Babatunde Raji Fashola (SAN), Minister of Works and Housing in this interview with John Osadolor, Onyinye Nwachukwu and Chika Otuchikere speaks on many issues affecting the works and housing sector of the nation’s economy including the novel Highway Development and Management Initiative (HDMI), mortgage financing for affordable housing, his achievements and plans for the future. Excerpts:
In five years you have been here, what would you highlight as your key achievements?
I think the place to start is to understand that governance is a slow burning fire. There’s a lot to do, there are many things to tick off. First, we have brought well over 13,000 kilometres of federal roads under repair, rehabilitation and reconstruction. There is a road project in every state, there is housing or civil work in every state.
We have completed over 4000 kilometres of roads out of those 13, 000, and we are adding more and plan to complete more. We are finishing the roads in sections because they are long. You won’t see ceremonies, but you will see our footprints, you will see road signs, you will see lane marking, you will see bridge renovation and bridge repairs, you will see completed housing projects, you will see housing projects under repair, you will see bridges under repair; 37 of such bridges.
We are also inside schools; federal tertiary institutions, delivering new roads or reconstructing old ones. Through the Zonal Intervention Programme we are in hundreds of communities, we deliver thousands of programmes based on request by parliamentarians to their constituencies, so, you will see thousands of street lights especially solar. That is increasing the footprint of our solar energy in the country, we are compiling now the total quantum of renewable energy that has been installed in that size.
However, on the zonal intervention we have provided thousands of borehole projects to people who had to go to rivers in search for clean water. The boreholes have proved very prolific in providing running water in those communities. So, for those who continue to heat up our country, what they should do is to go round and really go and see. But more importantly, all of this infrastructure, what is it doing? What it does is to make me and my team happy because as we do that, a lot of people can get up in the morning and say they’re going to work either as suppliers, transporters, builders, engineers, consultants, estate valuers who help to evaluate compensation, laboratory technicians who work in construction laboratories. People may not know it, every road project in this country has a laboratory where we test equipment, where we test material, soil, sand, cement, iron rod, water that we use for construction, and we have people employed there. So, contributing to all of this really for me, is a matter of some immense progress, I am encouraged by them, it’s not finished yet.
Are you worried that we still have this huge infrastructural deficit despite these works you have done?
Well, I was going to ask you to be specific about the deficit you speak, but since you’ve spoken about the road, I think that it is important as a medium of information and education, we all get it right. Even the most developed countries are still expanding their infrastructure and they are doing so because of increasing human activity and demand. So, that’s not unusual. We all agreed that for a significant period of time we didn’t invest as much in our infrastructure. So, it all comes up at the same time. And really, the comfort we take actually is that people are asking us to do more, that’s comfort. We don’t feel burdened by it, we see it as a vote of confidence in our ability to do it because if they had any doubt that we could do it, they won’t ask us.
However, the resources will never be enough. So, just as you have to manage in your own home and set priorities, we have to set priorities too. We wish we could do everything, but we can’t do everything. And as I said, I don’t remember when last Nigeria simultaneously was executing 13, 000 kilometres of repair, reconstruction and rehabilitation of the road network. Maybe the closest to it was during the PTF under the same president. I don’t remember when last Nigeria was doing bridge maintenance on 37 bridges across Nigeria. I know how many letters I wrote as a governor to the federal government then to come and maintain their bridges in Lagos, nothing happened. We have started the Third Mainland Bridge I think in 2010, but they could only go that far, we have completed all of that now. We are on Falomo Bridge, we are on Independence Bridge, and we have done Ojuelegba Bridge because Lagos has the most bridges in the country. We are on Chanchangi Bridge, we’re on Konto-kafi Bridge, we just awarded Langtang-Wase Bridge, we are constructing Ikom Bridge, we are on Loko-Oweto Bridge, and we have just awarded Iddi Bridge connecting Benue and Taraba States together. We are repairing Tantawu Bridge, we finished that in Niger State, Tamburawa Bridge in Kano, and we are also repairing. We are continuing to maintain the Niger Bridge, you may not see it, it’s happening under water. We will keep it under maintenance, the Isaac Boro Bridge in Rivers State. So, all of this is going on, and when your population continues to grow, clearly, there will never be enough. So, if you are a family and every three years you bring twins, you have to keep expanding the house, you and your spouse. As we are talking now, a new child has been born somewhere, so you have to prepare for primary school, for the water he’s going to drink, for the school he’s going to go to and so on. It never ends.
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Let’s look at the Second Niger Bridge. Are we still going to have it completed within the stipulated time, if we remove the effect of the COVID -19?
The project is on course. I think that about two weeks ago, all the governors of the southeast were there, all of you saw it. So, don’t lose sleep over Second Niger Bridge, it’s done. We will finish it hopefully on schedule. Yes, we lost some time because of COVID-19, nothing will change, maybe a few weeks here and there, reflective of the time lost on COVID-19 and the time we lost to some of the other distractions like EndSARS protest, otherwise, that project is on course and should be delivered as at the time we promised, 2022.
How much of an issue has finance been?
