Against the backdrop of the dearth of funds to finance the construction of projects across the country, promoters of the proposed Construction Development Bank have upped efforts to get the specialised bank licenced before the end of this year (2011). Already the name of the proposed bank has been changed to Infrastructure Development (Construction) Bank and more interest groups invited to participate as core investors.
Disclosing this to Vanguard Homes & Property, the President of the Association of Professional Bodies in Nigeria (APBN) and leader of the proposed bank’s facilitating team, Mr Segun Ajanlekoko wondered why the Federal Government is trying to revive the Urban Development Bank which failed to deliver on its mandate instead of supporting the licencing of an Infrastructure Development Bank.
“Are the banking institutions placed to help Nigerians finance housing or infrastructure? I went to an occasion where a former managing director of a commercial bank said the way to solve the housing problems in Nigeria is to set up a Construction Development Bank that can tackle housing which is a specialised area than the present day commercial banks. Unfortunately, the Government has not cared to support it as much as they should. They are still tinkering with Urban Development Bank that has failed in the past; they are setting it up again and they do not know that it is only when you have a private infusion into the existing system that it can function well,” he noted.
Giving an update on the proposed specialised bank, Mr Ajanlekoko who is a past president of both the Nigerian Institute of Quantity Surveyors (NIQS) and Africa Association of Quantity Surveyors (AAQS) said: “ We are working on a lot of positive milestones being achieved and I believe that in no distant future this year, that Bank will come on stream. We have actually gone ahead and moved from calling it Construction Bank to Infrastructure Development Bank and that has helped to open up wide opportunities for funding to come in”.
On the minimum capital base required to licence the Bank, Ajanlekoko said the recent reduction of capital base for specialised banks is working in its favour. “We are lucky because the Central Bank of Nigeria (CBN) has reduced the capital base. But to operate, we need a huge working capital but the take-off for specialised banks now is about 10 or 15 billion Naira. So, we don’t need to look for N25 billion. CBN has changed the rules,” he said.
Ajanlekoko explained that the scope of stakeholders involved in trying to get the bank licenced is being widened. Initially, the Construction Bank was the brainchild of the seven built environment professional bodies. “ It (promoters) is being widened to take interest groups; those who feel that they are stakeholders. You cannot limit infrastructure and housing to just professional groupings. There are a lot of people who are interested in its formation and so we want to capture those who have shown interest beyond mere professionals,” he said.
The APBN boss who said the promoters expect to inject a large pool of offshore funds into the proposed bank, regretted that efforts to have the Pensions Commission (PENCOM) invest part of the huge funds at its disposal into the bank failed. According to him, a letter written by the promoters to PENCOM to this effect was not even acknowledged.
“If a government is elected to look at the welfare of its people, their priority by my own reckoning should be to improve the lots of the people. If policies are being enunciated, how do I use those policies to achieve the objective of creating the comfort of my people? Yes, there is a large pool of funds from PENCOM which you think that if government is thinking right, the best place to warehouse such long-term funds is in a place like Infrastructure Construction Bank where we know the project is as good as assured.
The money cannot be frittered away because it will help to meet your long-term objectives of having returns and even multiplying it and having it properly secured. But we have not been able to penetrate as much as I thought we could. Knowing fully well what the objectives of the Construction Development Bank are, we wrote to PENCOM and said, let’s partner but nothing was heard from them. Most of the funds would have to be externally sourced but it is unfortunate that government does not see this entity as a vehicle to use to enhance the citizens’ welfare,” he lamented.
Meanwhile, the APBN President has called for a total overhaul of the nation’s housing policies if the dream of providing shelter for the over 20 million homeless Nigerians would be actualised.
The APBN helmsman who was the guest speaker at the 1st Management Day organised by the Nigerian Institute of Management (Chartered) stated that issues of Materials policy, effective mortgage system and easy access to titled and registered land are of paramount importance. “Nigeria is still seriously deficient in housing stock while the cost of acquiring one is exhorbitant and out of the reach of the ordinary Nigerian that constitute over 80 percent of the population… A vibrant housing policy and effective implementation is a major tool that can easily be used to effectively support a realistic national growth in all its ramifications,” he noted.
Elaborating on this in a chat with Vanguard Homes & Property, Mr Ajanlekoko declared: “Shelter occupies a pride of place because every human endeavour is to own or have a roof over their heads and we know from statistics that we are deficient by almost 20 million houses. We have proffered solutions here and there which unfortunately Government has not taken seriously. I hope that when the new government takes over, we can all focus on how we can improve the housing stock of our people. We have to look at the Materials Policy. How many locally made materials can we boast of if we want to have mass housing? We have about 80 or 90 percent of imported building materials in this country; that can never let us build affordable housing. Affordable housing means we look at how we can use local materials or produce locally, those materials on a mass scale and we must think of the future, not now. The problem with Nigeria is that we are always thinking in the short run, we must have a global long-term policy that can address housing issues”.
He also called for a total overhaul of the Land Use Act. “One of the greatest assets of any nation is the land freely given by God. It will remain an asset only and when the potential is unlocked for creation of wealth. The present land management situation in Nigeria is primitive and unfriendly to investment and meaningful development. A major review of the land use is very urgent and paramount. The legislators have not come to terms with the fact that this is important because when you are able to have ownership title, it is as good as gold. You can now at least be able to start your own business because with ownership title, you have access to capital and what the western world has done to increase their economic power is that people who have title can have access to funds. So, we need to do a wholesale overhauling of the Land Use Act. I hope that when the new government takes over in May, we would have a focused and greater attention given to housing,” he said.