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).
Homeownership has its perks, among them tax advantages (the mortgage interest deduction and capital gains exclusion), as well as equity-building opportunities. With the homeownership rate at 64%, clearly Americans value having a stake in where they live.
But home prices are going up each year, often outpacing wage gains, making it increasingly difficult for people to accumulate a down payment for a home. That keeps them renters rather than homeowners.
“The rent cycle has been a very difficult thing to break out of in the last 10 years because of the appreciating home market,” says Joseph Polakovic, president at Castle West Financial in San Diego. “As renters save their money for a down payment, the price of the home they were saving for is simultaneously going up in value and requiring more money for a down payment and banking reserves (usually six to 12 months of mortgage payments).”
So how do renters, who are facing rising home prices and high student loan debt as well as other living expenses, make the leap to owning? The answer is as varied as the circumstances of each would-be homebuyer. For many people, the down payment is the main barrier to homeownership, while others struggle with credit issues and some face a lack of affordable housing in their area.
Here’s some expert advice on what hopeful homebuyers can do to escape the rent cycle.
SPEAK WITH A PRO
If you’re a first-timer, navigating the home buying process can be intimidating. Buying a home is a huge undertaking that comes with big price tags and often long-term ramifications.
If you’ve never bought a house, then you don’t know what you don’t know. It’s a good idea to begin your journey with an expert who can work with you to put a plan in place that aligns with your finances and goals.
“An accountant, mortgage broker or other financial professional can help with budgeting potential costs and what you can realistically expect from your income and available funds,” says Leslie Tayne, founder and attorney at New York-based Tayne Law Group. “You’d be surprised how people make mistakes that can negatively impact the buying process, such as taking money from family without written designations or buying more things on credit or even deferring student loans.”
WHIP YOUR CREDIT INTO SHAPE
Like your SAT score or batting average, your credit score is a number you’re either proud of something you won’t be bragging about at Thanksgiving dinner. If it’s the latter, you might be stressing way too much.
Unlike natural intelligence or raw hitting talent, you have total control over your credit score (absent any fraud or identity theft). And this is an important piece of the homebuying puzzle because it’s the key to getting the best interest rate.
“I help a lot of homeowners get out of this very cycle. My first piece of advice to potential first-time homeowners is to work on their credit,” says Donovan Reynolds, a real estate agent at Coldwell Banker Residential Brokerage in Atlanta. “They need to have at least a 580 credit score; so paying down credit card debt and keeping a low debt-to-income ratio is crucial.”
START SAVING NOW
There are a few good reasons for having a sizable house down payment. The big one is to avoid private mortgage insurance, or PMI. This is a fee lenders tack on loans for buyers who put less than 20% down, and it can add hundreds to your monthly mortgage payment. You can learn more about it here.
A larger down payment also means a lower loan-to-value ratio, or LTV, which helps offset a lender’s risk, so they are willing to offer you a better interest rate to attract your business. It also shrinks your principal balance faster, which affects how much you pay in interest and how much equity you have in your house.
“The best advice for future homebuyers is to start saving as early as possible. If you consistently set aside a part of your paycheck, you can build a down payment that will be there when you are ready to buy a home,” says Judith Corprew, executive vice president, chief compliance & risk officer at Patriot Bank, N.A.
It’s important to cut back on your expenses, Tayne adds. She recommends downsizing wherever possible, including switching to a smaller cable package or cellphone plan and squirreling that money away in a down payment savings account.
“Freeing up some funds can allow you to save more for a down payment. This can also include taking on an extra job to increase cash in the bank, so you qualify for loans more easily and with lower costs,” Tayne says.
HOME LOANS WITH LOW OR NO DOWN PAYMENT
What happens if you can’t save up (much) for a down payment, but you’d rather convert your monthly rent check to a monthly mortgage check? The answer: low or no down-payment home loans. This is not a silver-bullet solution as you’ll likely pay PMI and incur a higher interest rate, but it can help get you in a house faster.
There are several private and government-backed lenders that offer loans to people who don’t have a big down-payment. Big banks, like Bank of America and Wells Fargo, offer 3% down payment mortgages.
Additionally, there are several government programs that offer less stringent credit requirements and lower down-payment loans than traditional lenders.
“We help people buy homes in rural and some suburban areas with zero down using U.S. Department of Agriculture home loans. There are some income limits, but they can be surprisingly generous,” says Adam Spigelman, vice president at Planet Home Lending.
Mortgages with no down payment or a small one:
Department of Veterans Affairs
Navy Federal Credit Union
Federal Housing Administration
RENT OUT A PORTION OF YOUR HOUSE FOR INCOME
Becoming a landlord might be the perfect second job to help you afford a home. That is, buy a duplex or a house with an extra room and rent it out to help pay your mortgage. This is a tactic some buyers use to offset housing costs.
“From a cash flow standpoint, if you’re paying $1,200 a month for a tiny apartment, often you can buy a small home or duplex and have a similar payment. Even if your payment to own is as high as $1,600 the strategy still works great,” says David Young, CEO at Paragon Wealth Management. “Charge your renter around $1,000 a month and now your cost to own is only $200 to $600. Worst case, you have cut your rent cost in half.”
CONSIDER A 401(K) LOAN
Tapping your 401(k) is usually not recommended outside of emergencies, but some experts think it can be a useful tool in some circumstances.
A 401(k) loan is different from getting an early withdrawal, in that you won’t pay a penalty. Instead 401(k) borrowers will pay interest — which can be on par with personal loans. The good news is that the interest goes back into your account, so essentially you’re paying yourself to borrow your money.