Finance is an issue anywhere in the world. There’s never enough money; even in your house. Finance is an issue anywhere in the world but we have to commend first, the leadership that the President has brought, the support he has brought, and the hard work that the Ministry of Finance, Budget and National Planning is doing in very difficult times. I say very, very proudly that we have been doing a lot more with a lot less. I say that very, very confidently. You know when people evaluate us and they compare us to countries in Europe, you just do a quick check; how much did the United States federal government spend on infrastructure in 2020? $63 billion directly. You know how much that is, N25 trillion, more than our national budget. That’s how much the federal government of the United States spent directly. They now supported their state governments with $83 billion. That’s N33.6 trillion. So, if you add the two together, in 2020 they spent N58 trillion. What’s our budget for 2020, the whole country, N13 trillion, that’s all. So, they spent five times our national budget on infrastructure alone. The comparisons, we take it as aspirational but the resources are just different. But as I said, government and governance is the act of the possible so we will continue to do what is possible given the resources available.
Your ministry plans to concession 12 federal roads. What informed that decision and how will this be different from others in the past?
Well, it’s a good question that follows from lack of sufficient fund and so, we are responding to some of the challenges that have been thrown at us. If you look at our Ministerial Performance Mandate which we signed at the second term of the Buhari- Administration by each ministry, one of the challenges was to look for alternative sources of funding for construction, rehabilitation and maintenance of federal highways. So, that’s what led us to the Highway Development and Management Initiative (HDMI). There are two tracks to it, one is the Value Added Concession, and the other one is the Unbundled Asset Approval in that case only commercial assets on the highway rather than the highway itself is concessioned. But we decided to start with 12 highways and those represent roughly 1900 and something kilometres out of 35,000 kilometres of road. So, if you do the math, these are like three per cent of the national road. So as a sample, let’s use this one; what we have done is ensure that we take at least one from each zone, those 12 and we offer it to the market to see how the market responds to it.
In terms of how it will be done, it will be done in collaboration with the Infrastructure Commission Regulatory Commission (ICRC). A lot of work has already taken place, we are going to launch the procurement portal very soon, so that everybody sees the same thing. We have collected a lot of data on the roads involved, photographs you will see of what the roads really look like as you want to bid for it, we have traffic data, we have survey map of the entire route, we have gazette of the entire route, so, I will encourage people to also go and do their own investigation just to confirm or modify what we offer as our data. We expect that responses will be exciting and we will take it from there.
In doing this, did you take into consideration the security situation?
I don’t want to sound disrespectful to victims of crime, but the point must be made that there is no federal highway to my knowledge that has become shutdown as a result of insecurity. And in that sense I mean that, no matter how challenging it is, some people’s livelihoods depend on being on the road. This is what inspires us to proceed on this basis. A lot of people and interests will be there: you have a towing service there, you run an ambulance service there, you put a rest house where people can eat and sleep there, and you put a farmhouse where all the farmers in the area bring their fresh fruits and vegetables instead of selling by the street side. Then, you have a company that does the removal of waste, vegetation and clears the road. You own an asset there that does the lane marking and signage. So, when all of these interests are in that road it is inevitable to be safer because we’ll all be more concerned about ensuring that we are more vigilant, we report more suspicious activities. For us, it’s not a deterrent, it’s a challenge and we are responding to it. A road where many more people are employed is a road that will be safer inevitably
How about the Abuja-Nyanya -Keffi Road?
We have a contract there funded by China EXIM and it’s important again to let people know that this is part of what we are doing with borrowed money; building roads. The Nyanya area that you speak about is a bottleneck really, between Nasarawa and Abuja, so we’re expanding that, currently we are working on ten lanes, five on each side, three lane main carriage way, two way service lanes on each side. So, work is going on there if you care to visit you will see our contractor there. Again, the big elephant in the room is the money. 85 per cent of the project there is funded by China EXIM. We have to keep paying our 15 percent counterpart funding. So, that’s it but work is going on. The road goes all the way to Makurdi as you are aware, so, it’s not just that area, work is going on in the other sections as well. Again, as I said, it’s a slow burning fire; it takes time for everything to come together.
Is there a role for private sector to handle some of these projects, either in full or in part?
For private sector, we already have Sukuk, we already have Road Infrastructure Tax Credit that is building Bodo-Bonny Island, building Obajana-Kabba, building Apapa-Oworonsoki. Those are Tax Credit, which is the private sector and there are more to come. There are over 1,300 kilometres of roads that will be funded through that initiative. We have done three Sukuk, in 2020 we did N162 billion, 2019 we did one N120 billion, 2018 we did N100 billion. This is private sector borrowing. So, we are looking at all options. As a platform of information and education, you should also interrogate the private sector. How many businesses make N1 billion turnover? Let’s start from there. So, let us say profit on a turnover of N1 billion is just roughly about ten percent, that is N100 million. Let’s say tax is twenty percent, how much is that? N20 million, which road will it build? And then, when you look at the private sector, when you dimension it, almost 60 percent of it is made up of Micro Small and Medium Enterprises (MSME) family businesses. So, where is the money to build infrastructure? So, when I hear about the private sector, we talk as if we are not mindful of the real private sector. Then, those who even have the capacity, how many of them are owing AMCON? So, if they are already owing, where is the money they are going to give to the government? The famous private sector, 300 and something of them were bailed out by this government in 2015. N5 trillion was how much we used to bail them out so that they won’t pull down the entire system. So, where is this private sector? How many of them really can do something. So, I think we need to do some more internal analysis of where capacity lies. So, you will see the Lafarge, you will see the NLNG, you will see the BUA, you will see the TNTL, the Dangote. Those are some of the heavy hitters; the Flour Mills PLC and a few others.
