Category: Property

Operators in the construction sector have decried the increase in electricity tariffs and fuel prices. The increase, according to them, are inimical to the recovery of the sector. With the lingering negative impact of the COVID-19 pandemic and other policy changes, they believe that increased costs may worsen the industry’s situation, OKWY IROEGBU-CHIKEZIE reports

The recent increase in electricity tariffs, pump prices of premium motor spirit, otherwise known as petrol, and the previous policies on stamp duty and other related costs may lead to further slowdown in the construction industry. With the purchasing power of the average Nigerian already diminished by the effects of the COVID-19 pandemic, higher cost of construction may be a disincentive to customers.

Operators say increased costs will affect construction and real estate sector as the purchasing power of people have become very low due to job losses, reduction in salaries and economic slowdown occasioned by the twin-shocks of global crude oil decline and COVID-19.

President, Nigeria Institute of Building (NIOB), Kunle Awobodu, said while the government might have its reasons for the increase in electricity tariffs and the prices of premium motor spirit due to the need for appropriate pricing based on market forces, NIOB could not but note the unintended effects of such increases on the construction industry that produces housing and other infrastructure stock.

He noted that the industry engaged several actors, including professionals, artisans, and business outfits such as contractors, materials manufacturers, equipment manufacturers or leasing organisations, many of which are small and medium enterprises, the engine room of growth for the economy.

According to him, the use of the construction industry to grow national economies cannot be overemphasised.

“A cursory survey of some building materials’ manufacturers would reveal that many are closing shops on account of cost of production combined with the harrowing effect of the COVID-19 pandemic,” Awobodu said.

He cautioned that increasing energy costs would further suffocate few operators still surviving, adding that the  scenario would negatively impact housin stock.

He advised government and relevant stakeholders to stimulate an environment for the production of inputs such as doors, windows and other components for large housing projects.

Awobodu expressed fears that companies may not be able to meet demands as a result of their low capacities, noting that what the nation needed at this time was the ability to look inwards in line with government’s policy pronouncements and executive orders on local content.

“Bringing to fore the NIOB past market survey, a 50 kilogramme bag of cement rose from N1,600 to N2,000 and steel  reinforcement bars, locally manufactured TMT, from N135,000 to N140,000 due to hike in fuel prices from N65 to N120 per litre in 2012. The increase in fuel price from N120 to N145 in 2016 resulted in the rise of cement price to N2,300 per 50 kilogramme bag and steel bars to N180,000 per tonne. Just before the previous upward review of fuel price to about N151.56, a 50 kilogramme bag of cement sold for N2,600 while steel bar was N230,000 per tonne. Sadly, these two prominent building materials are being manufactured locally, thereby questioning the rationale behind backward integration and local content policies,” Awobodu said.

According to him, based on many surveys by the institute and operators accounts, hikes in fuel prices always led to increases in building materials’prices. Hence, it does not require anything extraordinary to predict inflation in the prices of building materials with the latest increase in fuel price.

“Invariably, workers who have been saving to relocate to their own houses will still have to tolerate their landlords for a long time to come as a result of various policy somersaults of government as far as low-cost housing programme is concerned,” Awobodu said. He cautioned that increasing electricity and petroleum costs will further drive up production, distribution and transportation costs while reducing both the disposable incomes and purchasing power of Nigerians.

He added that without appreciable construction activities, employment challenges will remain intractable.

He urged the government to reverse the recent increases as it will do the critical masses and Nigerian economy, especially the construction industry, good.

According to him, reduced costs of operations will lead to increased construction activities, to the benefit of the government and the citizenry.

An estate surveyor and valuer,  Biodun Olapade, also decried the increase in electricity tariffs and fuel prices, noting that the timing was wrong for a people struggling to cope with many shocks.

According to him, the untold hardship in the economy is biting harder because of the effects of  COVID-19 pandemic, which though affected all countries has been more telling on Nigerians who enjoy less impactful relief from the government.

He noted that rather than increasing costs, government could have provided more impactful reliefs through reduction of electricity tariff and grant of more subsidies on petroleum products.

He said the negative impact of the recent increase in costs would be borne more by Nigerians, especially the vulnerable segment of the population.