It gets dicey if you leave or get terminated from your job before you repay the loan. Under the Tax Cuts and Jobs Act of 2017, you must repay the loan by the due date of your tax return for the year when you leave your job or you’ll have to pay taxes and a penalty (if you’re younger than age 59.5) on the outstanding amount.
“I work with a lot of federal employees who contribute to the Thrift Savings Plan. One of the best features of the TSP is the TSP loan where you can take as much as $50,000 and pay the interest rate of short-term U.S. Treasurys, which is currently around 2%.
Better still, that interest that you pay gets credited to your account. It’s a wonderful tool,” Polakovic says.
USE A MONETARY GIFT
Honeyfund, the popular honeymoon registry where people can donate cash for a postnuptial vacation, also offers a mortgage registry called Homebuilder. This tool is one way to crowdsource a down payment. More traditional cash infusions include good ol’ monetary gifts from family members.
“Many parents or family members are giving their grown children an inheritance now so they can see them enjoy it,” says Martin Eiden, real estate broker at Compass in Manhattan. “Lenders are amenable to this as long as the person gifting will state in writing that it is not a loan and does not need to be paid back.”
BUY A HOUSE WITH A FRIEND
There are some friends you wouldn’t share a Netflix account with much less a mortgage. But, there are those rare people who have proven their trustworthiness over the years and can be responsible enough to get into a long-term loan with. Friends who fall in the latter category might be good candidates with whom you can co-buy a house.
“Buying a home with a friend is not just an option for married couples, but it does require a lot of trust as you both are intertwining your financial futures together,” Polakovic says. “I recommend having a strong side agreement with the other person that clearly lays out the exit strategy.”
Before you go this route, it’s a good idea to sit down with a real estate attorney to understand the laws and your rights as a co-signer on the mortgage. Questions you should ask are: What happens if one of you wants to sell and the other doesn’t? What if one of you wants to invite a partner to move in — how would mortgage payments and rent be split up? What if one person loses their job and can no longer afford the mortgage?
RESEARCH FIRST-TIME HOMEBUYER PROGRAMS
There are many homebuying programs for people who have never owned a home or haven’t owned one in at least three years. Across the U.S., there are more than 2,500 grants and loan programs to make homeownership more accessible, according to a report by the Urban Institute.
“Down payment assistance programs may be a soft second mortgage, where the organization can provide a certain amount to assist you that can be used towards the down payment or closing costs. These programs may have income requirements or require you to be a first-time homebuyer,” Tayne says.
Start by contacting a local lender, they likely have program information to point you in the right direction.
CONSIDER LESS-EXPENSIVE HOUSING
The words “starter house” might summon images of run-down fixer uppers or homes in neighborhoods far from where you work or your kids go to school, but they might be your springboard to homeownership.
Starter homes can be effective ways to build equity which you can later use for a down payment on a bigger, better home — closer to prime neighborhoods.
Options for starter homes might include condos, duplexes or manufactured housing (as long as you own the land). In fact, a recent report by Urban Institute showed that manufactured homes appreciate at nearly the same rate as stick-built homes, making them viable candidates for buyers on a budget.
“Manufactured housing can be less expensive than a traditional new home. You can buy certain manufactured homes with just 3% down, using a Fannie Mae MH Advantage home loan. These aren’t your grandparents’ mobile homes, they have features like pitched roofs, garages, and drywall throughout,” Spigelman says.
As you can see, there’s no one path to homeownership. And not all options will work for everyone. Keep in mind that everyone is dealing with different financial and personal circumstances, so be sure to speak with an adviser about what’s best for you.
Your home should be your haven, a safe place you can relax, unwind and be at peace. However, to achieve this there are certain things you should get out of your home. Here are six things to never bring into your home.
Not just any picture, but pictures of people you don’t really like, pictures of people who hurt you deeply and pictures of those you don’t know at all or those who died tragically. Generally, avoid having pictures of people or events that sadden you, in your home. You would think most people will know this, but most people typically do the opposite and continually deny themselves the opportunity to overcome the bad aura from the past.
Old worn shoes
If they are ripped, worn or no longer in use, you should dump them. There’s no need to have them in your home taking up space that can be used house better things. Besides, you’ll be sparing yourself the unsettling smell of old worn shoe.
If it’s broken, throw it out and replace it (if you can or if you want to). Avoid keeping broken items in your home, regardless of how expensive they are or regardless of their emotional significance. You can try to repair it or put it together if you can, but keep in mind that this should be a temporary solution pending when you can replace it. Avoid managing broken things for a long period. Aside being improper, it can be dangerous.
Old irrelevant periodicals
Get rid of old newspapers or magazines you no longer need to avoid cluttering your home and to prevent pests and insects from hiding in or around them. You might have read and loved these periodicals but unless they are in some way relevant, it’s advised you get rid of them to create space for new inspiring material.
Clothes you don’t wear
It’s normal to hold on to clothing in case the style comes back into fashion or in case they might fit you again someday, but sometimes it just doesn’t happen that way. At this point, you therefore need to get rid of them to create space for clothes you do love and are more likely to wear. Besides, giving the clothes out to a charity home can be quite emotionally fulfilling.
Out-of-date technology and cords
We are all guilty of this. Sitting at some area or corner of our home, there are one or two out-of-date tech items and corresponding cords and adaptors we hardly ever or might even never use. Why keep these purposeless items in your home? Consider throwing them out, donating or reselling some of these out-of-date tech items and corresponding cords, and avoid wasting time looking for the tech items you actually use amidst the clutter.
Fifty-four African countries recently ratified a continental trade treaty that will create an estimated $3.4 trillion market opportunity.
Popularly called the African Continental Free Trade Area (AfCFTA), the trade treaty promises to liberalise trade among African countries and create a single market for goods and services on the continent.
