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Housing sector can’t develop without mortgages – NIESV

By Jude Njoku

… To brainstorm on infrastructure development at Benin confab

There is no way the housing sector can develop without mortgages. And there  is no way the mortgage sector can develop without a reform of the land tenure system because ultimately, those who give you mortgages must rely on something as a collateral and the most important thing they can rely upon is land”. This view was canvassed by the President of the Nigerian Institution of Estate Surveyors and Valuers, NIESV, Mr. Emeka Eleh at an interactive session with newsmen last week.

Eleh who described land reform as key to development explained why this is so. “The issue of land  reform is key for us because it is a source of wealth for everybody. Everybody has access to land in one form or the other and unless you are able to tap into the potentials of the land that you already own, then you cannot develop. If you look at the Western countries and imagine how they developed, it was not by magic.

“They were able to leverage on what they have and that is why a mortgage on a property is the single most important way that anybody can raise money in the United States of America.  That is not the same case here , so we feel that reforming our land tenure system is key to development. It will help boost the economy, it will help create wealth, it will help the Agric sector which is key .  I remember four years ago when Saraki was still the Governor of Kwara State, he brought in Zimbabwean farmers to come and man the farms in Kwara State.

Gooluck Jonathan Estate in Abuja. (Credit Channels)
Gooluck Jonathan Estate in Abuja. (Credit Channels)

“Somebody asked, why wouldn’t the Zimbabwean farmers be happy because they were brought in  and given acres and hectares of land and they were given title to the land, whether it is for 20 year lease or 30 year lease, they were given titles. Compare them with the average farmer in Kwara State, what do they have? They have hectares and hectares of land without title. But the man you have given title, will go to the bank and raise money for his business and so they were immediately put at an advantage over those who own Kwara State who didn’t have a title,” he explained.

The NIESV President who stated that  title creates a wide gap between equity and inequity, noted that  the Land Use Act failed because it couldn’t ensure equitable distribution of land to all Nigerians . “Equity means we must be put at par but where he has title and I don’t have, then there is no equity. Therefore, one of the most important aims of the Land Use Act failed because of lack of title.  And If you look at every other issue that has to do with housing, access to titled land is key; it is liquidity which you can use to raise money for your business. Look at mortgages,  my view is that Government has realised the fact that you cannot develop the housing sector without mortgage. We have been saying it for a long while,” he said.

Continuing, Mr Eleh said: “Right now the Government is doing a lot to revive the mortgage sector. They now know that cannot happen if they don’t reform the land tenure system.The Presidential Committee is working hard on the land reforms agenda and the Federal Ministry of Finance is working hard to revive the mortgage sector”..

Noting that housing is so key to development, Mr Eleh posited that housing does not only provide shelter and enable us to conform with the Millennium Development Goals, it has a lot of multiplier effects.” If you look at the multiplier effects of investments in housing, the fact that there are too many linkages in the housing sector, if you go the to average construction site, you will see suppliers of sand, suppliers of water, those who sell food, those who supply rods, the artisans who work, the plumbers, all these people get paid.  At a recent event in Abuja, the Minister of Housing said that for a three-bedroom bungalow, the evidence shows that at least 70 people will be employed on the site. So, imagine if it is a massive project that is being done.

So, when we talk about housing, it is not just about providing shelter, it is because of the other linkages that the sector can engender to enable us achieve what we want to achieve as a nation because if you check the western countries, the collapse of the world-wide economy, the depression we are having right now, arose as a result of the collapse of the mortgage sector in the United States of America and Europe. Once that sector collapsed, the economy collapsed, which is why again the US and Europe keep monitoring the housing sector,” Eleh clarified.

On how the government can jump start  the housing sector, Mr. Eleh offered this piece of advice. “One area is land reforms, the other is to reduce the interest rate. The government has said that what they are working on what they call  mortgage liquidity company because they feel that (I don’t agree with it) the supply end of mortgage  fund is more important.

… To brainstorm on infrastructure development at Benin confab
President Goodluck Jonathan is expected  to declare open the 43rd Annual General Conference of the Nigeria Institution of Estate Surveyors and Valuers, NIESV slated for Benin City, the Edo State capital on March 14.

President of NIESV, Mr. Emeka Eleh disclosed this at a meeting at an interactive session with journalists, explained that  Edo State Governor, Comrade Adams Oshiomhole and Minister of Lands, Ms Ama Pepple will also grace the opening ceremony.

Eleh explained that the choice of the Conference theme, ‘Infrastructure Development and Economic Empowerment’ was informed by the need to open the transformational conversation in the housing and property sector to experts in diverse professions.

“We are going to Benin to discuss development of infrastructure that will engender empowerment and to ensure that the topic is properly resourced. We are looking beyond our members to throw the conference open to other professionals so as to have diverse perspectives to the conversation”, Eleh explained on the choice of speakers at the conference.

The Conference lead speaker is a former Minister for Education and member of former President Olusegun Obasanjo’s Economic team, Mrs. Oby Ezekwesili. Other speakers include Dr.  Mansur Ahmed, the Director General of the Infrastructure Concession Regulatory Commission, Mr. Adekunle Oyinloye, the Managing Director of Infrastructure Bank Plc, Dr. Christian Oboh, the Managing Director of Niger Delta Development Commission, NDDC and Dr. B. J Patunola-Ajayi, the second vice-president of NIESV.

The NIESV President said over 2000 members of the Institution have registered to attend the conference which he said will attract some 5000 delegates from across the country. The conference which opens on March 13th will end on the 16th with a Gala Dinner.

High Points
•Government should intervene directly in the housing sector as it did in other sectors

•20 percent interest rate on housing is not sustainable; Government should lend to the banks at 6 percent for on-lending to end users at 9 percent

•Land reform is key to development because land is a veritable source of wealth to everybody


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