Housing News

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South Africa’s First Ever Blockchain-Based Property Register Pilot

  • The pilot study area consists of almost 1 000 properties located in four sites in Makhaza, Khayelitsha

The Centre for Affordable Housing Finance in Africa (CAHF), research consultancy 71point4 and Seso Global have partnered to develop South Africa’s first blockchain-based property register.

The pilot study area consists of almost 1 000 properties located in four sites in Makhaza, Khayelitsha. All the properties are Government subsidised properties that have not yet been registered on Deeds Registry.

According to the CEO of Seso Global, a blockchain property registry company, Daniel Bloch, this will be the first working example of a blockchain-based property registry in South Africa.

Aside from creating an immutable record of who owns which house, the Seso platform facilitates and records transactions such as sales and transfers out of deceased estates and integrates with third parties who facilitate transactions, including mortgage lenders.

“For the time being, property owners will record these transactions at the Transaction Support Centre, a walk-in housing advice office created by CAHF and 71point4 located in the area. But over time, we will record transactions through the Seso app” says Bloch.

The benefit of the blockchain solution is that it allows the data to be stored in a decentralised, secure database that can be updated without any loss of historic data.

This means there is a secure, back-to-back record of all transactions that is completely tamper-poof. Eventually the vision would be to integrate this record into the Deeds Registry when other impediments to transfer have been removed.

South Africa has a serious titling problem. According to Kecia Rust, the CEO of CAHF, the government has built over three million RDP houses since democracy. But CAHF’s analysis of deeds office data indicates that only 1.9 million of these properties have been registered.

The National Department of Human Settlements, Water and Sanitation (NDHSWS) estimates that the title deed backlog for RDP properties built prior to 2014 currently stands at 511 752.

These properties were given to beneficiaries, but no title deeds were registered and handed over. At the same time, there is a backlog of 351 470 title deeds on newer properties.

Registering these properties so long after they were built and handed over to subsidy beneficiaries is an administratively complex task. In some cases, original subsidy beneficiaries are no longer living in the properties. Some beneficiaries might have passed away, some might have tenants in their properties while others have sold their houses informally.

“To create a register of property owners we first had to go door to door to find out who lives in each property and to establish how they came to be there” says Melzer, founder and lead consultant at 71point4. “We hired a team of 17 enumerators and trained them to collect information and capture supporting documents. Thankfully we can leverage smart phone to collect the data, but it still requires a significant effort. It took us two months to cover these areas.”

But the effort is well worth it. Properties in the area sell for over R200 000 informally – and would sell for more if they were listed on a trusted registry and were ‘bankable’.

This would enable buyers to obtain mortgage finance and create affordability. Without access to mortgages, buyers have to pay cash for a house, or use an expensive unsecured loan.

There are also significant benefits to the City of Cape Town of being able to access an accurate and up-to-date record of property ownership.

Without it, the City cannot collect revenue from households in the area who are not indigent nor can City departments facilitate building plan approvals.

Next steps

In many cases in the pilot areas, the original beneficiary is still living in the property. “We hope that these properties can be registered in the deeds registry within a few months, and we are working closely with the City of Cape Town to facilitate that” says Melzer.

“Where the beneficiary no longer lives in the property, we are in the process of tracing the beneficiary to confirm information we have gathered on who owns the property. We will also be working closely with the City on a resolution process where ownership is disputed.”

It will take some time before all the required information has been collected and validated. It will also take time for validated properties to be registered on the deeds registry.  In the meantime, we will enable property owners and occupants to keep those records up to date.

“We will also be using Seso’s platform to manage other client service requests that come to the Transaction Support Centre from all over Cape Town” says Rust. “These include helping clients to regularise informal sales and wind up deceased estates. Going forward, as the country moves towards an electronic deeds registry, we hope the lessons we have learned will provide valuable evidence to inform the development of accessible, secure, affordable and efficient mechanisms to facilitate property market transactions. This is important across the market, but particularly in entry level segments of the market where existing mechanisms are simply too costly”.

CAHF, Seso Global and 71point4 have a working agreement to extend this pilot into other areas and use cases.

There are hundreds of thousands of RDP properties around the country where no primary transfer has taken place. In addition, in many areas where title deeds were issued, property owners have transacted informally, which means there is no longer an accurate record of ownership at the deeds registry. Blockchain-based solutions can help there too.

Blockchain can also enable households who live in informal settlements and rural areas to record and maintain land records and secure their rights.

