Experts, investors, professionals and other stakeholders in the real estate sector have said that the growth of this sector, which is considered critical to the growth of the economy, is dependent on infrastructure development and sustainable financing, noting that the sector’s contribution to national GDP estimated at 7 percent is too low given its enormous potential.
The stakeholders who spoke at the just concluded Real Estate Unite Conference organized by 3Invest Limited in Lagos, noted that contrary to expectation that rising urbanisation rate which has increased from 10 percent in 1950 to 50 percent would improve the fortunes of the sector, lack of sustainable funding and infrastructure development has slowed its growth.
In his keynote address at the conference, Governor Babatunde Fashola of Lagos State, highlighted approaches that could bring about sustainable financing for the sector, citing the Lagos Home Ownership Mortgage Scheme (LagosHOMS) and how that scheme underpins his administration’s ability to create a sustainable financing mechanism that could provide affordable homes for the middle class.
Fashola, who described the initiative as a typical sustainable affordable housing strategy, assured that by the scheme’s one year anniversary, it would have produced equal number of housing units which the Federal Mortgage Bank of Nigeria (FMBN) has struggled to produce in its 22 years of existence.
According to him, one of the sustainable mechanisms instituted by the state to drive the scheme is the monthly savings of N500 million from the state’s internally generated revenue (IGR), revealing that as part of efforts to spur growth in the real estate sector, the state government has resolved to share the cost of providing infrastructure between itself and homeowners.
“What we do is to provide some of the infrastructure such as the main access roads into private estates and LagosHOMS but for the internal roads, the cost is shared among all the residents to be paid over a period,” he said, adding that the absence of sustained infrastructure provision in any society encourages slums development.
Chima Ucheya, managing director, Rainbow Town Development Limited, speaking at one of the panel sessions at the conference, said the country’s infrastructure deficit could be effectively tackled through Public Private Partnership (PPP), stressing that the continued reliance on government would continue to yield little or no result.
“There is need for a synergy between the government and the private sector before any meaningful progress can be made,” he said.
Citing the Rainbow Town project in Port Harcourt as a case study, Ucheya said that though the Rivers State government was looking to commence the construction of an access road into the estate as its contribution to the development of infrastructure in the new town, it is supposed to be duty.
“The public infrastructure such as access roads must be provided by government because it has been proven that once such infrastructure is provided, the private sector will unleash its potential in that axis,” he added.
ODINAKA MBONU
