Chief executive officer of Abuja International Housing Show, Festus Adebayo, in this interview with Daily Sun, disclosed how real estate developers launder money. He also identified insecurity as one of the major hiccups bedeviling the housing sector. Adebayo said the event, which has spanned over 15 years, consistently tries to proffer solutions to housing deficit in Nigeria. According to him, the 16th edition of the housing show will hold between July 25 and 28, 2022.
As one of the experts in the housing sector, how has your annual show helped in solving challenges in the housing sector?
The Abuja International Housing Show has now been changed to the Africa International Housing Show due to the achievements the sector has made in the last 15 years. The platform has been the largest in Africa, where local and international experts in housing have been meeting, networking, interacting and exchanging ideas. It has also been used by many manufacturers of building materials to showcase their technological and innovative housing ideas and designs, with the latest trends. I can tell you here that, after 15 years of the show, we have added so much value to the sector; through the platform, we have established housing development programmes on different television stations in Nigeria for the weekly running of advocacy, sensitization of public and private on the need to put housing as a priority.
This awareness has reached every nook and cranny of Africa to keep people abreast of the role housing plays in the socio-economic development of any country. Having said that, I can confidently tell you that there has been a lot of response that we can tag as achievements and success stories. Many states of the federation now have ministries that have to do with housing.
For instance, the Governor of Anambra State has a full-fledged ministry that is specifically devoted to housing. This is part of the campaign that we are bringing; even when he was the CBN governor, showcasing to him that, with housing, the economy of the country can be turned around with the multiplayer effect that housing has. When you are building one unit of a house, perhaps, a three-bedroom, according to Okonjo-Iweala, it will engage nothing less than 13 different categories of people, including the skilled and unskilled, the electrical engineer, structural engineer, etc. And in the area of the unskilled, the carpenter, bricklayer, and, in fact, those who are selling food at the site, and the transport people, will also benefit from such a project. That is why it is argued that, with housing, everyone is a potent beneficiary. In one way or the other, housing is the way to go! Once government wants to create employment, housing is the way to go, relying on its huge effect.
Talking about the Abuja International Housing Show, we have succeeded in influencing government policies and actions in various states, development control, and issuing approval processes, all geared at ensuring affordable housing for Nigerians. In recent times, the number of affordable houses has increased, and, in fact, we have contributed to the establishment of family homes funds, which today are mandated to provide housing for Nigerians below the income ladder. We are interacting with the National Assembly on various bills. We have the Real Estate Development Bill in which we believe in the idea of regulating the sector. We have also been raising the alarm on real estate scams, which some people use for money laundering.
Through AIHS, many housing advocates have emerged, championing housing development cause across the country. Indeed, we have done much but we still have more to be done. We will not stop in advocating affordable housing until we see it as the easiest asset every graduate can get. We will not stop until we see the incremental number of job opportunities that the sector is creating. As I speak, the real estate sector is not contributing beyond 4 per cent of the nation’s gross domestic product (GDP), whereas, in advanced countries, real estate is contributing over 70 per cent. That’s why our battle here has just started. We have to do everything possible to ensure that the incoming government in 2023 puts more priority on affordable housing.
Considering the low budgetary allocation for housing, if you were to set an agenda for the next set of governors and President in housing, what would that be?
If I were to set an agenda for the incoming government, it would be that government should provide an enabling environment, which invariably means that government should make land access easy. The incoming National Assembly should revisit the Land Use Act to make access to certificate of occupancy easy, which is now under the authority of the concurrent list, which the governors oversee. Some governors, throughout their four/eight years in office, did not sign up to 50 C-of-Os. That is why many of the assets in Nigeria are dead capital. Many projects in Abuja and Lagos are dead capital because they do not have C-of-Os.
On that note, the first agenda for whoever takes over the mantle in 2023 is to review the Land Use Act and to also boost private sector participation in real estate development in Nigeria. Also, continuous involvement of government in construction is like increasing the level of corruption in the housing sector. The Federal Housing Authority and not the Federal Ministry of Works and Housing should be in charge of construction of mass housing and the same thing should be applicable to the 36 states. The building of houses is not the business of the ministry of housing but rather to formulate policies and create enabling environment that will attract investors into the country. You can see what is going on in Lagos, Eko Atlantic. They gave them land on which America is going to build the largest embassy, simply because they have the enabling environment. Away from that, many of the houses government builds are in wrong locations outside the jurisdiction of the people they acclaim they are building for, even with exorbitant prices.
That is why we can tell you that government should not get involved in direct construction, considering the experience under this current regime where the smallest unit of one bedroom is sold for N7.2 million. This shows that they do not understand the language. They should rather provide access to land and needed infrastructure. They should also provide a conducive atmosphere for the mortgage system to thrive so that the issue of housing would not be ‘cash-and-carry’. Beyond that, there must be a regulatory agency. We cannot continue to fold our hands while a lot of Nigerians from the diaspora are falling victim to real estate scams.
How do real estate developers use real estate to do money laundering?