“We are very pleased with the pilot results. We think the solution we have developed is scalable, and replicable” says Bloch. That does not mean it is easy but, says Melzer “blockchain technology together the potential value we can unlock makes it worthwhile”.

Source: techeconomy

Investment to Make Africa a World Leader in Renewables

Johannesburg, South Africa — Africa, where close to half of its 1.2 billion people have access to electricity, is set to become a world leader in renewable energy. As global business and development leaders met in Johannesburg, South Africa, to attend the Africa Investment Forum (AIF), held Nov. 11 to 13, one of the key focuses of the deals being discussed was around sustainable, renewable energy.

Organised by the African Development Bank (AfDB) and its various partners, the forum is expected to see $67 billion in deals closed over the next few days.

Leaders are doing all they can to encourage investment

In attendance where heads of state from South Africa, Ghana, Rwanda and Mozambique. At an invitation-only discussion among the leaders, Rwanda’s President Paul Kagame said there was a lot of progress in Africa as a whole.

“I have always thought it was Africa’s time. We African’s have let ourselves down, we are now realising it has always been our time. And we are now seize every opportunity and be where we should be by now,” Kagame said.

Kagame was the driver of the African Continental Free Trade Agreement (AfCFTA) during his time as chair of the African Union in 2018. The agreement had not been in existence during the first AIF last year.

Established in March 2019, the AfCFTA has now been signed by 54 of the 55 African member states.

Alain Ebobisse, CEO of Africa 50, the Pan-African infrastructure investment platform capitalised by the AfDB, said that there was a consensus from African leaders that they needed to do whatever they could to attract more private investment. He said that the AIF attendance showed that there was a changing narrative for investment on the continent.

Earlier figures had been revealed by the South African premier of Gauteng Province, David Makhura, that over 2,000 delegates were in attendance from 109 countries. Of this, only 40 percent where from Africa with the majority of investors attending from Asia, Europe and the Americas.

Gauteng is South Africa’s wealthiest province and includes the financial centres of Johannesburg and Sandton, as well as the seat of government in Pretoria.

Renewable energy on a positive trajectory

Ebobisse said that a lot was already happening on the continent and while the media focused on the challenges there were huge success stories too — like the 1.5 GW Benban Solar Park in Egypt, which is the world’s largest solar photovoltaic plant.

“I’m sure that people are not talking enough about this major achievement which is the Benban Solar Programmer, 1.5 GW of solar that was invested mostly by the private sector in a record time,” he said.

Africa 50 invested in 400 MW in that project and completed it from design to commercial operations in two and a half years.

Ebobisse went on to highlight Kenya’s opening this July of the Lake Turkana Wind Power project, which at a generation capacity of 300 MW makes it the largest wind power project on the continent.

“It was funded by the private sector,” Ebobisse told the media. He also looked towards Senegal which was implementing many independent power producers or IPPs in the solar sector.

“So there is a lot that is happening. We need to also widely understand the challenges and understand what is happening on the ground. And people are actually making good money in this investment. And there is nothing wrong about that. Let’s celebrate those successes,” he said.

Making Africa a world leader in renewables

A few weeks ago, the Governors of the AfDB met in Cote d’Ivoire’s capital Abidjan, approving a historic $115 billion increase to the bank’s authorised capital base to $208 billion. “This is the highest capital increase in the history of the bank since its establishment in 1964,” AfDB president Akinwumi Adesina said today.

During the October announcement Adesina had said that a significant portion of funding would be invested in climate change.

Today, in response to a question from IPS, Adesina further explained that the bank had doubled its investment in climate finance from $12 billion to $25 billion by 2020.

“Almost 50 percent of our finance will be going to climate adaptation as opposed to climate mitigation. So we are the first multilateral development bank to actually reach that balance in terms of adaptation and mitigation,” he said.

Climate mitigation is the actions taken to reduce or curb greenhouse gases, thereby addressing the causes of climate change to prevent future warming. However, climate adaptation addresses how to live with the impacts of climate change.

“I believe that coal is the past. I believe that renewable energy is the future and we as a bank are investing in not in the past, but in the future in making sure that we are investing in solar energy, in hydro energy, in wind, all types of renewable energy that Africa needs,” Adesina said.

“We want Africa to lead in renewable energy.”

He said one of the projects was the AfDB’s Green Baseload Facility, which according to the bank, aims “to accelerate the transition towards more sustainable baseload power generation options and prevent countries from locking themselves into environmentally damaging and potentially economically costly technologies”.

“It’s a $500-million facility that we have set up to support countries that want to shift out of fuel-based energy into renewable energy and providing access to finance at a cheaper rate to be able to make that transition,” Adesina said.

