The Nigerian economy is known for its dependence on oil. Despite the global oil glut and fall in crude demand, the nation has not sought any notable form of economic diversification. With more than 250 million people, Nigeria’s real estate market could serve as a significant life wire for the economy.
The Nigerian real estate industry is promising and competitive due to the vast socio-economic potentials it holds. Yet, the government needs to resolve several daunting issues to reap the benefits.
Nigerian real estate – An introduction
Starting from the post-independence era, the history of Nigeria’s real estate development has so far remained both slow and ineffectual. Successive governments have come and gone, repeating the same strategies without achieving any encouraging feat. Each of these administrations either allocates funds to the ministry of housing and development or directly spearheads the construction of houses. It evidently goes without saying that the above strategies’ inefficacy is boldly noticeable, as each government failed, or at best, under-achieved its benchmark.
During the Feb. 1 executive meeting on the Finance Act 2020 and Economic Outlook for 2021 held by the PricewaterhouseCoopers (PwC) Nigeria, the Nigerian Institute of Builders revealed that the value of properties left to rot by the Federal Government is well over 230 billion naira.
In a statement, PwC Nigeria said the total value of dead capital from both residential real estate and agricultural land amounts to $900 billion. “About a half of Nigeria’s population live in cities, of which almost 80% of them are living in substandard conditions,” it said. “Finding the political will to act and unlock Nigeria’s dead real estate assets will have a transformative impact on the lives of Nigerians.”
During last year’s inauguration of a House ad-hoc committee to investigate the government’s abandoned projects, House Speaker Femi Gbajabiamila said that the existence of abandoned government properties –– valued at hundreds of billions and left to deteriorate –– should trouble the conscience of all Nigerians. They include:
- The Federal Secretariat Complex, Ikoyi, abandoned 29 years ago following the federal capital’s relocation to Abuja.
- The 14.5-hectare (35.8-acre) Tafawa Balewa Square, also known as the “Race Course.” It served as the ceremonial ground where Nigeria celebrated its independence on Oct. 1, 1960.
- The Nigerian External Telecommunication (NET) Building with about 160metres (520ft) and 32 floors. It used to be the tallest building in Nigeria and West Africa. Located at No.15 Marina road, the building was completed in 1979 and popularly known as NITEL or NECOM.
Gbajabiamila maintained that these projects manifest the government’s excesses and failure to effectively plan and execute, which have hampered Nigeria’s growth and development.
More unfortunate is the reality that many Federal Government agencies do not have permanent offices to house their staff. Many of them use rented offices. However, with proper planning and renovation, the Federal Government could save money by ensuring that most of its agencies move to the abandoned buildings.
Despite all the efforts injected into the real estate industry, the available property units have never neared the demand rate.
Most Nigerians are responsible for the unplanned and unprofessional construction of their homes, offices, and other building structures, accounting for a majority of houses currently in existence. The reason is linked to the continued mismanagement of housing and mortgage Finance.
What is the way out?
Access to funds and a good development plan is vital for any nation that desires to achieve an effective housing delivery. Nigeria needs an impelling housing development and financing delivery plan to achieve radical growth in the present-day housing situation.
The government must seriously complete or renovate and put all abandoned structures to optimum use. This will help in no small measure to ease the scramble for and stress on privately owned properties. The government must also continue seeking innovative ways to support and help develop the real estate sector. Such a conscious effort will serve as a needed jab to economic growth and better living standards.
The Nigerian real estate sector remains an untapped mine that wealthy individuals, private organisations, and businesses should not neglect.
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