Recently the Federal Executive Council (FEC) approved the construction of the Abuja- Kano Road, what informed this?
Historically, that road is 375 kilometres, let’s just remember that first. In 1986, the Babangida-Administration awarded 220 kilometres of it, less than what we are awarding. It was finished in 1991. That’s 30 years ago. That’s around the average lifespan, 30, 35 years of a road. So, the answer to your question is that the road essentially is nearing its useful lifespan and you have to build it from the beginning again. That’s the answer, no more no less. Let me put it into context for you. The Lagos- Ibadan road was awarded in 1974, it was finished in 1978. So, that’s the reason for its reconstruction as well. That one has even outlived its useful lifespan.
The issue around Housing deficit: How many units of housing are under construction, where are they, when will they be completed, and when completed will they be affordable to an average Civil servant and other low-income earners?
There are many levels of interventions in housing. Again, without sounding repetitive, we need to measure housing in its fullest context. Ownership and rental, we need to define it that way. We also need to see the input in housing. What is the federal government doing, what is the state doing and what is the private sector doing? Because that is what gives us the total picture, bearing in mind that the federal government does not own land, it gets lands from states. In fact, just this morning I signed a letter to the governor of Edo State to give us more land to do another phase to complement the one he gave us before. We just got land from Ebonyi yesterday, to expand another phase. So, if we are building and the states are not building, then you’ll only see a part of the picture. But happily, the states are building. But more importantly, if the states and the federal government are building but the private sector is not building then you see an even smaller part of the picture. Happily, because of our policy we see an increasing uptake in terms of what the private sector is doing. Your newspaper advertises them, one estate after the other, buying and selling; we are on the right track. Where are we building? As a ministry, we are building in 34 states and the FCT. How many are we building? Directly, we are building almost 5,000 plus. We have finished about 2000 plus and for about a 1000 plus we are either doing the infrastructure; the roads, electrical, water supply. But as you heard again, as we finish one, we are moving to phase two to add more units. That’s direct intervention.
Then, we have our agencies, Federal Housing Authority (FHA) and Federal Mortgage Bank (FMB) that are also building across the country. FHA has thousands of projects across Nigeria. The FMB is also funding estate developers across the country. In terms of affordability, if you wanted to buy, most of what we are building range from one to three bedroom housing units. They are between 120 to 130 square meters for the three bedrooms, down to about 60 square meters for the one bedroom. So, they are not high-end luxurious spaces. They are targeted at those kinds of people you have in mind. So, the prices range from between N5 million and N6 million for the one bedroom to about N19 million for the three bedroom depending on whether it’s a flat that comes with a bungalow and a courtyard. You know you have to pay for the land. But irrespective of how much it costs, once you have to pay at once, then it’s tough. So, that’s where I said affordability is dependent on mortgages. So, we expect people to apply for a mortgage, that’ what makes it affordable so that your payment is spread over your period of comfort. And if you have one land somewhere that you have bought before and you don’t want to build again, that can make it more affordable. If you can sell that land and you put it into the mortgage, it reduces how much you have to borrow.
Sometimes some people have bought shares, this is the time to sell the shares and put the money in mortgage. It is called assets conversion. Capitalize your share to get a roof over your head. It will reduce the pressure on you. Sometimes some people have three or four cars, but they are using only two the other two are rotting in the house. Sell them off, put the money into mortgage to acquire the house, and reduce your pressure because those cars are perishable, your house is not, it’s appreciable. So, these are some of the ways. So, FMB is also giving people mortgages just as it is financing estate developers, and some of the conditions are that the developers must find off takers. Oftentimes the off takers are the people who contribute to the National Housing Fund (NHF), and NHF allows contributions from the public and private sector. So, if you are hoping to acquire a house, go and open an NHF account and that is what makes you eligible for housing mortgage finance. The interest is under ten percent and the tenures range from ten years upward. And if you are buying a house that is less than N5 million, you don’t need any equity contribution. If you are buying a house that is N5 million and above, I think the equity contribution is from ten percent to about 20 percent, and it makes it easier for you to get in. Our job is to try and make it easy. So, that is why I am telling you about this FMB. We are encouraging FMB to also support cooperatives, so, if you have cooperatives, journalists for example, go and find your own land, go and find your own developer, talk to us, open an account, and we’ll fund you so that you go and build what you like. So, all of these are out there in public spaces and it is happening.
