As President Muhammadu Buhari gets set to constitute his cabinet with a view to giving direction to his economic policy, investors in the real estate sector have tasked the president on the need for a review of the age-long Land Use Act, and are asking that he come up with a special interest rate for housing loans.
The investors contend that acting on these two issues will have a positive impact on the real estate sector and the economy as a whole. They describe the Land Use Act and the high interest rate in the open market as twin evils which have held down growth in the sector for too long.
The Land Use Act, brought into being in 1978 by the military government under Olusegun Obasanjo, vests ownership of land on state governors and has worsened land administration in the country, making access to land for homeownership or investment purposes very difficult for the citizens.
President Buhari’s re-assurance during his visit to Ghana on Monday that he would set up his cabinet before the end of September has raised expectations that a number of fundamental policy decisions would be made with a view to stimulating the economy.
“I think the new administration has brought an attitude of change. So, we expect things to move in the right direction. For us in this sector, we expect the president to address two basic things. One is the Land Use Act which we want the new government to look at and amend, said Edward Akinlade, the Group Managing Director of Suru Group Limited.
Akinlade added that the government should get the interest rate down, especially for real estate, to a single digit, believing that if real estate is funded well, it would create wealth for the economy and trickle down to small and medium enterprises (SMEs) which would generate revenue for government.
Akinlade listed taxation as one of the extraneous factors which make real estate development difficult in Lagos State. He further said “as a developer, you pay tax on land, to the surveyor general’s office, to omonile, for environment, transportation, infrastructural development levy etc”.
According to him, the new government should create an enabling environment for investors. Akin Oladiran, the acting managing director of Vitapur Limited, believes that with an enabling environment in place, the housing deficit in the country would be reduced significantly.
“Such enabling environment includes available policy on land, housing, finance, affordable building materials, appropriate institutional framework and sustainable construction workforce.
“Government should create a platform for long and short term fund for real estate and establish an infrastructure development bank”, he advised.
Oladiran disclosed that Vitapur had been positioned to serve as a unique solution to housing deficit in Nigeria, explaining that since it came into business in 2010, the company has undergone a robust transformation, leading to its acquisition of state-of- the- art sandwich panel plant which has increased its capacity utilisation by over 300 per cent.
As President Buhari looks through the integrity prism to select those to work with him as ministers, Bode Adediji, former president of the Nigerian Institute of Estate Surveyors and Valuers (NIESV) has charged the president to avoid the mistakes of past regimes in appointing the minister for housing, noting that certain ministries were critical to the economy.
“For sectors like Agriculture and Housing, Buhari should put people who know the sectors well and are committed to them. For housing, I urge the president to put professionals from the built environment, comprising architecture, estate management, town planning, land surveying etc. Look for professionals who have practical pedigree in production and not rent seekers”, he advised.
Source: BusinessDay – Chuka Uroko