The former Managing Director, Ogun Property Investment Corporation (OPIC) and Chief Executive Officer, Octo5 Holdings Limited, Babajide Odusolu, has sued for a speedy reform of Nigeria’s housing sector, as he also urged the Federal Government to provide social housing developers with incentives to quicken the provision of low-income housing in the country.
Odusolu, who spoke in an interview with the Guardian revealed that despite Government’s insignificant support for the real estate sector, it was one of the primary drivers of Nigeria’s surprise exit from the recession.
Citing one of the National Bureau of Statistics records, he noted that “trade, telecommunication, agriculture and real estate drove Nigeria’s exit from recession. In fourth quarter, 2020, real estate contributed 5.7per cent to national gross domestic product, making it one of the top eight positive contributors.”
“In other economies with a deliberate and well-articulated policy designed to stimulate and grow local consumption, the real estate / housing sector is recognised as a primary trigger and value sector”, he added.
The real estate expert highlighted lack of favourable policy and enabling environment as major impediments to full real estate growth in the country, urging government at all levels to “provide long-term flexible support for credible, proven developers; provide fiscal concessions to drive down cost of construction materials, especially steel; cables; cement and aggregates; and provide fiscal incentives for developers to invest in primary infrastructure (which most of credible proven developers already do).”
He expressed deep dissatisfaction over the Nigerian banking sector’s reluctance to fund genuine real estate projects, saying “those that did, funded the upper end and are forced to carry stock; very few invest or support the middle market, which is the source of the bulk of true demand.”
Sharing his view on the need to review the nation’s Land Use Act, he said it’s important that the Government provides better and digitised land title registries, while consent provisions should be amended and made less cumbersome.
On the reforms needed to reinvigorate the scheme, he said: “As one of the pioneers of sites and service schemes in Nigeria and having done it successfully across both private and public sectors, my response might sound rather surprising.
“Sites and service are credible and good tools for wealth protection and aggregation, but very poor solutions for addressing the housing supply gaps. By its very nature, it essentially increases scarcity of viable land banks, which is a critical tool for addressing housing deficit.
“But the solution would have been for governments to invest in creating these layouts but most cannot afford the cost. So, the solution again is to create fiscal incentives to motivate developers to invest in social housing. If governments introduce such options, including tax credits, credible developers will be highly incentivized to create inclusive communities with social housing components.
“An institution that used such variant to address its needs is the RCCG Camp, which is a massive city developed by incentivizing individuals to develop and cede units to the church rather than buy the land.”