The bank’s biggest investment is the Desert to Power project, which was announced in December at the United Nations’ Climate Conference in Katowice, Poland.

The initiative plans to supply 10 GW of solar energy by 2025 to 250 million people across 11 Sahelian countries.

“That would make it the largest solar zone in the world,” Adesina stated. The bank will work in partnership with various investors to also establish plants on the continent that will manufacture the solar panels for the project.

The AfDB has always stated “a lack of energy remains a significant impediment to Africa’s economic and social development”.

According to AfDB, energy poverty in Africa is estimated to cost the continent 2 to 4 percent GDP annually.

Africa’s climate crisis

The continent is facing climate change impact with rising temperatures and reduced rainfall.

The Sahel, which lies between The Sahara and the Sudanian Savanna, offers a blaze of sunlight with little rain as it is the region where temperatures are rising faster than anywhere else on Earth, according to the Great Green Wall initiative, a project that aims to reverse desertification and land degradation in the area.

Last month, IPS reported that as The Sahara desert continues to expand, it tears apart families, forces migration from rural areas to cities and has contributed to conflict for precious resources of water, land and food.

In July, IPS reported that the parts of Kenya had already warmed to above 1.5˚C — a figure deemed acceptable by global leaders during the 2015 Paris Agreement. But at such high temperatures a study found that over the last four decades livestock some Kenyan counties had decline by almost a quarter because of the temperature increase over time.

During the U.N. Framework Convention on Climate Change in Paris in 2015, all countries committed under the Paris Agreement to “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C”.

But last year the U.N.’s Intergovernmental Panel on Climate Change released a special report warning that the world would face the risk of extreme heat, drought, floods and poverty at a temperature rise of 1.5°C.

However, the forum showed that there remain a number of investors looking to provide funding for renewables and other development project on the continent.

Siby Diabira, regional head for Southern Africa and the Indian Ocean for PROPARCO, a subsidiary of Agence Française de Développement (AFD) focused on private sector development, told IPS that last year the group did $1.76 billion in investment deals, half of which was in Africa. The AIF was still in its early stages to make a pronouncement on the success of the deals, Diabira said, but “so far so good”.

Diabira said the French development agencies aimed to be 100 percent compliant with the Paris Agreement and hence were investing heavily in renewable energy.

She explained that PROPARCO was involved in “all types of renewable energy from hydro to solar to wind”, adding that there was a need for a mix of both traditional and renewable energy generation.

“I have been attending some of the boardroom [discussions]. It is a quite interesting gathering to have for the second year and to have so many different types of investors and projects that are raising funds for these types of events,” she said.

“We have been present in financing the first few rounds of renewable energy projects in South Africa and our idea is also as a [Development Financial Institution] DFI to be able to contribute to create this market for the commercial banks to come with us on those types of projects,” Diabira said.

Admassu Tadesse, President of the Trade and Development Bank, also pointed out that partnership agreements among the various banks and partners had strengthen their position in deals.

“If you have smart partnerships you can scale up collectively. With the African Development Bank we have signed a risk participation agreement to the tune of $300 million, which will allow us to move speedily into fields and have partners coming into deals alongside us.”

He said they expected to soon sign a deal with the European Investment Bank (EIB) that will again strengthen their position.

EIB vice president Ambroise Fayolle said they were attending this year with great intentions to develop transactions. He said it came on the back of their 2018 record year of investments in the continent, which amounted to some $3.6 billion — more than 50 percent of which was in the private sector. The bank signed 3 partnerships already, he said, none of which would have been possible without the AIF.

And as Adesina stated in a video message at the start of the forum, “Let the deals begin”.

Source: allafrica

Ikpeazu at Africa Investment Forum targets $400m for Enyimba Economic City Project

…also to conclude $200m AfDB loan for Aba infrastructure

Okezie Ikpeazu, governor of Abia State, is participating in the 2019 Africa Investment Forum (AIF) which kicked-off Monday, November 11 in Johannesburg South Africa, with plans to attract additional $400m investments into the planned Enyimba Economic City Project.

Ikpeazu also expects to conclude a loan discussion with the African Development Bank (AfDB) for infrastructure in Aba. He is attending the investment forum on the invitation of Akinwumni Adesina , President of the AfDB.

A statement from Onyebuchi Ememanka, chief press secretary to Abia State Governor, stated that Ikpeazu will lead participation at an investment boardroom meeting with core global investors to raise financing for the proposed Enyimba Economic City Development project.

