Government should abolish the land use act of 1978 and also, it is not sustainable for government to be providers of housing for citizens. This and more was said by Real estate developer and the Managing Director of Merrybells Ltd, Emmanuel Abisoye Oyelowo in an interview with Amina Alhassn Ahman of Leadershipng. Oyelowo was one- time General Secretary of Real Estate Developers Association of Nigeria (REDAN).
Read Excerpts below:
Federal government and affordable housing
First of all, government should provide an enabling environment for genuine real estate operators. There is the need to review the land tenure issue and land certificate. In fact, I would advise that government should abolish the Land Use Act of I978. The constitution says that you can only do acquisition of land for an overriding purpose such as public hospitals, schools and such other general interest infrastructure. You don’t just acquire people’s land just for the fun of it. In addition, government needs to capitalise the mortgage banks so that they can discharge their duties of supporting housing needs of people.
Real estate industry over time
With the exception of the United Kingdom that decided through deliberate policies to have social housing, it is not sustainable for government to be providers of housing for citizens. However, government can help by serving as support base for real estate players to stand on. Globally, the organised private sector is allowed to provide housing for the people. What government does is to put in place policy frame works upon which the sector operates. Chief Olusegun Obasanjo during his tenure actually did a lot to offer support in this area.
He actually spearheaded the establishment of REDAN because he knew how much of Nigeria’s resources had gone into mass housing schemes during his first tenure. And during his second coming, he met nothing on ground to justify the huge spending by successive government to provide mass housing but the monies ended up in private pockets. The few that they were able to construct are right now in a sorry state so he set up what we call the EDL (Estate Development Loan) that could be accessed by genuine estate developers who belong to REDAN with certification. You could approach the Federal Mortgage Bank for a loan given that you have a titled land for the EDL to develop mass housing.
The bank gives this loan at a very low interest rate with moratorium and a reasonable time frame to pay back. To prevent private individuals with social influence here and there from hijacking the facility, the former president insisted that the money would not be accessed directly but through Primary Mortgage Institutions (PMI) that will work with the requesting real estate group, to ensure that they have what it takes to receive a loan and invest them in areas of focus, and of course be able to pay back when due. So the loan is not released by the FMB to individuals, but to the PMIs. This was a huge success. The PMIs ensure that we draw down but under close supervision.READ ALSO – The Benefits Of Knowing The Title On A Land
I believe that that initiative worked well at the time and it can still work again, provided we insist on strict adherence to the rules of engagement in the process. We don’t lack laws in Nigeria, what we need is proper implementation.
There are also some multilateral agencies all over the world working side by side the World Bank and other institutions to make sure housing is delivered to as many as need them. There is Shelter Afrique, Operation Habitat, and many more who can give out loans of up to hundred million dollars per time at about I.5% interest rate. That is an amazing offer we can take advantage of to build houses for our people. Some of them have ten years moratorium and up to 20 or 30 years repayment time frame. These are great opportunities government can support serious developers to take advantage of.Full interview here