It is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994 and a flagship project of Africa’s Agenda 2063.
The treaty is expected to raise Africa’s nominal GDP to $6.7 trillion by 2030 and liberalise 90 percent of products manufactured in Africa. This means that a country can only protect 10 percent of its local industries.
Trade liberalists argue that it will favour small and medium-sized enterprises in Africa by enabling them to supply inputs to larger regional companies.
They cite the South African example. Due to free trade, large carmakers in South Africa source leather for seats from Botswana and fabrics from Lesotho, under the preferential Southern African Customs Union trading regime.
The AfCFTA officially came into force on 30th May 2019 when the required number of ratifications—22— were obtained, making the agreement a binding international legal instrument. Negotiations are, however, ongoing.
After months of consultation and dilly-dallying, Nigeria’s President Muhammadu Buhari signed the AfCFTA in July this year, seeking fair trade for Nigeria.
Speaking at an event in Niamey, Buhari noted that “Nigeria wishes to emphasise that free trade must also be fair trade.”
“As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hard-working population,” he added.
This made front pages of newspapers, but concealed a critical issue of trade readiness by Nigeria and the rest of Africa.
Today, many African countries, including Nigeria, are going against the spirit and letters of the AfCFTA.
In the first place, AfCFTA is targeted at open and free trade, but Nigeria has been the biggest violator. The Central Bank of Nigeria is still increasing the list of items that are ineligible for foreign exchange access and is vehemently supporting closure of Benin borders.
These two actions are anti-trade, according to experts, and they fail to factor in issues like the supply-side constraints in the agriculture sector, inflation, pressure on manufacturers and exporters as well as possible impact on trade, analysts say.
Olu Fasan, member of the International Trade Policy Unit (ITPU) of the London School of Economics and Political Science, said the border closure will enrich local producers, without increasing their productivity and competitiveness, while also harming the interests of Nigerian exporters and consumers.
“Truth is, Nigeria’s deep-seated protectionism is not compatible with its international legal commitments. It would have to decide whether to comply with its international obligations, legally invoke the escape provisions in international trade agreements or withdraw from them altogether,” he said in a Monday column in BusinessDay.
In his article entitled, ‘Border closure: Nigeria is trampling upon the world legal order’, Fasan said the border closure is a blatant violation of Nigeria’s commitments under the World Trade Organisation (WTO) and Economic Community of West African States (ECOWAS) treaties.
“Surely, by closing its land borders to stop cross-border movement of goods, Nigeria is, firstly, prohibiting or restricting imports other than through duties, taxes or other charges, and, secondly, nullifying and impairing the benefits accruing to other WTO members, especially those in West Africa, whose legitimate exports to Nigeria are being restricted, in violation of WTO law,” he said.
“What’s more, Nigeria could justify the closure of its borders on the ground of curbing smuggling or customs enforcement under Article XX or on the ground of national security under Article XXI, provided the border closure does not constitute ‘a disguised restriction on international trade’. But everyone knows that the underlying reason for the border closure was not smuggling or national security concerns, but the protection of local industries, and, thus, it’s a disguised restriction on international trade,” he further said.
But Nigeria is not the only country in this party. Perhaps, much noise is made about Nigeria because of its strategic position as Africa’s most populous and biggest economy.
Sudan, in September, ordered closure of its borders with Libya and Central African Republic, citing security and economic dangers.
In June, Kenya shut its borders with Somalia for security reasons one week after outlawing along the coast near the Somalia border. Kenya authorities cited increased illegal trade, as well as human and drug trafficking in the area as major reasons for the latter action.
In April this year, Eritrea unilaterally closed all border crossings with neighbouring Ethiopia less than a year after the two countries made peace.
Before the outright closure in April this year, Ethiopia-licensed vehicles traveling to Eritrea from the Ethiopian town of Rama had been asked for permits in December 2018, according to a Reuters report.
“We did not receive any prior notice,” Reuters quoted Liya Kassa, spokeswoman for the regional administration in the Tigray region which borders Eritrea, as saying in December 2018.
In March this year, Rwanda shut down borders against Uganda over diplomatic row that has seen the two countries suspecting each other.
In June this year, three civil society organisations sued Rwandan and Ugandan governments on behalf of women traders suffering financial losses owing to the border closure.
The civil society groups said it contravened the 1999 Treaty for the Establishment of the East African Community and violated the economic rights of women to engage in trade. Deaths were reported along the border, with security forces accused of perpetrating the acts.
In August, Equatorial Guinea said it was building a Trump-like border wall to stop Cameroonians and West Africans from illegally entering its territory.
Kenya, Rwanda, Equatorial Guinea, and Uganda, among others, are among countries that have signed onto the AfCFTA. Eritrea is not part of the AfCFTA.
Analysts believe the AfCFTA may fail unless African countries understand the impact of unilateral trade policies.
“Border closures are against the spirit and letters of the AfCFTA,” said an analyst.
“If we continue this way, there will be a lot of unilateral trade decisions that will be taken across the continent in AfCFTA era. This could defeat the AfCFTA objectives,” the analyst further said.
Though few of the reasons are understandable, given their connections with health, security and politics, decisions of border closure should not be taken without due consultations, say trade analysts. This leads to the question: Is Africa really ready for the AfCFTA?
Helen Suzman Foundation, which promotes liberal constitutional democracy through broadening public debate and research, said in a publication that South Africa’s past experience of free trade paints a bleak picture.
The Southern African Development Community (SADC) was founded in 1992. Despite agreement to reduce tariff, Malawi, Mozambique and Zimbabwe failed to cut tariffs on South African goods, arguing that the loss of potential tariff revenue was too great. This is despite that the SADC, unlike AfCFTA, excluded a number of important products such as vehicles, base metals, minerals and textiles.
