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Experts chart path to wealth creation

Experts have said if wealth is successfully transferred from one generation to the other, financial security will be enhanced and guaranteed. This they believed would reduce the current epidemic of wealth truncation.

The experts who gathered at the 2017 wealth forum organised by Zela Ventures Int’l Limited recently identified initiatives for achieving sustainable wealth to include strategic planning, healthy readily available working cash to maintain business agility, strategic cost management, reduction of dependency on short- term financing by dealing with debt, effective risk management among others.

Chairman of Berger Paints Plc, Dr. Oladimeji Alo, while delivering his keynote address on ‘Issues to note in wealth preservation, enhancement and transfer’ opined that it relates to the strategies, plans and actions to protect assets and income.

Alo who doubles as the Managing Director Excel Professional Services, stated that mistakes wealthy people make in wealth preservation is; not understanding the nature of wealth, but falling into the trap of conspicuous consumption, forgetting how the wealth came, not seeking or following professional advice or investment, over concentrating of assets, poor planning amongst others.
He listed the mistakes in wealth transfer as follows, not sufficiently preparing successors to receive wealth, pre-mature transfer, no formal structure or system and improper insurance.

The Managing Director of Afriland Properties Plc, Mrs Uzo Oshogwe enumerated the benefits of real estate as a veritable means of wealth transfer. She said wealth is the total market value of all physical and intangible assets owned, subtracting all debts.

According to her, real estate has been an integral part of our lives; it is a brilliant source of long-term wealth creation, stating that more fortunes are made in real estate than in any other business. Investing allows one to increase their financial worth.

Managing Director of United Capital Trustees, Mrs. Tokunbo Ajayi, said wealth management should ideally combine financial and investment advice, accounting and tax services, retirement planning and estate planning.

Ajayi who was represented by an official, Ada Ijara, stated that from their professional experience, wealth acquisition process is not complete without adequate plans to ensure preservation from one generation to the next.

Originally published in The Guardian

Lagos generates N20 billion in land administration

In spite of the challenging financial crisis in the country and its attendant effect on businesses, the Lagos State government has announced a revenue performance of N20.7 billion from land administrations in the last one-year.

The performance, which surpassed the total revenue of N11.4 billion recorded in the previous year, came from transaction on the sales of land for industrial development in the state.

Special Adviser to Governor Akinwumi Ambode on Urban Development, Mrs. Yetunde Onabule, who disclosed this at a briefing by the State Lands Bureau to commemorate the second year anniversary of Ambode’s administration, said the revenue performance exceeded the Bureau’s budget for the period by 45 per cent.

Besides the one –off transaction, expected revenue from new schemes initiated by the government during the time under review, she said, could not be realized in view of infrastructure development within the new scheme, thereby making it difficult for the Bureau to generate revenue from the schemes.
Reassuring the importance of land as a desirable and crucial resource to all, she said the present administration has put in place effective and dynamic reforms to continuously ease the process of land administration in the state.

Onabule expressed optimism that the reforms put in place to further upgrade service delivery through better strategic procedures and smarter use of information technology will enhance revenue performance and service delivery in 2017.

On the issue of compensation for lands acquired by government or whose titles were revoked for overriding public interest, the Special Adviser said over N2 billion has been paid as compensations to individuals and groups who presented all necessary documents evidencing ownership of the lands.

According to her, the state government as a responsive and responsible one is determined to make life better for the citizenry, by paying compensation to beneficiaries, hence entrenching a culture of excellence, prompt and efficient service delivery to Lagosians.

Originally published in The Guardian

Want Innovation? Stay Curious!

Curiosity they say kills the cat; maybe the Stone Age cat but certainly not the 21st century one. Curiosity actually nourishes the 21st century cat.

In the 1600s, the punishment for being an “innovator” was getting your ears chopped off. You were seen as a troublemaker simply because you challenged the status quo.

The secret to innovation and creativity is curiosity. We must realize that without the question why, there would be no “how”. This serves as a catalyst to great discoveries.

