Why cost of developing properties is high in Nigeria—Ogbonna

on   /   in Business 12:20 am   /   Comments

By Moses Nosike

Chief Solomon Ogbonna, is one of the foremost building developer in Lagos, particularly Lekki/Ajah axis, where he has developed a lot of properties with first class building materials equal to international standard. In this interview with Moses Nosike, he reveals why cost of developing properties is high in Nigeria, blaming government for its inability to promulgate housing policies that could enable the masses afford and own houses in Nigeria. Excerpts:

satbusinessWith your experience as a developer, what can you say about building development in Lagos, Nigeria?

I would not have much to say, only when you look at building in development in Lagos, you would find out that much has been achieved especially in Lekki axis. For instance, in 1991 when I came to Lekki area, at Ajah where I built my house, a plot of land was sold N60,000 at Ado road.

A two plots of land say 120 x 60 was sold for N120,000, but today it goes for N15m and when you come to Lekki Phase I as at  1989 and 1990, a plot of land was sold at 2.5m, but today, it goes for N100m or N110m depending on the site of the property. So, development in these areas have risen that you can’t even compare it to Abuja and other states.

However, one of the challenges in developing properties these days is that it takes time before you sell them. A plot of land with cost of development could cost you N45m and you are looking for N55m, that could take you one year or more before you can see a buyer. Again, it is capital intensive so, you don’t always rely on it to meet your daily needs, you still have to be doing other things for supplementary.

Do you think government, developer have role to play to ensure that cost of developing properties is reduced for the masses to afford it?

Well, the death of Mandela should be a lesson to our leaders if they want to learn. It shows that we are pilgrims on earth, so one day whether we like it not, we shall leave the earth.

In terms of reducing the cost of  building development in Nigeria, our government is not helping matters at  all. They are concerned in building estates for their class of people and giving it out for N35m to N40m for a three or four bedroom flat. With such amount, how many civil servants or individuals can afford it.

So if government had  made it affordable for the masses, even the cost of building materials will go down. For instance, what Jakende did in Lagos for both the rich and common people. People were able to afford flats then.

But not with this government that builds for their friends, commissioners and fellow excellencies. It is high time government started building for the poor masses of this country. We have the resources to do that, Nigerians are in need of accommodation.

We’ve had several building collapses in the country with much accusation on developers for using inferior materials, what is your take?
For me, there is individual differences. There are some people who always go for the best quality materials either in clothing, building and other things they do.

For instance, if you want to develop a two storey building and you have a concrete foundation with about 9mm iron and with nothing less than 4ft foundation and you cast it with a hardcore, I tell you there is nothing like collapsing after building. Most times people complain of the materials used but I don’t see materials as the problem.

Sand, water, iron and others are natural things, but it depends on the quality the builder applied. Some developers want to be economical in material usage because they want to make enough gain after building having in mind that they would not be the one to live there. So, the foundation and decking is the real building not the beauty of the structure.

If you develop a building without a solid foundation if it collapses tomorrow, you will lose. The challenge is that sometimes people get away with all these things because they are connected. In countries where rule of law is active, such developer will face the music. Most building I’ve developed I didn’t joke with their foundation because that is the primary thing needed with developing a property.

Major challenges of developers…
Five, six years, developing properties were easy because banks were assisting developers with credit facilities with considerable interest rates.

But today, reverse is the case. You hardly can get a loan from banks, the conditions are unaffordable except you are close relations of big business people that have made it. Those big transport owners with 100 luxuries, 200 lorries they are the ones banks consider. They don’t give money to small business owners, they feel their money is more secured with big tycoons.

They forget that those big ones started with little. Before now I used to obtain bank draft with my bank. So developers provide every of their capital by themselves.

In Nigeria today, nobody thinks about merit, but position before you got anything. Until you belong to their clicks you can’t benefit. They don’t think about the future.

How do we move housing development forward in Nigeria?

Like I said, banks should be giving loans with low interest rate so that cost of developing properties would reduce and at the same time, the  masses can afford it. For government, I always say they know what to do because most of them were poor and experienced what common Nigerians are experiencing today.

Some of them didn’t acquire good certificate before they joined government. Years ago, when you complete your school certificate, companies will employ you. But today with your degree and masters you hardly can get employment.

They prefer to use cheap labour with school certificate holders to do the job. Nobody is ready to build affordable houses for the masses in this country. Government can build a low cost housing where an average Nigerian can pay N2000 per month. And those with steady income can own a house through installmental payment.

In Libya and other countries governments develop a good housing policies for their citizens and execute it and citizens own houses at reduced rate. Nigeria is a place where people don’t listen to their conscience.

A country where people in government own 200 houses in prime area of cities and he is not concerned about his staff who live in boys quarter without water hitter during harmartan. How do you expect somebody who has not cared for his workers to think of building for others?

Your recent project…
I have concluded two storey buildings within Lekki. I also have buildings in Yaba and Ikeja, and I have more land for sell.

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