Convinced of the strategic importance and potentials of building and construction sector as the third largest in terms of gross domestic product (GDP), ranking in Lagos, the state government has come up with new initiative that is geared towards boosting activities within the sector in the state.
Essentially, two major areas are currently receiving attention, namely; housing and construction sector.
Highlighting the new initiative at the launching of Lagos Development Plans recently, Commissioner for Economic Planning and Budget, Mr. Ben Akabueze, stated that the hybrid approach seeks to encourage different types of building operations such as the involvement of direct labour, contractor-financed project implementation; and private sector participation schemes.
The commissioner noted that the hybrid initiative has helped in the development of housing and real estate sector in Lagos State.
“Housing and Real Estate sector in Lagos State is highly active and involves a significant degree of participation from both the government and private sector companies.
“To ensure that greater result is achieved, government, through the Lagos State Ministry of Housing, has identified more than 50 sites for housing purposes in the recent years”, said Akabueze.
According to him, the state government through the Lagos State Development and Property Corporation (LSDPC) has to date delivered more than 20,000 housing units in several housing schemes across the state, while the Ministry of Housing has added more than 5,000 housing units to the housing stock of Lagos since 1999.
The State Government has also issued Certificates of Occupancy in respect of all housing estates owned by her agencies. This has made the grant of subleases to homeowners seamless and helped to empower homeowners.
“Besides, Lagos government has adopted a hybrid strategy as part of its pragmatic approach to development of housing in the state. This strategy consists not only of direct government construction for the underprivileged but also schemes targeted at the middle and upper class where agencies like the LSDPC will build and sell and the profit will be used by government to fund social housing for the vulnerable members of our society”, he stated, adding that currently, the State’s Tender Board has awarded contracts for the execution of 156 projects, out of which 74 are direct housing projects and the rest being housing infrastructure related.
He listed the projects to include 41 housing projects at Alimosho, 61 blocks of houses in Ikeja, two (2) blocks in Agbowa, three (3) blocks in Surulere and 12 blocks in Ogba to be delivered in 12 months. These will together yield 1032 flats comprising 1, 2 and 3 bedrooms across the state that we will be delivering on mortgage finance basis.
The hybrid approach seeks to encourage different types of building operations such as the involvement of direct labour, contractor-financed project implementation; and private sector participation schemes (this includes the Ewu-Elepe scheme, Gbagada II scheme and Ikeja II scheme).
Stressing the importance of land issue in the context of this sector, the management of land through efficient titling, revenue collection, acquiring land and making appropriate state land available for development are crucial underpinnings of this sector.
He stated that recent improvements to systems and to the transparency of operations have assisted in making land, certificates of occupancy and freehold title more accurate and readily available, adding that the income generated by the Lands Bureau through its various land leases, taxes and issuing of certificates makes a significant contribution to the State’s Internally Generated Revenue (IGR).
Speaking on the prospects for housing and construction industry in the state, Governor Babatunde Fashola, earlier stated that its likelihood to be a major growth sector in the coming period is not in doubt.
“There exists a large pent up need and demand for new housing of all kinds and as resources for new infrastructures are levered into play the construction of facilities will require significant efforts by the sector.
Housing delivery requires a lot of efforts and resources, with many obstacles to meeting the need. From the perspective of the private potential buyer the key need is to make available cheaper mortgages. This in turn requires a national effort to reduce inflation and bring down bank lending rates”, said Fashola, adding that government has introduced several important initiatives to encourage greater home ownership and this will, in turn, encourage greater activity in the housing market.
There is no one clear solution to the housing issue, as the state has recognized.
Currently, officials stated that spending on housing and community amenities, which also includes Physical Planning and the production of master plans, is N43.812 billion. This covers the capital costs of current house building at five sites in Lagos.
In the SMF exercise in 2008 it was calculated that 97 per cent of expenditure on the Land and Housing area would need to come from the private sector. At that time this was estimated to be N900 billion by 2020. In today’s values and extended to 2025 this total is likely to be well several trillion naira.
It was also revealed that this reflects the fact that not only is the city of Lagos expanding at a rapid rate but there has and continues to be major infrastructure projects. Among these has been a continuing programme of road and rail improvement, the major reclamation scheme on the Atlantic waterfront, the improvements to port facilities and the major works associated with the Lekki Free Trade area.
This industry, said officials, provides considerable employment to both skilled and unskilled and is likely to continue to be important in the future.
“A key component of the building and construction sector is housing. The housing market is a crucial element of the Lagos economy and housing need is critical component of social wellbeing”.
This item originally appeared on Guardian news