The Managing Director of Lekki Gardens, Mr. Richard Nyong has listed some of the key problems facing major developers in housing industry in Nigeria and Lagos in particular.
Top in the list according to him include access to approval, vague government policies, flooding of substandard materials, review of 1978 Land use Act and deep pocket funding access at affordable interest rate.
Explaining more in an interview, Ntong said “You can’t run away from issues like approval, unclear government policies on a lot of issues or the unstructured nature of real estate in Nigeria, where there is no clear guideline or support on the materials you access”.
“You have to buy sand, for instance, from an unstructured vendor; government policy can shut him down and you are left stranded and you have to explain to clients. Cement suppliers can raise prices and everyone will adjust to it. So, there are unstructured and inconsistent arrangements for sourcing materials.
Ntong also noted that there is also the unskilled nature of artisans.
Continuing, he said “There is also the issue of access to funding; the more you can give good funding to clients, the more they come. If the interest rate is three per cent, mortgage will thrive because you can take a 20-year mortgage and pay little”.
“Interest rate is 19 to 20 per cent and the banks have a spread of four per cent; so the interest is 25 to 30 per cent. Who can pay that on a mortgage? So, there is the crisis of a structured environment.
“I want to tell that there are still issues around land titles in many states even though their governments may tell you that the time you spend in getting titles has reduced.
There are a myriad of challenges coming around the same time. There is no clear structure from end to end that enables people to deliver; a lot of gaps occur when you say you will deliver a project in 14 months and 90 per cent of the time, it extends to 24 or 32 months. Then, there is the legal system that doesn’t enforce rights quick enough. But I always tell people that as a business, you are bound to create value in the midst of challenges and our work is difficult but we are not afraid to deliver.