“Apart from the fact that it will make the government of the day unpopular, reversing the position will make life more impactful and better as a succor for all, especially majority of citizens who are not in the corridors of power or having political appointments or in the civil service with guaranteed income. The dividends of democracy to a common man are seen in things like less electricity tariff and pump price of fuel, “ Olapade said.

Past President of Association of Town Planning Consultants (ATOPCON), Moses Ogunleye said the increases would push up energy cost for families and homes.

“Generally, energy   is required to run homes from many angles.  For managers of estates, the service charge would have to go up.  Then the costs will be pushed over to renters or tenants.  So, every renter will be paying more in terms of rent. Owners of dwelling will also incur more cost to run homes.  Ultimately, costing of housing will also go up. For construction, energy is consumed in many ways – material production, construction process – these will also be affected. Construction cost will also go up although marginally,” Ogunleye said.

Past Chairman of Nigeria Institute of Quantity Surveyors (NIQS), Jide Oke, said the latest increase in the prices of electricity, fuel and introduction of stamp duty would greatly impact negatively on the construction sector.

“For a sector that is reeling under the devastating impact of the COVID-19, on account of its huge dependence on imported materials from China, Europe and Asian countries, the recent Federal Government increase is not only inauspicious but will cripple the sector. Since the COVID-19 time, prices of materials have been on the upswing because of scarcity of imported materials from the affected countries. And now with further increases, prices will jump much higher and this has commenced,” Oke said.

Adebola Adedeji, an engineer, said the increase would also affect the cost of importation of materials.

He lamented that policy makers did not take time to study the impact of policies before they make pronouncements.

“This increase will impact on the production cost and in the long run, construction companies may shed weight to stay afloat.  This government should be wary of what history will say about it. It’s an unkind cut on the majority of the people that do not have access to free cash like those in government,” Adedeji said.

The Nigeria Hydrological Services Agency’s flood prediction and the alarm by the Lagos State Ministry of Environment & Water Resources on the impending disaster next month in 28 states call for concern. OKWY IROEGBU–CHIKEZIE writes on efforts by the Federal and the states’ governments to tackle the perennial problem.

IT is a disaster waiting to happen. To avert the problem, the National Emergency Management Agency (NEMA), Director-General, Air Vice Marshal Muhammadu Muhammed (rtd.)   wrote a ‘Save Our Soul’ (SOS) letters to some governors, informing them of the 275 local government areas, including the Federal Capital Territory (FCT), that are flood risk areas.

Also, he has started stock-piling food and non-food items as part of measures to cushion the effects of the impending floods across the country. He has unveiled a booklet on ‘Disaster Risk Management Implication of the Seasonal Rainfall Prediction.’

The Nigeria Hydrological Services Agency (NIHSA) also warned of the imminent flooding. Its Director-General, Clement Nze, said: “The red alert points to imminent river flooding in Nigeria. Both the Kainji and Jebba dams have commenced spilling water downstream.

“This means that once the upper catchment of the basin gets flooded, Nigeria should be prepared to experience flooding incidents. This flood magnitude sighted in Niamey on August 23, 2020, is expected to arrive in Nigeria through Kebbi State around September 6, 2020.’’

Earlier, Lagos State Commissioner for the Environment, Tunji Bello who is familair with such matters, having held the portfolio in previous administrations, had warned of the impending heavy rains between September and October.

Bello, at a news conference, said  the data provided by the Nigerian Hydrological Services (NHS), indicated that “June is usually the period of effective rainfall and the beginning of a new hydrological year, when the River Niger Basin which covers nine countries -Benin, Burkina Fasso, Cameroon, Chad, Cote-D’Voire, Guinea, Mali, Niger and Nigeria overflows its banks.” He said July, August, September and October are also known as JOSA months, signifying heavy rainfall, flooding and flood disasters in most parts of the country.

He said the floods are often aggravated by the trans-boundary inflow of River Niger and Benue from outside the country before they empty into the Atlantic Ocean in Nigeria, adding that the Ogun-Osun River Basin Management had released five million cubic litres of water last month and between eight and 10 million cubic litres this month.

He said 18 million cubic litres would be released in September while 23 million cubic litres would be released in October, saying to check flooding, the state government introduced pumping stations in flooded areas, such as Isheri North and its environs, Owode, and Agboyi Ketu.The technology was also deployed in Illuburin and Adeniji Adele on Lagos Island, he said.

