ARE you looking for land or property to buy, lease or rent in Ikoyi, Victoria Island or similar highbrow neighbourhoods in the country? What currency do you have for the transaction? If you have the local currency (Naira), you had better change the money to the US Dollar, Pounds Sterling or Euro because most property transactions in these areas are now carried out with the more stable foreign currencies.

Although the Central Bank of Nigeria (CBN), had a few years ago, frowned at the practice of carrying out such transactions in foreign currencies, Vanguard Homes, Property & Environment learnt that the directive was observed more in breach as most clients, wary of the fluctuations in the Nigerian currency market, prefer to collect their money in dollar, pounds sterling or euro.

Mr. Kolawole Diya whose firm Diya Fatimilehin & Co is coordinating the sale of the multi-billion dollar Eko Atlantic City Project being reclaimed from the Bar-Beach in Lagos rationalised the decision of the developers to ask prospective investors to pay in hard currency. Depending on the location, a square metre of reclaimed land at Eko Atlantic sells for between $860 to & $1500.

According to Diya who spoke with newsmen at the project site recently, the fluctuations in the value of the Naira necessitated the decision to “dollarise” the payments. He noted that most landlords in the highbrow areas prefer to collect their money in foreign currencies because, if for instance, you paid an annual rent of N600,000 for a serviced flat and the landlord increases the rent to N1million after  two years of tenancy, the tenant cries foul, not considering the fact that the value of the Naira when the tenancy was negotiated, had dropped badly.

President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Bode Adediji who reacted to this development, attributed it to what he called the “disequilibrium in the demand and supply market in the past”. But he was quick to point out that such a scenario may not be applicable now that things are getting normal. His words: “These anomalies are as a result of the disequilibrium in the supply and demand market in the past but now that things are getting normal, I don’t see that continuing. No landlord will insist on being paid in dollar now when you have tenants who are ready to pay in Naira”.

Apartments like these have been dollarised in Ikoyi.

Another estate surveyor and valuer, Mr. Kunle Awolaja explained that most of the dollar-denominated properties are those acquired by expatriates and international companies adding that clients feel more secure when they collect their money in hard currency because the Naira can fluctuate at any time.

Awolaja who is the Assistant National Secretary of NIESV noted that clients when pressed, would collect the Naira equivalent of the dollar because they still have to go to the foreign exchange market (Forex) to change it. Awolaja stated that although there is a subsisting CBN directive against this practice, many Nigerians prefer to flout the order.

Also reacting to the same issue, Mr. Stephen Jagun who heads the Facility Management Faculty of the NIESV, offered similar reasons for denominating the sale/lease of many properties in dollar. “Because of the fluctuation in the value of the Naira, most people prefer to transact their property related businesses in the more stable currencies.

The target is usually expatriates and foreign companies because it is easier for documentation as most of these companies do their accounting in dollar. If they use the Naira, chances are that it will fall in a few days time necessitating a change of the figures in their books again,” he said.

But Jagun is against this practice. “As far as I am concerned, there is no justifiable reason to pick the dollar as the currency of transaction. Our currency in Nigeria is the Naira and not the dollar; we should therefore be proud of our money. If clients pay in foreign currency, we can convert it. I am totally in support of using the Naira,” Mr. Jagun who noted that some retail/wholesale shops are also asking to be paid in dollar, said.

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