All great inventions first dropped as ideas, and all ideas were generated through inquisitiveness, curiously and urge to know more about things in the world around us.

Since curiosity is a stepping stone to innovation, here are a few ways to help your curiosity skills:

  1. Read widely and follow your interests
  2. Listen without the aim to judge
  3. Polish your mind with the minds of others
  4. Be willing to ask dumb questions
  5. Put a lot of ideas and facts in your head: Don’t rely on Google
  6. Be an expert who is interested in everything
  7. Listen

innovative entrepreneur 2

Federal workers, NMRC in N13 billion mortgage refinancing deal

Towards providing adequate funding at low interest rate for the delivery of affordable housing to public servants, the Federal Government has entered into a N13 billion mortgage deal with Nigeria Mortgage Refinancing Company (NMRC).

The deal is coming under the Federal Integrated Staff Housing programme (FISH), the Memorandum of Understanding (MOU) was signed between the Federal Government Staff Housing Board (FGSHLB) and the private sector-led mortgage firm. FISH programme and Family Homes Funds also endorsed an MOU to provide affordable housing.

The Head of Civil Service, Mrs. Winifred Oyo-Ita who witnessed the event at a one-day FISH-P Housing summit 2017 held in Abuja on the theme, ”innovative Strategies For Affordable housing”, said 30,000 civil servants have been profiled as off takers and deductions of mortgage or loan repayment directly from their monthly salaries on delivery of houses of their choice have begun.

The FISH programme, an initiative of the President Mohammadu Buhari led Federal Government, anchored by the office of the federal civil service of the federation, entered into partnerships with ten primary mortgage bankers to facilitate prompt processing of mortgage applications with Federal Mortgage Bank of Nigeria.

The scheme was designed by the Head of Civil Service of the Federation in 2016 to alleviate the housing challenges experienced by civil servants in Abuja and other state capitals of the nation and administered through an inter-Ministerial Committee comprising Pertinent Secretaries, Managing directors, Directors-General, Executive Secretaries and other officials of government

The Head of Service further disclosed that the government is entering into partnerships with manufacturers of building materials for discounted volume prices to drive the cost of houses much lower.

The Nigerian Mortgage Refinance Company, Managing Director,  Prof. Charles Iyangete, who said his organisation will partner in delivering an innovative as well as constructive mortgage financing of affordable houses to civil servants, also revealed that the memorandum of understanding entered with his organisation, will enable them and other relevant agencies partnering in the FISH Programme, ensure that the housing deficit experienced by public servants are resolved within the best possible time.

Earlier, the Chairman of FISH Committee and Permanent Secretary, Common Services in the office of the Head of service, Yemi Adelakun said the major problem facing the programme includes difficulties to allocation and acquisition of land from the federal and state governments, provision of infrastructures at minimal and subsidized costs, additional sources of funding for construction and mortgages at single digit interest rates among others.

The President, Nigerian Institute of Architects, Tonye Braide promised that the institute would participate in the FISH programme by expanding on the ideas postulated therein.

He said: ”What may be needed could be the adjustment to meet a Nigerian Operating model in addition, the institute can also provide value added services to assist with bulk purchase/procurement, insurance management, information services and supply chain management.”

Originally published in The Guardian

Uzo Oshogwe, MD/CEO, Afriland Properties Plc, Speaks at WEALTH Forum 2017

The Managing Director /CEO, Afriland Properties Plc, Uzo Oshogwe, recently stated that real estate investment is an effective and a much more dependable option for wealth creation, preservation and transfer.

Speaking at the 2017 edition of the Wealth Forum, which took place on April 27, at the Civic Centre, she also noted that “In a society where statistics have shown that 70% of rich families lose their wealth by the second generation, it is imperative to take deliberate steps in ensuring wealth is successfully preserved, transferred and responsibly managed.  The tangibility of real estate investment makes it more stable than other forms of investment. To name a few, a regular income stream and  property appreciation are some of the benefits you get to enjoy when you invest in real estate”.