Bello called on residents of Kosofe, Ajegunle, Owode Oniri, Agiliti and Ketu to be alert to the release of 18 million cubic metres at Oyan Dam next month and 23 cubic metres in October, saying they should move to safer locations.

The commissioner added that the state had stepped up campaigns by producing jingles using Nollywood artistes for testimonials on why residents should desist from dumping refuse in drainages and erecting structures on drainage channels.

He continued: “Lagos is working on over 222 secondary channels, of which over 80 per cent are almost completed and 46 primary channels receiving attention.

“I am assuring residents of areas like Aguda, Shomolu, Surulere, Oworonskoki and Idi Oro who are complaining of neglect that the government is working; clearing of canals usually start from lower stream before reaching all the adjourning areas such as LUTH, Idi Araba and Ishaga.

“It is important to note that for coastal city like Lagos, once it rains consistently for a minimum of eight hours, we are bound to have flash flood caused by increasing inability of high rise of the Lagoon which brought about a rise of the ocean water.

“This constant rain will automatically lock up  our drainages and until the water level goes down, the drainages will be unable to discharge.

“Once our drainages have been cleaned or dredged, we can always assure you that in a matter of hours all the water will quickly disappear after the rain stops and tide begins to go down in the lagoon.”

Bello, however, urged residents  who dump refuse in drainage depite  enlightenments on its dangers to desist or face sanctions.

He continued: “Many people still dump their refuse in tertiary channels in front of their homes when it rains. People still build on the right of way of our channels despite repeated warnings. My admonition to such people is that what goes around must come round; the refuse they dump in the drainage channels will block the passage of flood water and cause flooding, which may eventually cost their life.”

Bello reiterated the state’s commitment to life and property, and sought the people’s cooperation.

He stated that henceforth, failure to desist from clogging the drains and channels with carcasses of motor vehicles and electronic parts in Ladipo market and other wastes from markets in Oshodi, Mushin and other markets would be punished.

Bello said the Lagos State Waste Management Authority (LAWMA) has stepped up its activities to clean the drains and ensure that wastes do not return to the roads or drainages.

In Ogun State, the government had ordered residents living along river channels to relocate to avoid the ravages of flood.

The state Commissioner for Environment, Abiodun Abudu-Balogun, who gave the order, said the government would pull down the houses of those who flouted the directive.

The downpour submerged buildings in Kuto, Isale-Igbein, Lanfewa, Amolaso, Ijeun-Titun, Ago-Ijesa, Abiola Way, Isale Abetu, Sokori, Igbore, Oke-Mosan, Isale Ake and Adigbe, among others.

He identified human activities such as indiscriminate dumping of refuse on waterways as responsible for the flooding.

 “As a government, we are going to take decisive steps to ensure that residents comply with environmental laws.

‘’We will ensure that corrections are made to forestall annual recurrence of this natural disaster. We have seen the extent of the damage done by the flooding. We will continue to dredge canals in the state to allow for free passage of water.

“The effect of human activities, that is building on waterways and indiscriminate dumping of refuse inside stream and rivers, are factors responsible for what we are seeing here. We can see the devastating effect that these have caused.”

But some residents who spoke to The Nation expressed apprehension on the September 6 date given  by the Nigerian Meterological Agency (NIMET) on the flooding in some border communities of the state. They recalled how they lost their life-savings in last year’s flooding in their communities.

A resident of Glory Estate ,Arepo in Obafemi Owode Local Government Area, Mrs Modupe   Adedoyin, said they had to relocate to safer places after losing their homes and belongings to the flood.

She regretted the position of the government and recalled how they were asked to come to Event Centre at OPIC in Kara area of the state to submit the inventory of their losses.

According to her, when they got there with the high expectation of finding succor to their near helpless position last year, to their amazement they met people sharing rice. She said: “Some of us lost houses, cars, electronics, chairs and other household items, but when we got to Kara we met some people sharing rice and our spirit just went damp. We couldn’t imagine that level of insensitivity by government. So, you can imagine our level of worry and desperation when heard of imminent flooding again this year. We are using this medium to appeal to government to do something urgent for residents, if not it would be double jeopardy with COVID-19 still around.”

