In this interview with JOSEPHINE OGUNDEJI, the Chief Executive Officer, Gtext Global, Dr. Stephen Akintayo, who is also a member of the Forbes Business Council, speaks on the challenges facing the real estate industry, among other issues
How would you describe the current state of the real estate sector?
The current state of real estate is down and challenging. However, what most investors do not know is that this is the best time to buy real estate in Nigeria. It is crucial to know that it is in the down market that you buy, and it is in the up market that you sell. Even though the economy has been tough, real estate has been the saving grace of the economy.
With Nigeria battling inflation at the moment, would you say the real estate industry provides an ample window of opportunity for potential investors right now?
I think real estate is the only hedge against inflation. We saw what happened to those who went into cryptocurrency, and how the capital market is almost dead. So, the last hope to hedge against inflation is real estate. It is, however, important to know how to buy. Most people in Africa buy estates based on emotions, sentiments, religion, and tribalism. Knowledge is very crucial to know the exact areas that offer the highest level of investments. So, your goal should be buying at the right location, and for you to have the right location, you need to have the right professionals guiding you. Training and mentorship are very important as well. It is advisable to not rush into something you are not knowledgeable about. So, get people who are more successful in the real estate sector to ensure that you are buying the right property.
There have been concerns about real estate scams in Nigeria. How can this be curbed?
Well, anything that is genuine can also be counterfeited; it is just the way it works. The reason the scams are rising higher in recent times is just because of the economic situation. Most people really cannot afford genuine real estate. I was doing an interview yesterday and someone asked how someone earning N200,000 would buy real estate. And, unfortunately, we do not even have any project that can cater to such a person. You and I know that in the economy of Nigeria today, earning N200, 000 is decent. People are forced to fall into the hands of scammers who promise land after N20, 000 – N50, 000 installment payments and end up not delivering. So, fraudsters can play into economic situations, particularly with the fact that people want to invest and their income is not that stable. So, if anybody is able to show them a pathway, they will rush to those people, even though in many cases the companies end up not delivering, not because they are being wicked but because property is very expensive in Nigeria.
Also, dabbling into the issue of a certificate of occupancy has created these issues as well. However, another way is education, particularly enhancing awareness and training. In the aspect of regulation, it is imperative as there should be standards before going into real estate. It should not be something everybody just jumps into.
Gtex has a vision of building 200 estates between now and 2035. How do you plan to achieve this?
For us, we are moving at our pace so that we do not lose our place. We have spent the last six to seven years buying land, acquiring as much land as we can and making sure they are the right land, so that even if nothing is built on them yet, the value still appreciates.
We want a situation where in the next five to 10 years, what we can make from just selling those lands will be ridiculous. Second is attracting investors. This is the reason we have spent years attracting and keeping a good name so that we are able to attract investors from the Diaspora who trust the brand and have followed us over the years. We have been consistent on this. Hence, integrity enables us to attract private investors. Lastly, to attract international investors, however, we know that that will come at the later part of our project, and when the economy is a lot more stable. At the moment, we are working on private investors, keeping a good name, and aggressively marketing the properties we sell to attract investors, particularly those in the Diaspora who can afford it. We do not want to compromise on quality just because we want to sell at cheaper rates. For us, we are taking it one at a time, which is why we are not building the regular kind of houses. These houses will be relevant 200 years from now in terms of green energy, recycling bio-gas for energy, and solar energy.
You are known as one of the most influential investment coaches in Nigeria and have authored over 37 books. What can you say is the major challenge of the Nigerian economy?
Honestly, the Nigerian economy is not supposed to have any challenge because we have the right soil, a huge population and labour. Dubai is constantly using concept strategies to attract labour. However, in Nigeria, the reverse is the case as we have good land that we can farm and make money from, but we do not have the right leadership. Our problem in Nigeria has always been leadership, starting from the family unit. Growing up as poor kids, we were taught contentment. You cannot steal as a child despite that you barely had three square meals a day. So, leadership from the family unit has failed, and parents are not taking time to teach their kids, and some even encourage crime and illegalities. Leadership has failed, not just in Africa, but also in Nigeria. This is where we need to get started, particularly in inculcating the right values.
Wealth should be obtained through the right means. People should and work for it, as success is sweet when you legitimately work for it. What is also affecting our economy is the fact that we are putting politicians instead of technocrats in places of power. Even when we put technocrats and they don’t perform, there are no consequences for bad behaviour. However, change is close. Once we can put the right people in the right place and hold them accountable, we will start seeing the needed change.
What’s your take on the CBN’s plan to introduce new naira notes in December?
This is the wisest decision they have ever made. They should have done this way before now. You cannot have over N2.3tn outside the banking system, meaning people are stacking money up, probably for the coming elections or other reasons. That doesn’t make sense. The money is needed to be in the banking system. We have too much money out there, which has been wasting away. However, I hope the policy works and we are able to get at least N2tn back into the banking sector. You cannot have a great economy where the bulk of the money has been buried in graves. So, it is a good one, and I hope it is well-managed, which would in turn go a long way in resolving even the dollar-naira crises.
What are your thoughts on the Nigerian Building Code and the Land Use Act repeal being emphasised in the industry today?
The building code is not the reason for building collapses. Buildings are collapsing because we do not have enough trained experts, consultants, and an informal way to train people to become excellent. Our so-called certification institutes run based on theory, not practical. The Land Use Act of 1978, for me, is outdated and should be scrapped because it is part of why real estate is expensive. Every land is owned by a family and not the government. The concept is that the government is entitled to acquire lands owned by ancestral fathers of a particular family and passed onto them.
Those portions of land are being taken by the government. They do not even plan to build schools or hospitals, and even if they do, they take more than they should take and begin to allot to their cronies. This is part of what is leading to issues, as people have to pay twice, both to the native families and the government. This is outdated, and families own their land and give out the C of O to every land. Once you give out the C of O, it means families can unlock the wealth on their land, and they can take a loan to start a family on it or build residential or commercial projects on it, thereby generating revenues and birthing a thriving economy. The economy will be unlocked when the Land Use Act is repealed, as it creates a lot of problems.
There is still untapped potential in the real estate industry. What can you say to young people who desire a career in this sector?
For young people, they should start small, think big and grow fast. I did not start as a real estate developer, but as a real estate broker, selling for other companies. Also, I did not eat with five fingers, I was learning and under mentorship. Life is in phases. Start at your level, life is in phases and men are in sizes. Know your size per time. If you jump up, you will go down, but if you grow up, you will stay up. So, take it easy, because there is a process that does not just happen overnight. I was sharing with some of our staff in Dubai, telling them that as lucky as some people think I am, 14 years have gone into this and if anyone removes 14 years from their lives, they know what it is. Even 14 years later, those in the system know how we are still pushing every day.