• Friday, March 01, 2024
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BusinessDay

FG’s 2024 budget for housing belies Tinubu’s campaign promises

Tinubu’s visit to Ondo: Akinterinwa raises alarm over attack on supporters

Recently, President Bola Tinubu signed into law the N28.7 billion budget for 2024 which comprises N9.99 trillion for capital expenditure, representing 35 percent of the budget, and N8.77 trillion recurrent expenditure, which represents 30per cent of the budget.

Out of this amount, the Federal Ministry of Housing and Urban Development (FMHUD) got N99, 982,577, 351 billion. N96, 996,742, 132 billion is for capital projects; N682, 686,111 for overhead cost while N2, 303,149,108 is for personnel cost.

Housing industry experts have discribed this allocation as a flash in the pan which belies or grossly mismatches the ambitious campaign promises for the housing sector by Tinubu as candidate of the ruling All Progressives Congress (APC).

The ministry’s budget is several steps behind those of the National Assembly, Education and Health which got N197 billion, N1.54 trillion and N1.3 trillion respectively . Even the Ministry of Police Affairs with N938 billion allocation is way ahead of the housing ministry.

FMHUD is a new ministry created by the Tinubu administration out of the unbundling of former Ministry of Works and Housing. Expectation was that the ministry which, in the thinking of housing sector stakeholders is a child of necessity, would get a fairer deal than it got from the government.

“We needed to see that first impression from the new government which mid-wifed the birth of the new ministry. First impression always has lasting effect and that would have encouraged investors and other players in the sector to do more,” Paul Onwuanibe, Group CEO, Landmark Africa Group, noted.

Onwuanibe stressed that government does not even need to spend its money on providing housing for the populace .What it needs to do, he explained, is to provide the necessary infrastructure and make the environment enabling for the private sector players to provide housing.

“A breakdown of the ministry’s budget immediately shows you that there is a clear departure or mismatch between the figures we are seeing and Tinubu’s campaign promises which, though I personally had my doubts then, were hailed by many industry stakeholders,” Johnson Chukwuma, a civil engineer, working as construction consultant, said in a telephone interview.

In the breakdown, the ministry provided N18.19 billion for the construction of 20,000 units under the Renewed Hope Agenda housing scheme, while N1.8 billion has been set aside for the establishment of local building material manufacturing clusters in the six geopolitical zones of the country.

Also, N4.1 billion would be spent to upgrade slum areas in 24 locations across 18 states. The project will provide the selected slum areas water supply, solar streetlights, rehabilitation of access roads, and construction of drainages, waste management and sanitation services.

Other priority areas include completion of the construction of National Housing Programme (NHP) in 35 states, and completion of ongoing construction of Federal secretariats in 11 states, which are at various stages of completion.

Tinubu as presidential candidate promised to tackle the country’s housing deficit by merging all federal government agencies responsible for home ownership into a new big entity, noting that the various federal agencies meant to promote home ownership are too small and fragmented.

The president, whose promises were contained in his party’s manifestoes, explained that “the new entity will inherit the functions of existing housing authorities and shall be adequately capitalised by the federal government.”

The agency, he added, would have a three-fold mandate including granting low interest rate mortgages directly, guaranteeing qualified mortgages issued by banks, and purchasing mortgages from private banks. He hoped that , “guaranteeing and purchasing of mortgages will incentivise banks towards mortgage lending and will deepen the secondary mortgage market.”

“We as players had expected that by now, given the dire situation of housing in this country, the Tinubu administration should have created the big housing agency and an allocation made for it in the 2024 budget. But that has not happened,” a member of the real estate developers association of Nigeria (REDAN), who did not want to be named, said.

Alternatively, he added, “the government should have made budgetary provision for the recapitalization of the federal mortgage bank (FMBN) and, by so doing, it would have addressed the demand side of housing and also helped to reinvigorate the mortgage sector and the National Housing Fund (NHF) in particular.”

Industry stakeholders described Tinubu’s housing plan as good, but feared it would suffer funding setback. Obinna Chilekezi, principal consultant at Intes Training & Edu Services Nigeria, was quoted as saying that collapsing the agencies into one was a good idea because it would reduce wastages and bureaucracies in the system.

He noted, however, that, “the past few years have been pressured with dwindling revenue for the government; so where is Tinubu going to get money to fund the project? For me, these are mere promises; when they get there, they become stories like what we had seen before.”

Chilekezi believes that a well-thought-out policy that makes land available for developers is ideal, and where it is available, high-rise buildings with blocks of flats are better and more economical for effective land utilisation.