Wealth Forum was organized by Zela Group, with the aim to create more awareness for financial wellness and wealth management that will guarantee generational wealth transfer and stem the erosion of wealth.

Pass real estate bills, LCCI tells N’Assembly

The Lagos Chamber of Commerce and Industry has called on the National Assembly to pass all pending real estate-related bills so as to help boost the industry’s growth.

The President, LCCI, Mrs. Nike Akande, stated at the first business clinic of the chamber’s real estate group that the industry needed government’s support as the country’s large population of 180 million and huge housing deficit were indicative of a positive prospect for the real estate industry.

She said, “The government should give more support to this sector by pursuing the passage of all pending real estate-related bills at the National Assembly.

“Some of these are the Infrastructure Development Bill; the Engineering Registration Act (Amendment) Bill 2016; Nigeria Industrial Development and Zones Bill 2016; Nigerian Assets Management Agency Establishment and Regulatory Bill 2016; and the National Housing Fund Act (Amendment) Bill 2016.”

Akande added that the real estate industry had become one of the major drivers of growth and development aspiration of the country, and that because of the importance and performance of the industry over the last few years, the LCCI decided to unbundle real estate from the construction group and make it a stand-alone group in the chamber.

She noted that a recent report published by PwC found that the Nigerian construction and real estate industry remained robust despite the prevailing economic slowdown.

“The industry is projected to record a compound annual growth rate of 9.49 per cent over the period of 2016 to 2020. In addition, Nigeria has emerged as a major hub of building and architectural design in Africa. This is largely induced by the spread of Nollywood where Nigerian building designs are showcased and watched across the African continent. This presents opportunity for players in the real estate industry to maximise both local and emerging off shore potential,” she added.

Akande said that to ensure sustainability, operators in the real estate industry must embrace modern technologies, and ensure regulatory compliance and standardisation in service delivery.

The Chairman, Real Estate Group, LCCI, Mr. Olumide Osunsina, said membership of the group cuts across real estate developers, surveyors, architects as well as structural engineers, with over 60 companies as members.

“The real estate is one of the groups in the Lagos chamber whose activities are focused on addressing critical issues affecting investment and investors in the real estate industry, which will require the informed intervention of the chamber from time to time,” he said.

Originally published in The Punch

These Real Estate Challenges Require Government’s Urgent Intervention

In 2015, the United Nations Conference on Trade and Development (UNCTAD) identified Real Estate as one of the fastest growing sectors in the Nigerian economy, having an undeniable potential to drive economic growth.

With a projection of 10% annual growth and   a contribution of  N2.11 trillion($9.6 billion) to the economy’s rebased GDP which stood at USD 510 billion for 2013, the Real Estate sector was seen as viable. Nigeria possesses all the key factors for real estate investment and growth; a burgeoning middle-class population, growth in consumption and rapid urbanization.

However, with the current economic situation, Real Estate like every other sector has been negatively impacted, dampening the property market transactions to 70 per cent, hereby hindering growth.

According to Nigeria Bureau of Statistics, Real Estate Services in the 3rd quarter of 2016 grew by 2.56 %, lower by 6.62 % points than the growth rate reported for the same period in 2015 and higher by 0.44 % points compared to the preceding Quarter.

Apart from the decline in oil prices, weak performance of commodities and geo-political conflicts which led to recession, there are other vast challenges facing the sector that require urgent intervention:

Non-availability of Cheap Funds (Limited Source of Funding)

Real Estate is one of the most capital intensive forms of investment and its biggest challenge in Nigeria is scarcity of cheap development funds. Access to finance remains a great problem to developers, prospective clients and homeowners. Nigeria’s rate of home ownership is one of the lowest in Africa at 25% and this is due to lack of a robust mortgage financing system.

Financial institutions such as the commercial banks commit relatively small parts of their funds to property development at a very high interest rate up to 20%. This consequently drives property prices in a variety of ways.

The high interest rate is one of the major factors affecting the realization of affordable housing in Nigeria. The higher the interest, the high the lease or cost of acquiring the property.