He explained that the project was being sponsored at the board room by the AfDB, Afriexim Bank and the International Finance Corporation, the private-sector investment arm of the World Bank.

The Governor supported by the private sector lead Darl Uzu and the Federal Government team led by the Minister for Industry, Trade, and Investment Niyi Adebayo, will pitch to global business leaders opportunities in the Enyimba Economic Development City project.

The efforts are targeted at raising an additional $400 million required for the first phase of the project expected to start Q1 2020.

One of the major high points of the Governor’s trip to South Africa is his meeting with the President of the AfDB, to tidy up the $200 million AfDB-assisted infrastructural development project, targeted at dealing with major infrastructural challenges particularly, roads, stormwater, and environmental management issues in Aba.

Prominent amongst them is President Paul Kagame of Rwanda.

Ememanka in the statement also said that the Governor would hold meetings with Abians resident in Johannesburg to update them with developments at home.

Those accompanying the Governor on the trip are the State’s Commissioner for Finance, Aham Uko, his counterpart in the Ministry of Works, Bob Chiedozie Ogu and Chinenye Nwogu, special adviser to the Governor.

The three-day event is being attended by many African business and political leaders, including Presidents and Heads of governments across the continent and beyond.

Source: businessday

Nigeria to Connect East, South, North African Countries by Road, Says Fashola

Nigeria’s works and housing minister Babatunde Fashola on Monday said the ongoing road construction projects in the country are targetted at connecting East, West, North and South African countries by road.

Speaking at the 70th Session of the Trans Sahara Road Liaison Committee in Abuja, Fashola informed Member Country Ministers in charge of road infrastructure from Tunisia, Algeria, Mali, Chad and Niger of Nigeria’s efforts towards the establishment of the Trans Sahara Route.

“Trans African Highway Plan [seeks] to connect Africa from Cape Town to Tunisia either by driving through East Africa Border, the West African Border or through the Centre of Africa,” Fashola said.

“There is also a Coast to Coast connectivity from West to East Africa, North-East Africa to North-West Africa and South-West Africa to East Africa.”

The Nigerian minister explained that a total of 9 highways at different stages of construction are meant to achieve African connectivity.

“Three of these highways, he said to pass through the territory of Nigeria,” Fashola said.

Fashola listed Lagos – Dakar through Seme in the Benin Republic, Lagos – Mombasa through Yaoundè in Cameroon and Lagos – Algiers, which was the subject of the meeting in Abuja as the parts the Nigerian government is playing to contribute to the connectivity between African countries.

He disclosed that the Lagos – Algiers road covers 9,022km (7,171km 80%) in asphalt while 1,851km (20%) in earth road.

Fashola said the road serves 37 regions, 74 urban centres with 60 million inhabitants in 6 member countries of the Trans Sahara Road Liaison Committee.

The minister stated that 1,131km of the 9,022km passes through Lagos to Ibadan, Ilorin – Jebba, Kaduna – Kano – Kongolam where Nigeria has a border with the Niger Republic.

Explaining the importance of the connectivity, Fashola stated that “the development of the Trans Sahara Route is to ensure integration, improvement of economic activities and cooperation between Member Countries.

“This will provide the business community access to explore and maximise the enormous economic opportunities available within member countries. There are immense possibilities from Fashion, Agriculture, Technology, Energy to Film and Music.”

He said the Trans Sahara Route and the recent signing of the African Continental Free Trade Area (ACFTA) Treaty is a top priority in President Muhammadu Buhari’s plan to integrate and expand Nigeria’s economy.

Fashola said Buhari had placed the funding of the reconstruction of the Lagos – Ibadan Section and the Kaduna – Kano Section under the Presidential Infrastructure Development Fund (PIDF) to ensure that there is no funding gap in the execution of the project.

Source: guardianng

Abuja’s Oldest Buildings Rotting Away

Wuse and Garki are two areas in the centre of the nation’s capital where many of Abuja’s legacy buildings that serve as living quarters for mostly civil servants are located. Many of the high rise buildings built over 30 years ago are as old as Abuja City itself, just as Wuse and Garki are among the first districts created after the birth of the Federal Capital Territory (FCT).

These quarters which comprise between two to three-bedroom apartments were initially built by the FCT Administration (FCTA) for civil servants and were later privatised and sold out to the workers. Daily Trust reports that some civil servants were the beneficiaries of the privatisation and some who benefited from the housing programme sold them out, while some still live in the houses even after retirement.