“Trade in sugar – viewed as a ‘political good’ – was a source of major dispute and eventual impasse,” the report said.
Many experts are keeping mute over possible issues that could arise when the AfCFTA starts, but they are aware that it will test Africa’s readiness to trade. The continent’s intra-trade is estimated at 16 percent, which is relatively low when compared to Europe’s 59 percent, Asia’s 51 percent and North America’s 37 percent.
There is a potential danger, but Africa is yet to discuss it.
Estate Planning is all about planning for risks such as ill health, inability to earn income, untimely death, etc. It is also about the transfer of property, either during life or death, the methods used, and the risks associated with those methods.
In 2014, the Enhancing Financial Innovation and Access (EFInA) survey studied household dynamics in Nigeria and listed the financial risk with the greatest impact on household finances to include: serious illness of a household member (33.6%) and death of a relative/household member (27.7%). A household’s biggest financial risks are the “breadwinner” falling ill or dying.
How to protect income, and how to transfer of assets
Let’s start with protecting income. The most common way to hedge against a loss of income is to buy insurance. You can buy insurance to cover your assets; for example, you buy a home or car insurance. You can even insure your home appliances.
Meanwhile, insurance has a cost, that is the premiums paid. Therefore, do not insure what will become obsolete within the lifetime of the cover or pay to insure when the premium is more than the value of the assets. This is simple enough. The main risk here is to choose an insurance company that will pay premiums when the insured event eventually occurs. One of the most important assets to protect via insurance is your ability to earn, this is done via disability and life insurance.
Understanding disability or loss of income insurance covers
Disability Insurance or loss of income insurance covers you in the event you cannot work or perform your current occupation because of illness or injury. Disability Insurance is extremely important for a business with a key owner or single owner, as the EFInA study shows the biggest financial risk to a household is the incapacitation of the breadwinner. Getting disability insurance ensures you don’t lose income when you are sick for a long period of time.
If you’re an employee, There is a new Employee Compensation Act that mandates disability insurance. Ask your employer about this.
Health Insurance is another protection to take, especially as you grow older. For a fixed premium, you’re protected from extraordinary health care expenses that will completely distort your budget. Buy health insurance, put the cost of premium in your cash budget that protects your cash flow should you fall ill.
Let’s talk about Life Insurance
Another way to protect against loss of income is to buy life insurance. The whole idea of life insurance is to ensure the income of the breadwinner is not impaired. This is extremely important. You want to buy a life cover that ensures that your dependents do not suffer a loss of income if anything happens to you. You can also buy a life policy linked to an education option that pays the sum assured towards the education of identified wards. If you have a Retirement Saving Account, then your employer must take a Group Life Insurance cover for you of three times your remuneration. Make sure you identify a fit and proper next of kin and ensure the premiums are paid by your employer.
Now, Let’s Discuss Transfer of Assets
Assets can be transferred from the owner to a beneficiary via many methods. A well-planned asset transfer prevents dissipation of assets. The very first thing to do is to ensure all your assets are properly registered and legal. There are three main circumstances under which assets are transferred;
No Will: This has to do with assets transferred Intestate, i.e. assets transferred without a formal will or instruction of the owner. The assets will then be transferred in line with the governing laws of the state. If you don’t have a will, your assets will be administered and shared to your identified beneficiaries by the court-appointed Administrator. You want to avoid this. Also, not a Next of Kin designation is not enough, be specific how you want your assets to be transferred by writing a proper will.
A Will: Assets can be transferred according to your instructions as stated in a Will. This allows assets to be transferred to beneficiaries according to the wishes of the owner, including the appointment of an Executor to the Will
A Trust: A trust is an arrangement whereby assets are transferred by an individual or a corporate, to a Trustee, to be held by the Trustee for the benefit of certain beneficiaries. Trust can come in effect even when the owner of the assets is still alive, this is called a Living Trust. The Trustee can also be a corporate Trustee.
The cost of a Trust is usually more expensive than a Will. However, a Trust offers the advantage of avoiding Probate, are more private and cannot easily be challenged. Trusts are also more flexible than wills. Other methods to transfer assets are the making of gifts to beneficiaries.
Note that Probate is the Court process by which a Will is proved valid or invalid. When a person dies, the estate must go through Probate. This Probate process is overseen by a probate court.
When you do your Net worth review exercises and there is an increase in your Net worth, always update your will or Trust to capture the new assets.
To close, remember that what you’re protecting is not only your ability to earn money but to protect your budget from extraordinary events. Not buying vehicle insurance, for instance, can expose your budget to irreparably loss should anything happen to your car.
To summarize, from income, you first protect, then create an emergency fund then you can invest.
Question: Have you written a Will or Trust for your assets?
No doubt, electricity from solar energy has received widespread popularity and global adoption with cost of production dropped by almost a half over the last three decades. It is projected that the price of solar power systems will drop progressively in the coming years as a result of the increasing quest for environmentally friendly energy source, “power for all initiatives” across countries and innovative energy sector research enabled largely by massive government subsidies.
Consequently, this article attempts to provide analytical perspectives on the ongoing debate about solar electricity becoming the springboard for bridging the gap of energy need for the poor especially in developing countries.
According to Economic Trends in its October 2019 publication, solar electricity production in the US was subsidised to $43.75 per billion kilowatt hours (BKWH) compared to $1.04 per BKWH for coal, and $0.46 per BKWH for nuclear energy over the past three decades. Even with these massive subsidies, the levelized Cost of Electricity (LCOE) produced by photo voltaic solar remain far lower than outputs from coal sources, while electricity produced by thermal sources is put at 239 percent greater than that of coal. The US is not alone in the metrics for energy sources because in reality, the picture painted above is consistent with experiences in other developed economies.