Due to the recession, the situation got worse with little or no funding for real estate development in the country for developers.

Solution

  1. Long term debt financing and reduced interest rates.
  2. Pension funds are a very important factor in the overall investment market and more of this should be allocated and invested into real estate market. Real estate investments provide long-term opportunities for pension funds.
  3. More public/private partnerships and joint ventures.
  4. The Federal Mortgage Bank of Nigeria needs to intervene directly in housing construction by providing finance to designated building construction companies.

Land Registration and building approval Process

Second on this list is Land registration and building approval process. This is a major turn-off for potential Real Estate investors.

The cumbersome and costly process could take up to 6 to 24 months depending on the title and type of construction, with an average of 12 procedures thereby causing unnecessary delays.

Land and property acquisition must be less difficult for the sector to grow rapidly.

Solution

  1. The traditional manual process of registration should be automated online to reduce paper work and timelines. When this process is more accessible, it becomes easier and more attractive.
  2. Amendment of Land Use Act.
  3. Registration and approval process should be simplified.

Irrepressible fall of Naira

The economic impact of the fall in exchange rate has increased the cost of importations. Uninspiringly, the Real Estate industry is dependent on foreign importation for the raw materials and equipment used for construction, therefore the value of Naira remains a great factor. The dollar has tripled against the Naira in less than 3 years and the devaluation has contributed largely to the fall in Real Estate figures.

The unstable and incessant fall of our currency results in a loss for most developers thereby reducing trust in the sector and scaring investors away.

Presently, there is already a drastic drop in demand in the Real Estate sector which has resulted in a glut in supply.

Solution

  1. Review of recent forex policies
  2. A standardized exchange rate.
  3. Real Estate transactions should be in Naira and not foreign currencies.
  4. Promotion of locally produced construction materials

FG to resuscitate FMBN with N500bn

The Federal Government has  set aside   N500 billion to resuscitate the Federal Mortgage Bank of Nigeria (FMBN). The Minister of State for Power, Works and Housing, Mustapha Baba-Shehuri, made the disclosure  in Lafia when he visited the site of a National Housing Project (NHP).

The minister, who was received by the Deputy Governor, Mr. Silas Agara said the aim was to make mortgage facilities easily available to Nigerians.

He said: “The resuscitation of the bank with N500 billion would provide the institution with adequate funds to deliver mortgage facilities to interested Nigerians.

“The Federal Government in its mission to provide shelter to all Nigerians, has directed the FMBN to waive the payment of 10 per cent equity on mortgages below N5 million. This will greatly enhance the transition of low income earners from tenants to home owners,” he said.

Baba-Shehuri added that the houses would be built based on the country’s housing design with 100 per cent local content to create employment for the youths. He said the ministry would leave no stone unturned in tackling the challenges of housing shortage in the country, which was about 16 million to 17 million.

The minister  said  that government had commenced plan to construct mass housing units in every state for public and private workers in the next three years.

Originally published in Daily Trust

FMBN boosts housing in seven states with 1,500 units

Amid concerns that a yearly rural-urban migration of over 5 per cent requires 720,000 housing units annually to fill the nation’s housing deficit, Federal Mortgage Bank of Nigeria (FMBN) has uploaded 1,500 housing units into the property market.

The units developed by the bank in seven states; namely, Taraba, Kwara, Enugu, Ebonyi, Imo, Nassarawa and Niger were commissioned recently. For instance, in Jalingo, 202 housing units, made up of 88 three-bedroom semi-detached bungalows, 90 two-bedroom semi-detached bungalows and 24 one-bedroom terrace flats were completed.

FMBN has also funded a number of estates in Taraba State with a total investment of about N1.4 billion in the development of a total of 378 housing units, according to Richard Esin, FMBN’s Acting Managing Director.

The housing Estates being developed by FMBN across the country are financed from the resources of the National Housing Fund (NHF) Scheme. The NHF is a contributory scheme into which Nigerian workers in both the public and private sectors earning a minimum of N3, 000 per annum contribute 2.5per cent of their monthly income.

