Investments, home-ownership schemes setback by decaying roads

A good number of real estate investments and homeownership schemes are being abandoned in the suburbs of Nigeria’s major cities, especially Lagos, on account of decaying roads which make access a nightmare.

Nigeria has high level infrastructure deficit and a significant proportion of this is in roads, especially federal highways which link the cities to towns and villages on the one hand, and the country to neighbouring countries on the other.

One of such highways is the Lagos-Badagry Expressway, a long stretch of road that links Lagos to neighbouring West African countries, including Benin Republic, Togo and Ghana.

Concerned about the terrible state of the expressway and in consideration of its strategic economic importance, the Lagos State government in 2009 embarked  on the reconstruction and expansion of the expressway from four to ten lanes, with a light rail track, creating hope of accessibility and positioning it as a destination for homeownership schemes and myriad other investments.

Today, the road project which was seen as a major development to improve regional trade between Nigeria and the countries of the West Coast, seems to have been abandoned, while over 60 percent of the entire road stretch has collapsed, trapping billions of naira already invested in real estate by institutions and individuals in adjoining towns and settlements.

Kehinde Adebayo, an insurance broker, told BusinesDay that he remains a tenant where he lives at the moment, two years after building his own house, explaining that he was one of those who saw the need to take advantage of the reconstruction and expansion of the Expressway.

Adebayo is not alone in this dilemma because apart from real  estate developers who raised money and invested in acquiring land with the intension of reselling same and turning a profit, many companies also relocated to the Agbara axis, hoping to leverage the road expansion to enhance production.

Some of the estates on this axis which are presently struggling include Teju Royal Garden, being promoted by Multi-Purpose Infrastructure Development and Construction Company (MIDC) Limited; Honeydew Estate, developed by Next Dimension Properties Limited, Sparklight Estate and Agbara Estate Phase 11, among others.

Because of the distortion on the road and the ditches which have taken over the remaining part of the expressway, traffic gridlocks have become a definitive feature of the expressway and Adetokunbo Ajayi, the MD/CEO, Propertygate Investment and Development Company, says this is destroying human health and eroding the value of properties.

“Apart from the impact on the health of commuters, the gridlock also affects value of assets”, he notes, adding, “we cannot possibly quantify the cost, but in addition to loss of promotions in offices and asset degradation, the anarchy on our roads, resulting from failed portions, also curtails development activities in these areas because people avoid such locations”.

Before the present economic downturn, Nigeria was the second most expensive real estate market, after Angola, where housing is unaffordable to well over 60 percent of the country’s 170 million population.

Housing development is concentrated in city centres for reasons that include availability of critical infrastructure,  purchasing power, effective demand, security and higher profit margins, and such developments are generally targeted at the upper class buyers and prospective tenants.

Medium and low income earners who cannot afford what is on offer at the city centre and are desirous of owning their own homes, find their way to the suburbs, where property prices and rents are relatively cheaper.  This class of people are the major victims of the collapse of road infrastructure in Nigeria.

CHUKA UROKO