Despite huge subsidies in solar across countries, solar power accounted for less than 1% of
world’s electric energy source in 2018. It is estimated that replacing half of coal production with solar in the US alone would cost consumers approximately $2.9 billion in generation costs annually. This translates to approximately five years cumulative power sector budget in Nigeria which suggest that we are still far from harnessing the potentials of our luminous weather conditions. In addition, with a total debt profile currently at over N25 trillion ($80 billion) with debt servicing accounting for about 45 percent of total annual federal government revenue, it is increasingly difficult to channel new sovereign loans that targets solar energy development.
Moreover, it is widely believed that subsidy schemes in Nigeria from fertilizers to refined petroleum products and public education over the years are marred by inefficiencies and poor outcomes. Available data shows that, as a share of income, the lowest segment of income earners in Nigeria currently spends about 140 times more than that of the highest quartile of income earners on utilities. It is noted that middle to upper level households currently operate 3-4 independent sources of electricity (discos, generator plants, inverter systems and batteries, solar panels and other chargeable peripherals) in the country. This reality is a metaphor of the deepening spate of inequality and poverty crises in the country.
To illustrate, one of the recent and arguably the most popular market driven attempts at addressing electricity for the poor through solar source in Nigeria is the MTN Mobile Electricity (a.k.a Yellow Box) launched about three years ago. Feedbacks from consumers show an extraordinary drop in users’ motivation for the device and general lack of capacity to sustain the minimum monthly recharge fees of N4,840 (N46,720 per year).
Apart from the approximately N30,000 cost of buying the system, users are required to pay daily recharge fees of N162 over a period of 5 years (1,800 days) before the device will unlock and allow free access without further payment. Our survey feedback confirms that the “Yellow Box” model is yet another less than optimal approach to serve the poorer segment in Nigeria with the much-needed electricity power.
As host of experts continues to converse for replacing fossil/coal with solar in poor nations, available data and compelling realities seem to suggest otherwise. We believe that our quests to join the countries already advocating for clean energy (i.e., stopping the production/use of cars with carbon emissions by 2030 and production of electricity that has carbon emissions by 2035) is legitimate. However, our efforts for now should primarily focus on effective measures and home-grown approaches to lift over 100 million people in Nigeria out of extreme poverty and reduce the rising income inequality.
The built environment has been fraught with challenges of collapse, quackery, substandard materials, abandonment and poor workmanship. Operators say poor policing of the sector and near lack of adherence to laid-down procedures are drawbacks to having a virile building sector. The Lagos State Government, however, says it is considering the introduction of Standard Operating Procedure (SOP) for Ministries, Departments and Agencies (MDAs),
Experts and stakeholders in the built environment are worried. Their concerns stem from the lingering quackery of artisans in the sector. And with building collapse that has plaguing the state, nay, the country, such worries can be understood. Building collapse and other problems of the sector can be said to be seated on a tripod – poor quality jobs, poor quality building materials and lack of competence of most masons and artisans.
Besides, the non-adherence to the Public Procurement Act is believed to be a major albatross for the industry. The Act emphasises competence, appropriate pricing, structured funding, use of standard and quality materials.thenationonlineng
Others are designed to entrench quality, efficiency and safety in line with global best practices.
At a recent summit put together by the Nigerian Institute of Building (NIOB), tagged: “Appropriate procurement methods: Ensuring effective building production,” the body said rising inflation index on resources in the construction industry has led to a reduction in business activities in the sector with inflation impacting negatively on individual’s and corporate body’s purchasing power; and by extension reducing appetite for new projects.
Vice Chairman, NIOB Lagos Chapter, Sunday Wusu, said sound procurement would successfully help in completion of projects on schedule, and at the right cost to stakeholders without recourse to arbitration or litigation.
He called on professionals to see appropriate procurement methods in its true light and recognise the distinction between different procurement methods for different project; that would help in arriving at the best options for each project.
Wusu said: “Appropriate procurement methods when holistically analysed at inception and put to use would undoubtedly help in reducing, if not eliminating cost overrun that culminate from extension of time due to unforeseen mistakes from the various stakeholders on such projects.”
He further argued that appropriate procurement methods when holistically analysed at inception undoubtedly help in reducing, if not eliminating, cost overrun that emanates from extension of time due to unforeseen mistakes.
Wusu further stated that all over the world it is generally believed that the success of a construction project is largely dependent upon the type of procurement method applied. He listed the factors influencing the choice of a procurement model to include project start and finishing time; need to foster control; project size; risk management and price uncertainty due to time consideration and technical complexity.
Others are quality control, administrative complexity, and familiarity of the procurement method.
However, he said no one method has the solutions to procurement challenges, urging consultants and professionals to continually update their knowledge on the suitability of one method over another for projects.
Wusu said attaining building production required design and construction document, including client’s goal for the project and government requirement.
On cost management at site, he said the overall objective is to ensure that scarce resources are utilised to the optimum benefits.
His words: “The design and execution of a project should produce maximum value for money this is because the cost of capital is high and it is only operated for short term.”
Wusu charged his members on the need for fair play. He said: “In contract award, there should be fair play. Price though a significant criteria should not be the sole determinant or even the most important criteria in sensitive projects or in award of contract.
Other factors such as technical, financial and administrative capabilities are major items that should be evaluated at the prequalification stage. It should be given to the qualified bidder whose bid substantially conforms to the requirement set forth on the solicitation documents.