On the basis of their consistent and continuous contributions to the NHF scheme, Nigerian workers become eligible for mortgage loans at a concessionary interest rate of 6 per cent yearly and repayable over a maximum period of 30 years to ensure affordable home ownership among Nigerians.

In its drive to make the scheme more inclusive, the federal government has recently lowered the affordability bar by approving loans of N5 million and below will attract 100per cent funding.

Esin explained, ‘this means that loan applicants will not be required to make down payments of 10 per cent being their equity contribution. In addition, the cost of mortgage perfection, which usually adds another 10 per cent to the upfront costs will be capitalized and repaid gradually over a period of two years.

The effect of these concessions reduces upfront homeownership costs by at least 20 per cent. By making homeownership more inclusive, FMBN is refocusing its business to make mortgages more affordable to a wider segment of the market, which now includes the mass and middle income segments of the population. The targeted average price per unit of a house to meet these customers is estimated at between five million to seven million naira per unit.

He noted that the development of these estates in Taraba state and other cities in all the geopolitical zones of the country ‘is an affirmation of the tangible achievements of the federal government in the area of provision of affordable housing for all Nigerians’. The Minister of State, Federal Ministry of Power, Works and Housing, Mr. Mustapha Baba Shehuri, was equally excited about the development. He said: ‘the completion of this estate is an actualization of the affordable housing policy as it will no doubt transform not less than 202 Nigerians from being tenants to proud homeowners’.

The Minister received a huge applause when he announced that his ministry will soon commence the construction of ‘5,000 housing units in every state of the country for public workers every year over the next three years under the public-private partnership arrangement’. The need for housing in Taraba is huge.

Essentially, in the last five years, the state has received a huge influx of people running away from the crisis in the north-eastern corner of the country. Governor Darius Ishaku, himself an architect who has logged in several years in the housing sector and property development sector, noted that by developing these Estates in the state, FMBN ‘will address the housing needs of the target beneficiaries, thus creating space in other housing facilities within Jalingo to meet other needs’.

With these developments, FMBN is achieving its mandate in terms of cost management, resource optimization and waste reduction. For the 2016 financial year, the Bank posted an Operating Surplus (profit) of N2.7 billion – the first such impressive performance in two decades which is 50 per cent above the budgeted N1.8 billion for 2016. To further drive growth, profitability and achievement of its core objective, FMBN will soon roll out its five-year Strategic Plan.

Key priorities of the plan include sound effectiveness and debt recovery. The Federal Government has also announced plans to recapitalize the Bank to the tune of N500 billion. The Bank is also building strategic partnerships with key stakeholders. Early in 2017, it signed a tripartite Memorandum of Understanding (MOU) between the Federal Mortgage Bank of Nigeria (FMBN), Shelter Afrique, and Real Estate Developers Association of Nigeria (REDAN) in Abuja.

The objective of the strategic collaboration is to harness each party’s competencies and strengths in the areas of training, research, advocacy, and mobilization of financial resources, both international & domestic, in support of projects of mutual interest to ensure the successful delivery of affordable housing in Nigeria. By the agreement, Shelter Afrique, the Kenya-based international housing financiers, is committing to availing the sector $2 billion construction finance for housing development.

“This collaboration is a proactive step taken in recognition of the opportunities that would arise from the launch of the National Housing Model,” Esin said

Originally published in The Guardian

New land survey fees begin in Lagos, threaten homeownership

Hopes of cheaper construction cost and land ownership for prospective property developers may still be a pipe dream going by fresh increase in land survey fees in Lagos area by the Nigerian Institution of Surveyors (NIS).

The increase by Lagos chapter of the institution, which may act as a test bed for professional scale of fees in the built environment sector has ruffled feathers in the housing industry. Other professional bodies are watching how events will unfold, while experts and private developers foresee increase in lands and housing cost.