The method is that when the money has been stolen, they do not keep it in the bank but go straight away to invest it in different things, and all that you see is that you see those houses coming up from nowhere. Once the buildings are completed, they will not even want to sell them. That is when you see them placing ambiguous prices on the structures to scare people away. They are only tying down the money. There are not seen as capital but as a property. Now that we are going into 2023, I can tell you here that the supply side of housing will be increased because they want to sell those properties to get money in preparation for elections. In addressing that, there are laws in the country that have to do with money laundering. Unfortunately, the laws are not implemented. Nigeria is not short of laws; we have a lot of laws but we lack effective implementation framework. Even without real estate regulation, there are money laundering laws that can help tackle those fraudulent acts but nobody is interested.
So, coming up with the so-called regulation is like creating another avenue for some set of people to make some money through the regulation. In essence, we are not short of laws. We have enough laws that govern the sector and deal with the transactions of real estate. If there is any law we don’t have, I can tell you that it has to do with the foreclosure bill. And what is the foreclosure bill? Foreclosure has to do with a mortgage that, when you buy a property and I create a mortgage for you, no law protects me as a mortgage bank. All our laws have a lacuna. The lacunas are there for anybody to use, and our lawyers are very good at that. The best lawyer is the one that understands the best tactics.
How can we determine Nigeria’s housing deficit?
When the honourable minister challenged me, I expected him to, as a matter of exigency, provide us with the truth. Now that he has discovered a lie, at least, he should avail Nigerians of the truth. To me, I just see it as propaganda. Most of the things that the minister has condemned are exactly what he has been supporting. For instance, selling a one-bedroom unit for N7.2 million. Who will buy such an exorbitant house in Ekiti, for instance? Meanwhile, going back to the issue of data, Prof. Akin Mabogunje, who was the president, Technical Committee on Housing, when we started this democracy in 1999, gave us the fact about the deficit as 80 million and they gave the figures from the figure of the world. And if Fashola is telling us today that he does not know Nigeria’s housing deficit, I do not believe him. By the way, with the annual reproduction rate in the country and graduates produced yearly, coupled with the number of houses built in a year, he should be able to get answers to his question.
Funny enough, after spending eight years in office, they cannot provide 5,000 houses. The Vice-President, Yemi Osinbajo, recently said Nigeria is reproducing to the tune of 50,000,000, saying that is the population of Liberia. So, Nigeria is increasing and producing a whole country annually and someone will now tell us there is no housing deficit. Go to the suburbs and understand what I’m saying. People are not living in line with the standard of living as stated by the United Nations. People live in a house that there is no electricity and water. In a nutshell, the way forward for housing data is that the National Population Commission said it is going to do housing population census this year, let us have the figures they want to give to us. What I expected the ministry of housing to do is to involve the World Bank, National Bureau of Statistics (NBS) and the CBN and finance housing data. We have a lot of professionals and brilliant young people in Nigeria who can conduct this exercise and bury this controversy over the housing deficit. If Nigeria is about 200 million population, nobody would tell me that (deficit) is not above 21 million.
As it stands, many Nigerians cannot purchase a house upfront. How do we solve the mortgage crisis?
It is all about the political will of the government. If government picks interest in it, then there would be a difference. The mortgage sector will not do well until government has the political will to make it work. When the government is ready, it will tell the CBN what is to be done. They promised N200 million as intervention to housing, following the COVID-19 saga. How much if this money has been released to the sector? For you to own a house through mortgage, does the mortgage have the resources? Of course, it does not have. Are you aware that the number of mortgage banks that were in existence last year has reduced? There is no effective mortgage system where there is no law guiding the business.
Are you also aware that no investor comes to Nigeria without first looking at the security? Someone told me that, in Kaduna, two housing projects under construction, the contractors in the first one got kidnapped while those in the second estate ran for their lives. Now tell me, who wants to go to such an environment and invest in mortgage or real estate? So, the first issue to address is insecurity.
Factoring all of these, how does it form what you should expect from the political discourse you intend to facilitate that will involve political actors ahead of the 2023 elections?
For the mortgage sector to be effective, the political class must be interested in it and provide necessary infrastructures. Also, for people to have access to land, the need for the political class to be interested in that idea cannot be overemphasized. If you go abroad, you will know what we are talking about. Compare their productivity to ours, there is a huge difference. There is a law in Nigeria that, when you employ 500 staff, you must provide for their accommodation; but nobody is obeying the law. There is a law in Nigeria that says there is a percentage of the profit after tax of the banks that should go into housing funds, but nobody is obeying it. The central bank is not interested in implementing it.
To solve all these problems that we have listed, we need to have an interaction with political leaders. And on that note, we have decided that, come July 25, 2022, at the International Conference Centre, day one of the 16th Africa International Housing Show, it shall be a parley between political leaders and professionals. When I say professionals, it cuts across all areas of the housing industry. Those who believe in affordable housing, are engineers, architects, and a host of others. The question is always, If you want us to be involved in housing, what are the benefits? The benefits are very clear. Housing is the largest creator of employment all over the world.
Source : The Sun