Underscoring the need for integrity in the process, he said: “Due process” policy in contract awards was introduced to ensure the selection of the most appropriate contractor to deliver construction projects as specified so that the best value for money is ensured.
But despite this, project delivery has been characterised by inefficiencies that lead to poor quality, time and cost overrun.
Chairman, NIOB Lagos, Adelaja Adekanmbi, spoke on the need to check corruption and maintain integrity in procurement and construction process.
He said honesty in procurement processes, which should reflect in cost and successful completion of projects on schedule, and at the right cost to all, without recourse to arbitration or litigation, was lacking in the country.
He urged builders to align themselves with procurement methods that would effectively manage time- tasted and value-building production processes according to global ethics.
He stressed that zero per cent accident could be achieved at construction sites if corruption was eliminated. Adekanmbi advised professional to avoid being used by the government or her agencies to perfect corrupt practices. The NIOB chief canvassed time management and sticking to programme schedule in the building process stating that if all these are adhered to the sector will be robust and grow the economy.
When the news broke that Nigeria has escaped the clutches of economic recession, it was good news for hungry investors who were eager to see the Nigerian economy grow again after five consecutive quarters of contraction that started in 2016 and killed their investments appetite.
But the news did not matter so much to the politicians and the Nigerian elite who kept the champagne flowing even more during the economic downturn.
The ‘so called’ good news then did not also matter to the poor masses who do not know the difference between economic recession and boom as they have always been under the pressure of hardship.
For the poor masses, the economy has been in recession ever since because their welfare has never been taken seriously by the government. Worse still, the many promises of good life, jobs, security among others during political campaigns are never fulfilled, especially by the present administration.
Few months after mouth-watering campaign promises were made to the masses, the politicians seem to renege on them and, instead of fulfilling them, government is introducing policies, measures and initiatives that will make Nigerians poorer, while the rich is getting richer.
In two months (January 2020) when the approved increase in Value Added Tax (VAT) rate from 5 percent to 7.5 percent will take effect, more Nigerians with low purchasing power will become poorer as prices of everything will go up.
While commenting on the VAT increase in BBC Pidgin, Funsho Ola-Oju, tax expert at Andersen Tax, expressed worry that the increment would affect the purchasing power of Nigerians, which is still struggling to improve since the 2016 recession.
While VAT increment is yet to take effect, the recent Central Bank of Nigeria’s policy on 3 percent charge on withdrawal and 2 percent on deposit is going to distort business as many hard working Nigerians are not ready to give out 3 or 2 percent of their hard-earned money to a bank that does not carter to their interests, rather the government it serves.
Looking at the imminent hardship, Phillip Ekunem, an economist, observed that the increment in VAT is in spite of the many taxes people and corporate organisations are paying already and fears bandwagon effect. He thinks that the federal government is over-taxing people, while state and local governments are also doing same at their levels.
“You pay income tax, pension deductions, health insurance, land use charge if you are a house owner, pay for security levy in your estate, pay electricity bills, waste disposal bills, power your generator, dig your borehole among others, yet government is increasing VAT. How do they want us to survive?” Ekunem asked.
For Ekunem, the attacks on the poor masses are from many fronts, and sadly unnecessary as the Nigerian economy is still recovering and requires huge spending and not further cutting the purchasing power of Nigerians with anti-welfare policies.
Expressing his fears further, the economist said the states, local government, government agencies and parastatals will also toe the line of the federal government by increasing their respective taxes as well, with the poor masses bearing the brunt.
“What is happening now is a game of ‘we have escaped, let them suffer’ and the suffering group has always been the poor. So, that is why people are doing a whole lot of things to escape poverty. Have you heard the amount our legislators appropriate to themselves just to be sure they and their generations unborn are far from poverty? What about the poor that elected them?” Ekunem queried.
The anti-masses policies seem unending. Yet again, banks and businesses have started deducting N50 stamp duty on every Point of Sale (PoS) service from N1,000 and above. One wonders what the Central Bank of Nigeria hopes to achieve with the directive when depositors are complaining of many charges by the commercial banks.
The intrigue is that customers paying with cash will not be charged, hence encouraging many to go back to the cash system, after the CBN has claimed to achieve success with the cashless policy.
Ekunem said the 50 stamp duty directive is anti-cashless policy. “The Central Bank is confused, if not, why tell Nigerians to go cashless and now introduce something that will make people pay less when the transaction is cash-based”, he argued.
In line with Ekunem, Ademola Oketunbi, an investment analyst and university lecturer, noted that the 50 stamp duty directive is not only anti-cashless policy, but also many steps backward in the financial inclusion target of the CBN.
It would be recalled that a few years back, the CBN set a target of 80 percent financial inclusion by 2020, a target that will get Nigerians who do not bank or do online transactions to get onboard. Then, the apex bank claimed that meeting that target would help in reducing poverty in Nigeria.
With the counter policy, some analysts think the CBN is no longer mindful of financial inclusion and lifting people out of poverty.
Oketunbi explained that it was sad that Nigeria has about 96.4 million adult population, out of which 40.1 million (almost half of the population) are financially excluded in a digital age where ePayment, eCommerce, among other hassle-free financial services, products and banking innovations are trending.
“So, how are they going to get more people to be financially inclusive when new policies are unfavorable to online transactions; it means that if I need to pay someone N5 million, I may resort to cash and withdraw N499,000 until the money is complete instead of allowing the bank to collect 3 percent for withdrawing my money ”, he said.
Looking at the increments in a practical way, Ada Onyeka, a house wife and mother of four, said that it meant she could not buy 10 litres of fuel at N145 per litre at the filling station if she has only N1,450,00 in her account because the amount is not enough and did not cover theN50 stamp duty on POS.