Our reporter went round to observe the current state of these buildings and found that most of them suffer from poor maintenance. Many of the houses are being left to rot away even as their owners still live in them. While the walls are breaking apart, the sewage disposal systems have been left to deteriorate and broken water pipes litter the environment. When these buildings are compared to such property in some African countries, it can be seen that regular maintenance keeps alive many old buildings built over 100 years ago which now serve as monuments and tourist sites. Example is the Northwards Mansion in Parktown, Johannesburg, South Africa, which was designed by a renowned architect, Sir Herbert Baker, in 1904.

The mansion is hailed as a fine example of the Arts and Crafts Movement. Notable features include stones sourced on site, plastered brickwork, a beautiful minstrel gallery and Juliette Balconies. In addition to being an attractive heritage property, Northwards also stands out for the way it was constructed. At the time of its construction, most homes were built from pre-fabricated and manufactured materials following the Industrial Revolution.

Northwards flew in the face of convention as it was hand-built by craftsmen and masons. Northwards has been exceptionally well maintained, and today, it plays host to the Parktown Trust and is occasionally used as a concert venue. This is just an example out of many other old buildings in different parts of the world which are maintained and kept functional.

A resident of Wuse who does not want her identity revealed, told Daily Trust that she and her family had been living in their apartment for over 30 years and that apart from poor maintenance, lack of cooperation by other residents was affecting the buildings. She said, “After my marriage in 1984, I was brought straight to this house and I had all my five children here. Most times when a meeting is held in respect of the buildings’ maintenance and the issue of money comes up, most people hardly contribute. So that is the reason the buildings are rotting away.”

She added that, “If you see renovation taking place, it is either inside an apartment, maybe because the owner is renting it out to generate money. “Most of us staying in these buildings are owners of the apartments, so my advice to other owners is that we should maintain them so that they would sustain us for a very long time as we don’t have anywhere to go if they collapse.” A retired civil servant, Okpara Stanley, who resides in his three-bedroom apartment in one of the high rise buildings in Wuse Zone 7, said the building was properly maintained because they formed a residents association and that the money they got from the association was what was being used to maintain the building.

Stanley said, “We believe that maintenance is what will sustain this property that some of us acquired over 30 years ago, and that is why we gather funds to attend to any immediate repair.” The Special Assistant on Media to the FCT Minister, Mallam Sani Abubakar, who spoke with Daily Trust on why the houses are not being properly maintained, said such houses were no longer in the “hands” of the authorities because they had been privatised and sold out. Mallam Abubakar added that where government came in was when the property was under violation of use or the owner tried to expand the apartment, then the Department of Development Control would take charge.

Source: dailytrustng

The Benefits of 2020 budget For Housing Professionals

With expected Compound Annual Growth Rate (CAGR) in the real estate sector put at 13.65 per cent from 2019 to 2022, experts have advised housing professionals to take advantage of the 2020 budget to reduce housing deficit in the country.

Out of the N2.14 trillion proposed capital expenditure for 2020 budget, works and housing has the highest capital allocation of 12 per cent. While construction and rehabilitation of roads would consume a budget size of N210billion, the federal government national housing and social housing scheme (Family homes fund) will gulp an estimated N17.5 billion and N30 billion respectively.

Despite the challenges of poor access to loan facilities, difficulty in obtaining property titles and high cost of building houses in Nigeria, analysts who spoke to The Guardian, explained that Nigeria will continue to have strong fundamentals in the real estate industry. They urged professionals, especially estate surveyors and valuers to take advantage of the opportunities.

Speaking at the summit, themed “Exploring the present realities for the future” organised by the Lagos State branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), a director at Price Water Copper, Bola Adigun disclosed that Nigerian growing middle class, which out-numbers that of any other state in the sub Sahara Africa, the overall population estimated at about 200 million and its seven cities with a population of over one million people presents several possible markets for investors.

She explained, “The growth of real estate is dependent on the health of the economy and if the economy does well, the industry would do well. The private sector should look at ways by which they could partner with government to ensure that the nation has a sector that is profitable, bankable and working. There are multiple areas by which the real estate operator could benefit from the budget.

“However the major thing is to first understand the market with statistics, saying there are housing deficits of 17 million units. We need to first examine the various strata in the range of upper class, upper middle class, lower middle class and lower class, classify the clientele very well and develop bespoke products to address the needs of specific sectors and customer characteristics. Then, look for how to get government supports through PPP structures to address the housing deficits.”

