Nigeria’s fragmented real estate industry, difficulties in obtaining construction permits and other factors have discouraged foreign investors from large-scale investments in the sector, New Telegraph has learnt.
According to experts and major players in the sector, despite improvement of Nigeria on the Global’s Ease of Doing Business global ranking 2018, private developers have continued to encounter difficulties in obtaining construction permits and property titles due to lack of transparency by officials of government.
They agreed at a Business Forum organised by the International Real Estate Federation (FIABCI) Nigeria in Lagos that the World Bank’s Ease of Doing Business index had impacted positively on the market, but a lot still needs to be done in attracting foreign direct investment into the market by creating an enabling environment for the sector.
After setting up the Presidential Enabling Business Environment Council (PEBEC), Nigeria had registered a historic improvement in Ease of Doing Business ranking released last year by the World Bank. The country jumped from 170th to 145th place out of 190 countries.
The experts noted that insufficient sources of funds had also worsened the liquidity crunch of developers and slowed down the sector’s recovery from recession.
Managing Director, Alphamead Group, Femi Akintunde, argued that government had not demonstrated the capacity to reduce construction cost despite the new ranking by the World Bank.
He pointed out that bureaucracy and delays in issuance of certificate of occupancy, especially in the use of property for mortgage refinancing, were hampering several property developments.
To grow businesses in real estate sector, Chief Executive Officer, Eximia Realty Company Limited, Hakeem Ogunniran, urged government to reduce documentations needed for planning permits and multiple regulatory agencies in the built environment sector.
Also, past President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Bode Adediji, suggested that all government policies should be holistic and ensure ease of doing business.
Justifying the forum, FIABCI-Nigeria President, Mr. Adeniji Adele, said it was one of the association’s ways of providing access and opportunities for real estate professionals interested in gaining knowledge, sharing information and conducting international business with each other.
The Permanent Secretary, Lagos Ministry of Physical Planning and Urban Development, Mrs. Boladele Dapo-Thomas, stressed that building permit process in the state was not cumbersome, urging applicants to avoid the use of third parties.
She added that government had also improved planning permit application process through the introduction of e-planning platform.
“All applicants enjoy reduced costs for permits due to the elimination of requirements for infrastructure development charge (IDC) for two floor warehouses, soil test and Environmental Impact Assessment (EIA), certified true copy (CTC) of title document and survey plan,” she said.
However, the experts called for a new reform such as introduction of technology in the sector to eliminate bureaucracy in the issuance of permits and boost confidence of global investors in the sector.
This, they said, would also ensure influx of foreign investments to the country.
On his part, World President of FIABCI international, Mr. Assen Makedonov, said that use of block chain technology would reduce corruption in the real estate and bring about transparency, just as a past President of the body, Mr. Farook Manhood, said that when government embraces technology, there would be transparency and less bureaucracy.