“If my children’s school fees amount to N500,000 and that is all I have in my account, it means I cannot pay through transfer because the bank needs to deduct 3 percent withdrawal charge. So, 3 percent withdrawal charge means I need up to N600,000 in my account for the transaction to be successful. That is a huge burden on parents”, she said.
The increments are not welcome development for the average Nigerian business owner because they are additions to the many taxes and expenses they incur in doing business in Nigeria. It also means increasing prices of goods and services in a country where low purchasing power is impacting negatively on patronage.
The impact is already felt in the hotel business as occupancy has never been stable after recession, leaving Nigerian hoteliers to battle high cost of operation, dwindling revenue amid challenges of doing business in Nigeria, especially multiple taxation, which most of them say is gulping as much as 10 percent of their profit.
According to Obidike Osakwe, a hotelier and member of Hotel and Personal Services Employers’ Association of Nigeria (HOPESEA), apart from VAT, there are over 24 different taxes paid to the three tiers of government across the country amid high cost of daily operations.
Apart from VAT, some of the other taxes include company tax, consumption tax, hotel license, personal income tax, environment impact assessment, parking permits, waste water request, land use charge, radio and TV permit, LAWMA, LASAA, security among others.
“Guests are complaining that Nigerian hotels are overpriced; if the taxes are so much that we cannot operate at profit, we will shut down, and many family members of staff who will be sacked will suffer”, he said.
According to BDSunday investigations, in Lagos alone, over 15 hotels have been redeveloped into real estate and private schools as the profit margins were not big enough to pay all the 24 taxes across federal, state, local governments and agencies, and also sustain the business.
The investigations also discovered that some luxury flats in Ikoyi and Lekki axis in Lagos are empty because of the high rent. With the many charges and taxes from the lean pockets of the masses, more luxury flats, according to MilesAway, a real estate company, will be empty as many tenants would not be able to afford such flats due to declining purchasing power.
He added that companies that were struggling to save cost and stay afloat would not keep their executives in such flats.
Working in construction can open up well-paying opportunities
Although the price of college is soaring and a four-year degree isn’t the guarantee of financial security it once was, 70% of parents surveyed by the National Center for Construction Education & Research (NCCER) said they wouldn’t advise their child to embark on a career in construction. They may want to rethink that.
Not only is there a dire need for the next-generation workforce in the construction trades, jobs are widely available and often high-paying. What’s more, training usually comes with no student debt.
Construction work: long stigmatized
Brian Turmail, vice president, public affairs and strategic initiatives at Associated General Contractors of America (AGC), says for decades, construction and trades jobs have been stigmatized and viewed as a “last resort, instead of a career opportunity that ought to be on the menu to be considered.”
Adds Turmail: “It’s been so impressed upon us that the path to success in the 21st century lies through a four-year traditional college education.”
But parents of teens and 20-somethings should understand that things have changed.
For one thing, the construction industry is desperate for builders, plumbers, electricians and others, because the field is aging. As boomers in construction retire, their jobs aren’t being filled quickly enough to meet the demand.
According to an AGC and Autodesk survey, 80% of construction firms are struggling to fill hourly craft positions, which make up most of the construction workforce. And they expect the problem to continue.
Helping to fill many job openings in the trades
Analysts predict more than 3 million skilled trade jobs will remain open by 2028. A recent survey by the National Association of Home Builders revealed that 69% of its members are already experiencing delays in completing projects on time due to a shortage of qualified workers.
It’s one reason why more than 60 organizations, led by home improvement retailer Lowe’s, recently launched Generation T, a movement to help fill the skilled trade gap and change public perceptions of the skilled trades in America. It’s creating a national marketplace to connect people to prospective apprenticeships and jobs.
Even with no experience, Turmail says, jobs in the trades are easy to come by.
“If you can pass a drug test, if you’re willing to work outside, willing to be part of a team and willing to show up early and work hard, you can find a job in construction in just about every market in this country,” he explains.
For example, the Generation T site forecasts more than 1 million opportunities for carpenters and nearly 650,000 for plumbers over the next decade.
Construction jobs are also becoming more tech-centric, which the industry hopes will appeal to a younger generation and their parents. iPads, drones and robots are regular fixtures on job sites, and some heavy equipment can be operated via GPS and a computer.
Jennifer Wilkerson, director of marketing, public relations and the Build Your Future program at NCCER (a site for parents), says one of the biggest benefits of construction work — that jobs pay well — is also one of the major misconceptions about the industry.
In NCCER’s survey of parents, 40% considered construction jobs to be low-paying, Wilkerson says. But they actually offer high earning potential and room for advancement.
Average salaries (not including overtime, per diem or other incentives), are more than $59,600 for plumbers, $62,400 for HVAC technicians and up to $92,500 for project managers, according to NCCER’s 2018 construction craft salary survey.
Construction career pay enables young people to take on more financial responsibility, Wilkerson says. And when children are financially stable, parents benefit, too.
A Merrill Lynch/Age Wave study found that parents are spending $500 billion annually to financially support their adult children. And 63% are putting their own financial security aside for their kids, the survey said.
“I think parents need to know your kids have a lot of options in construction,” Wilkerson says. Besides learning a broad skill set, they might be able to work their way up to lead a company or start their own business.
To help parents better understand what a trades career can offer, NCCER launched the Build Your Future site, with details.
Paths to construction careers
There are multiple paths to a career in the trades for young adults, Turmail notes.
The most common is taking classes at a two-year college or private training facility after high school and then getting a job with a construction firm. A four-year degree is required for management roles in the industry, like a project manager, engineer or other “khakis and steel-toed boots construction job,” Turmail says.