Adigun was of the view that in real estate, off-take is critical, hence developers need to design products that the market needs and build in relation to their budget. “Professionals could explore emerging finance structures in Nigeria like, pre-sales, equity financing, debt financing, mezzanine structure and public private partnerships. Professionals can’t just build in isolation, they need to build to meet the needs of the people and keep off the market from been idle and from unoccupied properties”, she warned.

Chairman NIESV Lagos State branch, Adedotun Bamigbola harped on the need to provide leadership in the industry, promote specialisation in real estate practice and ensure that practitioners work together for standard and for business better environment.

“A lot of issues has come out which we are also looking at advising the state government in this respect to ensure that there could better collaboration between the professionals in the industry and ensuring a roadmap for improve development in the industry.

“The issue of the housing deficit is something that needs to be critically dealt with and the approach need to be defined. The issue of funding of real estate sector through syndication finance which is out of the conventional loan design is Important because it brings equity and s capital into a project for development.

“N60 billion allocation for the housing sector is not only about the opportunities it offers the housing professionals but the impact that it would have on the existing housing deficit which experts said would make little or no impacts.”

He stated that Nigerian still have a long way to go, if the nation is to recover from the 22million housing units deficits stressing that public private partnership (PPP) is the way forward but maintained that the critical challenge is accessibility of land in terms of how people get title to lands.

Housing Development

“The Minister of Works and Housing, Babatunde Fashola has proposed recently, a N10 trillion infrastructure bond and the narrative is that if the bond is not engineered by 2020, the following year, the nation might need a N15 trillion infrastructure bond. This means that we are just playing a catch up here and the earlier we get our games right and start moving fast, the better.

“ Government needs to understand that they are not issuing contracts when it comes to PPP, it more of a joint venture and so authorities must give the respect to the fact that some people are bringing in fund and there is a legal angle to where the funds are coming from”, he said.

Bamigbola said: “Nigeria has to rejig its system and existing laws and there has to be a value reorientation in terms of government recognizing the private sector and it shouldn’t be a master-servant issue but a partnership that guarantees project start that get to the finish line and not the type that stops mid-way.”

Source: Guardiang Excluding Headline

DBN To Build MSMEs’ Capacity To Access Cheap Loans

The Development Bank of Nigeria (DBN) has announced plans to build capacity of the Micro Small and Medium Enterprises  (MSMEs) to enable them acess its cheap loans through the Participating Financial Institutions  (PFIs).
This is part of the bank’s new strategy to boost the growing network of MSMEs which the wholesale bank is financing across the country and also extend its reach to underserved areas.
Already, DBN has in the current year disbursed over 100 Billion Naira to over 95,000 MSMEs cutting across various sectors of the economy. 70% of the loans went to women-owned/managed businesses while 51% so far were disbursed to youth owned businesses.
 Tony Okpanachi, DBN’s Chief Executive Officer says the bank”s new strategy has become important because “a major challenge faced by the MSMEs is their inability to structure and put together a bankable business plan which makes banks view them as high risk and therefore unwilling to finance them.”
To fix the problem and make MSMEs attractive to DBN’s participating financial institutions (PFIs), Okpanachi said that the bank’s “Chief Operating Officer will work with relevant departments within DBN to put together an immediate capacity building plan that will involve assembling a number of MSMEs in Borno State and making them go through an extensive capacity building programme.”

As part of this renewed focus, DBN is taking several measures including the expansion of its capacity building programmes in the North East, South East and North West which have witnessed comparatively lower rates of disbursement.

The objective is to boost the capacity of local entrepreneurs to meet its requirements and qualify for inclusion for DBN support.

At the bank’s first DBN MSME Summit held in Maiduguri, Borno State, Okpanachi said this in line with the bank’s mandate to support the stimulation of diversified and inclusive growth and alleviate specific financing constraints that hamper the growth of domestic production and commerce by providing targeted wholesale funding to fill identified enterprise financing gaps in the MSME segment.

DBN commenced lending operations in November of 2017 with two microfinance banks namely, LAPO and NPF with a pilot loan amount of N200 million to about 300 MSMEs.

In its first full year of operation in 2018, the bank increased disbursements to about N30 Billion and reached 35,000 MSME’s in the country. 

Source: Businessdayng

Ndegwas Create Largest Fund Manager in Stanlib Buyout

The Philip Ndegwa family is on course to run the biggest fund, managing more than Sh278 billion once it completes the buyout of asset manager Stanlib Kenya.

The family’s ICEA Lion Asset Management has signed an agreement to acquire Stanlib Kenya in a deal whose value is estimated at more than Sh1.5 billion.