Mrs Adedoyin recalled how her neigbour refunded his tenants their rent though they had stayed for over six months as a result of the loss they suffered.

Rogba Kunle, who lives in Magboro, another satellite town, recalled how he had to shore up the structural integrity of his house after the flooding by contracting an a civil engineer.

He said: “I am a landlord in Magboro but last year’s flooding dealt a heavy blow on my family as we had to relocate to my father -in-law’s house in Ogudu GRA. It was not a good experience the apparent insensitivity of government by asking residents to move to safer places is sad. It means that nothing has been done for a whole year by the government. Those of us that live in the border communities of Ogun State have not felt the impact of this government, we are totally neglected. To our mind it is as if we do not exist, the government seems to be paying attention only to the state capital. Our CDC’s are hoping that government will do the needful and save us from preventable losses this year.”

He recalled that his colleague who lived in Wawa was trapped in his house for over seven days  as a  result of the heavy flooding and could only go out by a boat. He recalled  that adults and children were swept away by the flood, especially a dealer in Arepo who reportedly lost his life to the flood.

By Okwy Iroegbu-Chikezie

 

Real Estate Developers Association of Nigeria (REDAN) has advised the Federal Government on how to make Economic Sustainability Plan (ESP) work.

In a statement, the President’s association, Alhaji Aliyu Oroji Wamakko, said the policy would not only assist local businesses but also boost job creation.

To make the programme successful, Vice President Yemi Osinbajo called on the private sector to take charge to ward off recession and poverty.

He underscored the fact that the government was not under any illusion that it could do this on its own. He therefore urged the private sector to own the project to make the economic recovery initiative a reality.

Wamakko commended the government’s initiative on housing under the ESP, adding  that the government, however, has an enormous task ahead and should, therefore, provide an enabling environment for a private sector-driven economy to thrive.

He said: “Housing should be private-sector driven through real estate developers who have the potential to deliver the much-needed houses timely across the nation. The government is not supposed to build houses directly, but rather should provide an enabling ground for real estate developers in doing that.’’

Read Also: ‘Why we support funding real estate through unitisation’

 

According to him, the ESP will eventually revitalise the country’s micro-economic indices and increase about 1.5 percent of the Gross Domestic Product (GDP).

He said REDAN had concluded plans to complement the governments’ efforts in bridging the huge housing deficit by the planned roll out of 77,400 housing units for low and medium-income earners.

Wammako explained that the planned 77,400 housing units were expected to create about 2.2 million direct jobs and advised government at all levels to assist developers by creating an enabling environment for them to deliver the housing units.

‘Housing should be private-sector driven through real estate developers to deliver the much-needed houses timely across the nation’

The government is not supposed to build houses directly, but rather should provide an enabling ground for real estate developers in doing that.’’

 

From Bassey Anthony, Uyo

 

The Federal Mortgage Bank (FMB) has urged local government workers as well as civil servants in Akwa Ibom State to obtain mortgage loans to enable them own their houses.

The branch Manager of FMBN, Mr. Efiok Umoren, made the appeal in Uyo at a   workshop for members of the Nigeria Union of Local Government Employees(NULGE) in the state.

The workshop with the theme: “Understanding the National Housing Fund(NHF) Products offered by the Bank”, was attended by a cross section of local government workers across the 31 council areas of the state.

Addressing participants at the event, Umoren expressed worry that workers in the state do not approach or apply for mortgage loans from the FMBN.

He urged members of NULGE in the state to avail themselves of various mortgage loans, adding that the 2.5 percent compulsory monthly deductions from their salaries qualify them to access loan facilities.

Umoren unfolded the various mortgage products, such as National Housing Fund loan, Home Renovation loan, NHF Construction loan and Rent to Own loan.

“The essence of the workshop is to enlighten members of NULGE about the various products offered by Federal Mortgage Bank.

“From our experience we have noticed that workers in the state are not coming forward to apply for mortgage loans. In fact, that is why we had to mount this workshop to enlighten them on what they should do.

“We are asking them to come and obtain these loans because they are available for them to become house owners. We need to enlighten them know how to access the loans.

“From their responses and my observations, it is like they are aware of the products but were afraid of coming forward to apply for the loans. However, i believe that after today’s workshop they start applying and obtaining the loans,” Umoren added.