With N10,000, Abuja residents will soon become landlords
By FRANCIS AWOWOLE-BROWNE, Abuja
Monday, March 26, 2007
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This may sound too good to be true, but it is a fact. Within the next three years, with the Private Public Partnership of the FCT authorities and a private estate management consultants, struggling residents of Abuja can have keys to his or her own house with payment of just between N10, 000 and N25, 000 as first installment.
That most Nigerians are living in squalor is undisputable. In fact, over 90 percent of the nation’s 140 million citizens, according to statistics, are vagabond. With the hope of owning a house sealed, each of this population segment, reports say, moves from one place to another in search of decent accommodation, which often times are beyond their income level. No thanks to the economic doldrums which confined majority to living below the poverty line.
However, in the next three years, starting from Abuja , the dream of most Nigerians to be a proud house owner may transform to reality, when the on-going Private Public Partnership (PPP) housing project between the federal authorities and a renowned World Bank certified real estate developer comes on stream. It would look a miracle of the century, if indeed, with as little as N10, 000. Nigerians would get a key to a house, as the project seeks to achieve. This should be a cheering news to those whose houses have been demolished by the FCDA and lost hope of building another one.
The pivot and principal consultant of the deal, which is being coordinated and executed by Blue Royal Site Services, Prince Olubunmi Faboro said the project of which the Federal Capital Territory Administration (FCDA) had signed an agreement will mark the beginning of a revolution in the housing sector in the country. He explained that in the next three years 3000 low and medium income housing units, would have been delivered if everything goes as planned.
According to him, his organisation in collaboration with the Federal Ministry of Foreign Affairs has made trade missions to some countries, including Dubai which had conquered the problem of inadequate affordable houses to their citizens.
Housing problem in Nigeria
Prince Faboro pointed out that affordable housing to the citizens is a basic service any responsible government should be able to provide. No government according to him could lay claim to good governance without shelter. Shelter, he said, is a compulsory requirement in life after food and clothing. On the other hand, he explained that the business of provision of housing is not the exclusive responsibility of government.
He stated that the private sector holds the key to affordable housing and government world over, could only participate as a facilitator. In Nigeria , he noted, many private operators have come up with various types of housing arrangements and schemes, as would have expected.
"However, the problem is that these houses are too elitist and expensive for an average income earner to possess. This is why less than two percent of the population can afford the houses. The houses are that expensive because mortgage based housing has not worked in Nigeria. Any interest rate that is above a single digit cant help developers to deliver, except the Mega banks rolling out products in real estate reduce their interest rate, having a decent houses will continue to be a mirage for the low and middle income earners in the country.
"Going by the schemes on ground on housing as being bandied by the private developers, no civil servants can get his own house through any of the developers except of course, he or she steals. This is why we are devising a new method of mortgage housing which is accessible to all adults in public and private sector, entirely different from what we use to have.
How it works
Prince Faboro, who is Chief Executive Officer of FHT Venture Plc, the promoters of the Blue Royal Site and Services explained that under the deal the authorities would facilitate the acquisition of land that the investors would make use of. The investors both local and foreign are expected to deploy their expertise and technical know how. Federal Mortgage Bank, he added is involved in rendering mortgage services. Prince Faboro equally, suggested that there is an opportunity the billions of naira in the pension fund held by the pension fund administrators could be deployed to finance the houses, since the owners of the funds are the same people that will benefit from the mortgage based housing scheme.
"The availability of millions of naira mortgage can make for decent houses. Depending on the years of service and age of the beneficiary, when the scheme comes on stream, an average adult can posses a house with the first installment payment of between N10,000 and N15,000 and can pay for between 15 and 25 years." Incredible as this may seem, the Principal consultant maintained that the houses would be that cheap because materials for the house would be sourced locally and would therefore be cheap. "Mortgage institutions have low capital base and could not take on big housing projects, and therefore banks delve into the service with huge interest rates which when added together escalate the cost of the house and pushed it beyond the reach of the common man. Except people have access to mortgage, Nigerians would find it difficult to own a house.
The mortgage housing scheme is to take off in Abuja as a pilot project. Prince Faboro disclosed that an agreement had been signed and a proposal made to the Federal Capital Territory Administration (FCDA) on the basis of PPP for the provision of lands for both low and high income earners. Over 3,000 houses are to be delivered. By this arrangement, he is of the view that prices of houses will fall, by the simple law of demand and supply.
The consultant expressed satisfaction at the level of response of the people to the mortgage based housing scheme. According to him, people have been coming to obtain application. "We have to start early and have people expressed their interest so as to also ginger us into action. Application is available to every qualified adults, the mortgage bank is ready to embark on the processing while we undertake the practical and technical aspect of it. We want to show to the whole world that cheap and decent houses can be provided and that all Nigerians can be housed without draining their pockets since they will pay over a long period of time and we want to lead the way.