Investors task Buhari on Land Use Act, special interest rate for housing
As President Muhammadu Buhari sets to constitute his cabinet, which is hoped to give direction to his economic policy, investors in the real estate sector have tasked him on the need for the review of the age-long Land Use Act and coming up with a special interest rate for housing loan.
The investors contend that acting on these two factors will have positive impact not only on the real estate sector, but also on the economy as a whole, describing the Act and the high interest rate in the open market as twin evils that have held down growth of this sector for too long.
The Land Use Act enacted by the military government under Olusegun Obasanjo in 1978, which vested ownership of land on state governors, has worsened land administration in the country, making access to land for either homeownership or investment purposes very difficult for the citizens.
Buhari’s re-assurance during his visit to Ghana on Monday that he would set up his cabinet before the end of September has raised expectations that a number of fundamental policy decisions would be made with a view to stimulating the economy.
“I think the new administration has brought an attitude of change. So, we expect things to move in the right direction. For us in this sector, we expect the president to address two basic things. One is the Land Use Act which we want the new government to look at and amend, said Edward Akinlade, the Group Managing Director of Suru Group Limited.
Akinlade added that the government should get the interest rate down, especially for real estate, to a single digit, believing that if real estate is funded well, it will create wealth for the economy and will also translate to small and medium enterprises (SMEs) which will generate revenue for the government.
There are extraneous factors that make real estate development difficult and Akinlade cited example of taxation in Lagos State particularly where, he said that “as a developer, you pay tax on land, to surveyor general’s office, to omonile, for environment, transportation, infrastructural development levy etc”.
According to him, the new government should create enabling environment for investors and Akin Oladiran, the acting managing director of Vitapur Limited, believes that with the enabling environment in place, the housing deficit in the country would be reduced significantly.
“Such enabling environment includes available policy on land, housing, finance, affordable building materials, appropriate institutional framework and sustainable construction workforce. Government should create a platform for long and short term fund for real estate and establish infrastructure development bank”, he advised.
Oladiran disclosed that Vitapur had been positioned to serve as a unique solution to housing deficit in Nigeria, explaining that since its commencement of business in 2010, the company has undergone a robust transformation, leading to its acquisition of state-of- the- art sandwich panel plant, which has increased its capacity utilisation by over 300 percent.
As President Buhari looks through integrity prism to select those that are to work with him as ministers, Bode Adediji, former president of the Nigerian Institute of Estate Surveyors and Valuers (NIESV) has charged the president to avoid the mistakes of the past regimes in appointing the minister for housing, noting that certain ministries were critical to the economy.
“For sectors like Agriculture and Housing, Buhari should put people who know the sectors well and are committed to them. For housing, I urge the president to put professionals from the built environment comprising architecture, estate management, town planning, land surveying etc; look for professionals who have practical pedigree in production and not rent seekers,” he advised.