Rankings of fund managers as of December 2018 indicate that ICEA and Stanlib, combined, will be in contention to replace Sanlam Investments East Africa Limited (SIEAL) as the largest asset manager.

A survey by pension administrator Zamara shows that SIEAL was managing a total of Sh277 billion as of December 2018 when Stanlib was overseeing Sh135.2 billion.

ICEA, according to a separate source, was running a total of Sh143 billion at the same time.

This means that ICEA and Stanlib were managing Sh278.2 billion combined, slightly higher than SIEAL’s Sh277 billion.

For the Ndegwas, the deal serves to build scale in asset management besides offering an opportunity to enter the listed property fund business.

The transaction, expected to be completed early next year, will also see ICEA inherit from Stanlib the role of managing property fund Stanlib Fahari I-Reit, which is listed on the Nairobi Securities Exchange.

“The transaction is meant to enhance capacity in asset management and offer clients new property investment opportunities,” one of the sources involved in the deal said.

ICEA will earn fees of more than Sh80 million per year to manage the property fund. The transaction has sparked speculation that the Ndegwas could sell some of their buildings to the Reit in exchange for shares.

Others are assuming that the family could also buy out the property fund manager, which is trading at less than half of its net asset value per share of Sh20.2.

The Reit’s shares hit highs of Sh9 on Friday after the deal was announced.

Sources privy to the deal told the Business Daily that ICEA currently has no plans to acquire shares in the Reit.

“Buying or selling shares in the Reit is not part of this transaction,” a source said, adding that current owners including Stanlib (with a 10.2 percent stake) could still sell their holdings to any party in the future.

Source: businessdailyafrica

Politics of Capital City and The ‘No-Man’s Land’ Concept

From historical perspectives, the British colonialists’ basic criteria for choice of capital for their colonies were administrative convenience and security for the British personnel and the contribution of the selected city to the colonial economy. They were more mindful of the efficient running of the colonial economy, rather than the overriding interest of Nigeria.

“Consul Beecroft pitched his headquarters in Fenando Po for 24 years because he was not sure of Nigeria’s reaction. It was later moved to the old Calabar where the British were sure of the loyalty of the local chiefs and their people.

The Royal Niger Company on the other hand had their headquarters in Asaba and Lokoja. In the final years of 19th Century, the British took the responsibilities of the amalgamated Lagos, the Niger Coast Protectorate and all areas under the control of the Royal Niger Company. In the South two administrative units emerged; Calabar, for the Niger Coast Protectorate and Lagos, the headquarters of the Colony and Protectorate of Lagos.

“When the Northern Protectorate was created in 1900, the administrative headquarters was successively directed from Jebba, Lokoja, Zungeru and finally Kaduna, between 1900 – 1917. Due to the keen interest Luggard had in Kaduna he suggested that Lagos and Kaduna be used as two Capital Cities” (Bena 1974).

The question of position of Lagos first came up in the joint Lagos and colony conferences and also at the West Regional Conference which took place in 1949. By 1950 the majority of the members of the select committee of the legislative council recommended that subject to certain safeguards, Lagos be merged with the West, which the British accepted. These safeguards were designed to protect the position of Lagos as Nigeria’s Capital City. By the time of the Nigerian politicians’ assembly in London for the constitutional conference, Lagos municipality was separated from the Western Region.

Thus Lagos became and remained the Federal Capital until 1967, when as a result of emergency Lagos State was created, and hence assumed an additional role of State Capital. Accordingly, as described, “Capital City represents an arena for frontal collision between dissimilar heritages and value systems; a melting pot of culture; a dominant focus of cultural transmission and dissemination as well as a hot bed of political fermentation” (Bena 1974).

Source: dailytrustng

Property Owners Take Issue of High Land Use Charges to Lagos Appeal Court

Despite the reprieve promised by the Lagos government to property owners, professional groups and the organised private sector after protests that trailed the land use charge law last year, many residents are yet to enjoy the reductions in the rates.

Investigations by The Guardian last week show that property owners within the state still have to battle with high charges on their properties even as many of them had to approach the assessment appeal tribunal to seek redress from what they called, ‘outrageous financial burden’.

The Lagos state land use charge is a property tax backed by the Land Use Charge (LUC) law of 2018. It is a consolidation of ground rent, tenement rate, and neighborhood improvement levy. The Law backing LUC was first enacted in 2001 but was repealed and re-enacted to address some identified challenges after its introduction in 2018. The new law then imposed an increased tax on property owners in the state, which was vehemently opposed by the critical stakeholders.

