja Housing Show started. What is going to be different this year?
This year, Abuja Housing Show will be different. People have always asked us what we have done with the ten previous editions. This year will be unique. This year’s edition is not a talk show. We will be gathering to look for practical solutions to housing problems which we could not address during the 2016 edition of the show. There are a number of issues on ground regarding housing in Nigeria. But one of the biggest issues is affordability. The houses that are available, Nigerians cannot afford them.
Check the salary of the civil servants. Look at the salary of a director in the Ministry and tell me which of them can afford a house of N30 million. We will be looking how we can address the issue of National Housing Fund. This scheme will be 24 years old this year since it was established. We want to do an appraisal of what the fund has achieved. It was a fund that established with the objective of making available, funds for Nigerian workers to get homes. This means, they are expected to pay just 10 per cent and then spread the rest within a 25-year period. How many Nigerian workers have accessed that fund? Is there any wrong with the scheme? These are the questions that will be answered during the show. Our main focus is on how to solve the Nigerian housing problem, through innovative finance and infrastructure solutions.
We cannot talk about housing and leave out the issue of infrastructure. People live in Gwagwalada. Coming to the city centre is a challenge. How do we address these infrastructural deficits? according to Adebayo, cost of Land and cost of Infrastructure, double digit interest rate, cost of getting building approvals, lack of political will on the part of the government are the major barriers to housing development in Nigeria. He calls for the coordination in the activities of the newly established Family Homes Fund, FMBN, NMRC and Federal Govt. Staff Housing Loans Board; if there is harmonious coordination of these agencies we should be able to achieve atleast a little in home financing for workers.
Abuja Housing Show will be like a solution ground this year, where people will find answers to housing problems. So many Nigerians travel to America to attend builder shows. Some go to the United Kingdom to attend construction expo. Abuja Housing Show is Nigeria’s model and we are using it to attract investors. This year, there will be over 400 exhibitors, over ten countries have already confirmed participation . It is a must attend event for all estate developers in Nigeria.
Some of our brothers and sisters in diaspora want to own homes in Nigeria; But they are afraid to give their money to their relatives to build or buy a house for them. They do not want them to snap another man’s house and pretend that they are building it for them. How can they get homes here? Can we create mortgage system for them? These are the issues we will be looking at. Governors will be involved. In fact, we are looking at how we can reorientate the attitude of these governors about the importance of housing. There is also the issue of sourcing for capital finance for housing projects in the capital markets. We will look at this too. This is an area that has not been utilized. There are shares and dividends lying wasted. We can use these funds. Why can’t the Federal Government, through the Central Bank of Nigeria (CBN), have an intervention funding for housing? You are not a man until you own your house. We have decided to invite an expert from the World Bank on bank guarantees for house financing.
We will continue to work with Federal Ministry of Power, Works and Housing in our advocacy for affordable housing for Nigerians . In this 11th Abuja Housing Show,We will look at how affordable the houses they are building for Nigerians. We want to advise this government on how to solve the housing deficit. Remember we also have FISH. That is the Federal Integrated Staff Housing, being anchored by the Head of Service. We will be collaborating with them on the same issue of affordability for the civil servants . We will specifically address the issue of intervention Fund and interest rate to move the scheme forward. The show will review the success story of countries like South Africa, Singapore and other countries in Africa that have gotten their housing scheme right. What is wrong with us? Why can’t we get our own right? It is time to beg our policy makers to make housing sector work in Nigeria.
Accessing mortgage is a big challenge in Nigeria. In a simple language, how can Nigerians overcome this challenge?
The only way to address poor mortgage finance in Nigeria, is for the Federal Government to have the political will and keep its promise of recapitalising the FMBN to the tune of N500 billion. That will make the Mortgage Bank have enough funds to give out to primary mortgage institutions. There is need also for Central Bank of Nigeria to monitor the activities of primary Mortgage banks to ensure that mortgage or mortgage refinancing loan are properly utilised.
We also need to know the number of houses or mortgages being created on monthly or yearly basis, so we can use that to monitor all the development in the mortgage sector of the economy , to achieve that we will need to establish a data bank for collation of data or information relating to Mortgage and housing in Nigeria. This no doubt will help in Policy formulation .
The Federal Government needs to work with the commercial banks to ensure that they are housing-friendly. That is the only way we can solve the problem. We need intervention funds. Let the Federal Government budget a certain percentage of our annual appropriation on housing. Let us encourage our National Assembly members to go into constituency projects that will focus on housing. Once the demands are increasing, prices will be forced down. Look at houses that were built during President Goodluck Jonathan’s era. Now, nobody is buying those houses in Abuja.
We must ensure that the Federal Mortgage Bank works. The CBN too must work. CBN should monitor the activities of the Mortgage Bank which is under its control. Let the state governments help us. If a civil servant in Abuja cannot have a house in Abuja, he can get in his home state.
How can we source for funds through the capital markets?
There is the pension fund. We have huge amounts there. Why can’t we use part of it for infrastructural development? Why can’t we use part of it to solve the housing problem? They are untapped funds. There are also funds from unclaimed dividends. All these pool of funds should be channeled into housing. Go and look at the poor allocations given to housing in all the states. They are insufficient. The housing sector is capital intensive. There is no money anywhere. The private guys going into housing are there for profit purposes.
The new innovation is Islamic Banking. This banking is unique. It does not attract interest rates. Islamic banking can help us. Today, one of the banks is financing a housing project at no interest rate. Another Islamic Bank has a department for non-interest banking. All the banks are about to do the same thing. The challenge now is how to change the mindset of developers to key into the non-interest banking.
By FRED ITUA