The chapter had raised the land survey plan fees by over 300 per cent, starting from April 1. The fees cut across different zones of the state. For instance, Ikorodu, Epe, Badagry Ojo and Ajeromi Ifelodun local government that is currently N120, 000 it has been increased to N350, 000.

While Lagos Island, Eti- Osa, Ikeja and Papa, which is presently N300, 000 now is going for N1million. Somolu, Alimoso, Mushin, Agege, Ibeju Lekki, Kosofe, Lagos Mainland, Amuwo Odofin Local Government, formerly pegged at N180, 000 has been hiked to N650, 000.

Some housing professionals that spoke to The Guardian criticised the move, saying it would also make prospective homeowners to cut corners and increase the cost of procurement of land documents.

President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Dr. Bolarinde Patunola-Ajayi said that the development will make few people to invest in property as the new rate is higher than the cost of buying land in some locations.NIESV president, who dismissed call for the institution to increase its scale of fees, noted that such development would have dire consequence for the housing industry.

For the Second vice president, Nigerian Institute of Building, Mr. Kunle Awobodu, said that the institution is justified in increasing its fees as inflation has affected members of the built environment professionals. He disclosed that such fees will be pass on to the would-be subscribers of houses or landed property.

But, property developers under the aegis of Real Estate Developers Association of Nigeria (REDAN) are not allowing the matter to lie low. REDAN has engaged the services of a law firm and threatened to go court.

In a letter to the surveyors, counsel to REDAN, Ebun-Olu Adegboruwa, asked the surveyors to suspend the implementation of the proposed increment, in order to give room for further interaction and dialogue, with all stakeholders in the building industry.

REDAN also made a case that the increment will have a ripple effect on the cost of land as other professionals involved in the real estate business such as lawyers, architects, engineers, and town planners will also increase the cost of their own services, which will all be borne by the end users. “It will also rubbish the efforts of government towards achieving affordable housing.”

REDAN therefore appealed to the surveyors to convey a meeting of all stakeholders in order to discuss and agree on the best modality for any review of professional fees in land related matters.

Adegboruwa however warned that REDAN will challenge the proposed increment in court, should the surveyors insist on implementing the policy as stated.The letter read:  “Our clients consider it improper to increase the cost of survey plans at this time of economic recession, especially considering the ripple effect that such a step may have on other stakeholders within the built industry, such as architects, engineers and lawyers, etc, who are also members of their association.

“The planned increment will also impact negatively on the policy of affordable housing being promoted by the present administration at all levels. Our clients have also consulted the various statutes regulating this matter and they are yet to be convinced of the legal basis of this increment at this time.

Consequently, we have our clients’ instructions to request you to kindly prevail on your organisation and its members to suspend the implementation of this policy and to allow for further interactions, dialogue and discussions, between all the relevant stakeholders in the real estate business.

“ In compliance with statutory requirement to explore alternative dispute resolution mechanism, kindly indicate to us in writing within five clear days of your receipt of this letter, of your kind disposition towards the meeting suggested herein, failing which we have our clients’ further instructions to take out a writ of summons in court to determine the legality of such increment, to take out an order of injunction to restrain the implementation thereof and to determine other ancillary legal issues,” they added.

The Guardian learnt that the new increase is supposed to be approved by the Surveyors Council of Nigeria (SURCON), but the NIS and SURCON have been in a showdown over allegation and counter allegation bothering on induction of new members.Recently, the Surveyor General of the Federation, Prof Peter Nwilo accused the NIS President of trying to create a serious division in the profession of surveying.

Nwilo referred to the Laws of the Federation of Nigeria, CAP 425 adding that according to the law, even the minister can give instructions of general nature. The profession of Surveying is regulated by the Surveyors Council of Nigeria (SURCON), set up and empowered by CAP 425, Laws of the Federation of Nigeria.

Efforts to get the NIS Lagos chairman, Mr. Alara Olugbenga comment proved abortive. The Executive Secretary of the national body, could not respond to several calls and emails on issues raised on the matter.

Originally published in The Guardian

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