Festus Adebayo, the convener of the flagship Abuja International Housing Show (AIHS), is the Executive Director, Housing Development Advocacy Network (HDAN), and Managing Director of Fesadeb Communications. In this Interview with DAYO AYEYEMI, he speaks on some of the issues confronting affordable housing and mortgage, pending housing related bills at the National Assembly, need for recapitalising FMBN, among other issues
How would you describe the Nigerian housing and mortgage sectors?
The Nigerian housing and mortgage sectors are in need of serious interventions. There is an urgent need for a new thinking in the sector. We currently have over 20 million worth of housing deficit to deal with.
Access to affordable housing for the poor seems like an impossible dream, except for what some institutions like Family Homes Funds are doing. But for us to fix our housing problem we need about 100 more of Family Homes Funds (FHF).
The sector is supposed to be contributing significantly to Nigeria’s Gross Domestic Product (GDP), but that isn’t the case right now. So it is clear to everyone that we have a real task at hand.
There is so much potential in our housing and mortgage sectors. We just need the political will to get things done.
As an affordable housing advocate, what are the factors militating against affordable housing in Nigeria?
The factors are so many. But one of them includes the lack of strong political will to deliver on set targets. We know the economy is struggling and funds are hard to come by, but the little funds we have are not even being well managed. If funds are used appropriately for what they are meant for, then we can begin to measure our progress.
So the lack of political will to achieve what is necessary has been a major setback for affordable housing production in Nigeria. We also have the problem of stakeholders working in silos. We are not collaborating enough. The only way to solve our housing problem is for stakeholders to pool together, exchange ideas and work together on projects. One person cannot do it all. Strategic collaboration is very important.
We also have the issue of developers focusing on luxury housing. But there is enough market for affordable housing.
The focus on luxury housing is why we have so many empty houses in most high end areas of our major cities.
Meanwhile, the majority of our people have to put up in slums and shanties where the standard of living is appalling. With a good arrangement and collaboration with housing corporations, developers can identify the kind of houses that are affordable and can be built for millions of off-takers. If everybody wants to build for Dangote, who is going to build for the civil servants, the plumbers and farmers?
There is also the issue of high interest rates. I believe the CBN is currently working something out, but it has to be as urgent as possible. The current interest rates are too high. This will always make affordable housing impossibility. We need a single digit interest rate in Nigeria.
This is possible, especially because housing is a critical sector that requires special government interventions. Also, this will make the environment friendlier for interested investors. There are other problems like the lack of data, finance and regulation. We can spend a whole day listing the problems but we just need those in positions of authority to become more responsible and live up to their duties today.
There are some housing related bills pending at the National Assembly. What is HDAN doing to draw the attention of lawmakers for speedy passage of these bills into laws?
The Housing Development Advocacy Network (HDAN) has been engaging with the National Assembly, especially the Senate Committee on Housing chaired by Senator Sam Egwu for over a year now. The group is made up of housing and finance professionals, who are passionate about collaboration and the development of housing in Nigeria.
As an advocacy group, we have been doing our best in drawing the attention of lawmakers to these bills. Apart from the promotions we do in the media to draw their attention to these bills, we have been engaging physically with them through meetings and events. So on our part, we are doing everything possible to see to the passage of these important bills.
What are the importance of these bills to afford-able houses and mortgage?
Their importance is enormous. Take the Land Use Act for example. Its review will reshape the current land regime or tenure in Nigeria. It will make access to land easier for people, especially private sector developers. Even the Federal Government will be able to intervene more when it can access more land in states across the federation. We need a very flexible land system, something different from the current rigid system.
We are also currently advocating for the passage of the Model Mortgage Foreclosure Law in all states of the federation. We are happy that a few states have already passed while some are either deliberating or it or in the process of passing it into law.
The passage of this bill will greatly improve the mortgage sector as we have it today. It will motivate a lot of investors and developers to come in. Typically, most investors are scared of going into places where there are no enabling laws for their business.
So the passage of this law and many others will greatly inspire more development. We are also canvassing for the passage of the bill that will enable the establishment of a supra regulating institution in the housing sector. With the existence of such institution, we will be able to address problems like unprofessionalism, scam and corruption.
The bills are many and their passage will definitely contribute to ongoing efforts to improve the sector.
Why do you believe FMBN should be recapitalised to the tune of N500billion?
I am actually in favor of the recapitalisation of the Federal Mortgage Bank of Nigeria (FMBN). The recapitalisation will bolster the bank and enable it do much more than it is currently doing. There is nothing wrong with recapitalization, and there is no need to be against it.
How can cost of erecting houses be reduced?
To reduce the cost of housing we need to do a number of things. I have already mentioned some of them. We need to reduce the current interest rate to a single digit. We need stakeholders to collaborate more. It will be cheaper for two people to build a house than for one person to build it. So if we have more stakeholders working together, we can have more affordable houses. We need to rely more on local materials.
Family Homes Funds for example is currently partnering with the local industry to produce more local building materials. But generally, the government needs to support this local industry to produce more building materials. This will greatly reduce the cost of importation and transportation.
We need to be self-reliant in this regard. We need local ideas to solve local problems. And that is where innovation comes in. And that is why the theme of AIHS we held in July focused on innovative ways to finance housing development. Reducing the cost of housing will take a combination policies, decisions and actions. Government needs to match words with action. Their will should be unrelenting.
They should make it easier for the private sector to come in through a Public-Private Partnership (PPP) program. The government cannot do it alone, and shouldn’t even in any way be involved in direct construction. It is the responsibility of the private sector to build, while the government provides an enabling environment for that to happen.