Another option: participating in career and technical education programs while in high school and then getting hired by a construction company.
Many construction firms offer open-shop apprenticeship programs, which pay workers while they learn, and then hire them. These programs also provide in-house training programs for newcomers.
Union apprenticeships are a viable option in some parts of the country, Turmail says, although only about 13% of the construction workforce is unionized these days.
With a union apprenticeship, a high school grad signs up with a local labor union for a specific craft, like carpentry or electrical, gets paid to learn while working in that field and then finds a full-time job through the union.
Because the industry is “so eager to find folks,” Turmail says, many construction companies now will reimburse the cost of training.
Construction work: happy work
Construction jobs can be psychically fulfilling, too, for young people.
“It’s economics and satisfaction,” Turmail says. “You want your children to get out of the house and be successful and independent once they’re grown up.” A career in construction might punch those tickets.
Plymouth Housing is a forty-year-old nonprofit that provides permanent supportive housing for chronically homeless people in Seattle. It houses 1,000 residents in 14 buildings, a number of which are part of the historic architectural fabric of the downtown area, which the group has taken on the responsibility of rehabilitating or restoring. Last spring, the group launched a $75 million fundraising campaign, with plans to open eight new apartment buildings with homes and supportive services for 800 new residents. Within a few weeks, the group announced — somewhat to its CEO’s own surprise, according to reports — that it had already raised about two thirds of the money. Among the early donors were Microsoft and Amazon, Seattle’s two biggest tech companies, which each chipped in $5 million. Another $5 million came from Steve and Connie Ballmer, who became billionaires during Steve Ballmer’s time as CEO of Microsoft.
Plymouth Housing had gotten support from Microsoft and Amazon in the past, as well as from a range of corporations in Seattle, says Amanda Vail, the nonprofit’s communications and development manager. In fact, the first three big donors to its campaign were local hospitals, which recognize housing as a social determinant of health, and see supporting it as a complement to their mission, Vail says. As Seattle’s homeless population has grown, the whole region has been trying to figure out solutions, Vail says.
“Certainly the tech companies have a role in that, and it’s been really heartening to see them step up,” she says.
Housing has become much less affordable throughout the west over the last several years, and a number of private companies have made high-profile donations to housing efforts. In January, Microsoft announced that it was creating a $500 million revolving loan fund to build and preserve low- and middle-income housing, which some of its own employees have struggled to afford. Wells Fargo announced a six-year, $1 billion investment in June, which will be focused in a handful of cities that are still being selected. Google said the same month that it would put $1 billion into building 20,000 new homes in the Bay Area, mostly by repurposing $750 million worth of its own land for residential use. Airbnb announced a smaller investment in September, committing $25 million to housing efforts in the Bay Area and Los Angeles.
Facebook is the latest. Last week, the company said it would invest $1 billion in Bay Area housing as well, including $225 million in donated land and $25 million for teacher housing in San Mateo and Santa Clara counties. Menka Sethi, the director of location strategy at Facebook, says the investment has been in the works since 2016, when she started with the company. Sethi says the investment is primarily meant to “unlock housing production for units that otherwise wouldn’t get built,” particularly for middle-income residents.
“We’re missing the middle,” Sethi says. “That’s where we feel we can have impact, and that’s where we feel impact is needed.”
The Chan Zuckerberg Foundation, created by Facebook CEO Mark Zuckerberg and his wife Priscilla Chan, had previously announced its support for housing production and preservation through the Partnership for the Bay’s Future. Facebook’s billion-dollar announcement includes $150 million for the Partnership as well.
It’s widely understood that the growth of tech companies has contributed to housing problems in their communities. Tech workers are often well-paid, earning much larger salaries than many other people in the areas where they work. They’re able to pay a premium for the best housing in those areas, which drives up prices across the board. Tech companies’ relationships with their host communities have been tested over housing and other issues.
And their reputations have suffered in other ways, too. The same week that Facebook announced its housing investment, Mark Zuckerberg was getting a dose of bad press related to his testimony in the House of Representatives. Sethi says that Facebook’s investment was in the works for years, and that it has less to do with managing the company’s reputation than with trying to address the housing crisis that affects everyone in the region, in partnership with other stakeholders.
“We can’t be doing this for a marketing or branding initiative, just taking credit for our company,” Sethi says. “We have to do it for the impact.”
On the other side of Amazon’s philanthropic support for housing efforts in Seattle and Arlington, Virginia, where it’s building a second headquarters, was its outright opposition to Seattle’s attempt to fund affordable-housing efforts with a special tax. Amanda Vail, of Plymouth Housing, said she didn’t have a position on that tax or Amazon’s opposition to it.
“Plymouth thrives because we have both government support and support from private individuals and the corporate sector,” she says. “It’s up to the cities and our governments to determine the best balance of how those things come together, but we’re going to need everybody — especially with a problem of this scale.”
Tech companies have already transformed the Bay Area, says Lupe Arreola, executive director of Tenants Together, a tenants’ rights group based in San Francisco. The current wave of displacement being caused by the influx of tech workers is only the biggest, but not the first, Arreola says. It’s good that companies are starting to recognize their impact and invest in housing, she says, but it would be better if they would think about the impact they have before they build new facilities. California requires Environmental Impact Statements for many developments; big companies like Google and Facebook should prepare something like a housing impact statement as well, she says. Those companies also have political influence, and they should use it to advocate for things that tenants are fighting for in the communities affected by their growth, she says, like rent control and just cause eviction protections.
“I think they deserve recognition for doing it, but I think we should also recognize that this is part of their responsibility, and should be something we expect from any large company that comes into a community,” she says. “We should not just hope for and celebrate it but actually expect and demand it, and the government should as well.”