According to authorities, some of the major challenges that warranted its review include, the lack of clarity on the LUC formula to support self-assessment, obsolete rates that had not been reviewed in over a decade and the need to improve LUC administration and efficiency. The amended Law also provides a robust legal and regulatory framework to support LUC administration reforms aimed at growing the state’s economy.

After so many pressures arising from the people, government reviewed the increase on the land fee stating that payment can be done in installment and that such would relieve house owners the burden of paying the amount once. In addition, the state government announced a 50 percent discount for commercial property owners while private property owners and those assets use for industrial activities were given 25 percent increase.

According to government statement, “Commercial Property Owner, who are undoubtedly the stakeholders mostly impacted by this amended Law will be granted 50 percent discount. This means a commercial property valued at N20 million, which was earlier, billed N91, 200.00 will now pay N45, 600.00 per annum. Property Occupied by Owner and Third Party and Property Used for Industrial and Manufacturing Purposes: These categories of property will enjoy 25 percent discount. This means that a N20Million property expected to pay N30, 720 will now pay N23, 040 per year.

Property occupied by owners was given 15per cent discount off the reviewed land use fee. This category of property will enjoy 15 percent discount. For a N20 million property, this used to be N9, 120 now; it is N7, 752 per annum. The state government added that other rates and reliefs remain unchanged & will be implemented as stipulated by Law. These include 40 percent general relief, 10 per cent for 70 years and above, 105 for properties owned by persons living with disability and 10 percent for properties that are 25yrs.”

The government also revealed that penalty for late payment has been waived and those who have paid the fee allocated to them would enjoy tax credits.  The LUC is payable in respect of all real estate property situated in Lagos State.

A visit to the Jobi Fele Way building in Alausa, Ikeja that hosted the tribunal revealed that some of the those who had to approach the tribunal on complaints bordering on high charges placed on their properties were from, Ajeromi-Ifelodu, Ikeja, Oshodi-Isolo, Lagos Mainland, Lagos Island, Agege, Surulere, Ifako-Ijaiye and other part of the state.

A property agent Mr. Sunday Ajaiye told The Guardian that he was in the facility to expressed concerns over a N500, 000 charge imposed on a commercial building owned by his company. According, there was a huge discrepancy between what they used to pay and the charges brought recently.

“I was worried by the LUC charge brought to our office lately because before now we pay about N300, 000 but the new bill brought was about N500, 000. So I have to come here with our colleague to seek a redress of the situation.”

“Our complaint centred on the fact that officials of the land use charge need to get their valuation procedure right because it’s unfair to just award charges that doesn’t commensurate to the worth of property that people has in their sites. They should be more diligent to avoid unnecessary complaints by property owners, agents and others”, he stated.

Ajaiye who also manages a two-storey building used for religious purpose lamented the outrageous amount being charged on the property. He disclosed that before they used to pay about N40, 000 but in the charge brought by the officials, the building was awarded about N100, 000.00. He appealed to the tribunal to carry out a downward review of the charge.

Speaking on his experience on the Land use charge/ tribunal, Mr. Abubakar Kadiri from Lagos Island said, “The delays, which we face here, is a waste of useful man-hour. Only two-stand point were put in place to attend to complaints and so a person has to wait endlessly before he would be attended to. I think those in charge have to get enough hands for quick discharge of complaints. As you could see, the place is jam-packed and crowded.”

With the harsh economic realities and the high land charge fees, Kadiri said the new Land Use Charge Law should have focused on the issue of avoidance in payment rather than a hike, in order to ensure more property owners pay.

Sources disclosed that the state’s land use charge are only by paid about 300,000 properties out of an estimated two million eligible properties in Lagos State as at 2017.

On her part, Mrs. Yetunde Salami from Surulere said, “Those in charge overdo things, the charges are too high and they need to understand what is happening in town economically, there is no money. If the authorities keep bringing high charges to the people, the rate of avoidance in payment could be very high. For instance, the charges that was awarded to us was extremely high. I doubt, if government would achieve its revenue target with this development.  Government revenue drive would have been achieved if the old rates were maintained for all properties in the state.”

While commending government’s initiative for setting up the land use charge resolution week, Mr. Jude Okafor from Oshodi-Isolo however urged authorities to address issue of overvaluation and exemption for some properties owners in the state.

According to him, there was the need to decentralize the location of the tribunal for respective property owners instead of everybody coming down to Ikeja to make their complains known.

“Somebody that builds house while he was active in service and was paying between N200, 000 and N500, 000, now that he is retired, no income again. How can he continue to pay that same amount?” he stated.

Source: Guardianng Excluding Headline

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