The Federal Government has been urged to keep off from direct construction of housing and infrastructure in the year, to avoid a clash of interest. Rather, the government has been told to focus solely on its core responsibilities of creating an enabling environment for business and investment to thrive through effective legislation and enforcement of the policy.
The President of Housing Development Advocacy Network, (HDAN), Festus Adebayo has said. According to the group, such a policy move will spur a derivative market that allows asset-backed investments in infrastructure and housing to grow as well as attract requisite investments from local and foreign investors.
It stated that Nigeria’s infrastructure need has the proven cash flow models to match returns with the risk per virtue of the population size and the increasing demand for better service alternatives.
HADAN stated this in its housing agenda report for the New Year 2020. The report released by its president alerted the federal government on global best practices, stressing that it should be fixated in creating incentives that will stimulate infrastructure and housing development.
Essentially, he said incentives should be given to players and developers who are providing infrastructure and housing services for lower, upcoming middle-income segments and those who really need housing and infrastructure.
“From our view and experience, rather than seeking to raise an infrastructure bond of N10 trillion to pay contractors-a practice that would likely continue to promote cronyism), the Federal Government should facilitate the creation of an enabling environment for infrastructure and housing guarantees to thrive. The government should be leaning towards credible partnerships with the private sector in terms of infrastructure and housing developers who have proven track records for infrastructure and housing delivery even in the absence of government support. Such private sector players need this partnership with the government in order to deliver more in 2020.”
He said the government should push for the amendment of laws that will foster infrastructure and housing sector development stating that if that is done, it will increase the sector’s contribution to Gross Domestic Product (GDP) of Nigeria while the federal government through the Central Bank of Nigeria should ensure absolute implementation of the Interest drawback system for the housing sector, and should be done in collaboration with critical private sector and public sector players to avoid political misuse or diversion.
“Stakeholders expect that the Minister of Works and Housing, Babatunde Fashola steer clear of controversial assertions that might plunge the housing and infrastructure markets into deeper uncertainty. Challenging the likes of the World Bank on housing deficit or claiming that Nigerian roads are better than reported creates a body language of the insincerity of character and purpose. The National Assembly should become more people-focused and expedite actions to review infrastructure and housing-related laws that are necessary for the sector’s speedy growth and to ameliorate the growing restive population in terms of infrastructure and housing provisions”
“The Central Bank of Nigeria should in 2020 see to the fruition of the mortgage interest drawbacks scheme and collaborate with the Bankers Committee towards deepening the liquidity and opportunities derivable from affordable housing and mortgage provision,” he said.
HADAN further stated that there are expectations for more mergers and acquisitions especially, in the mortgage sector of the Nigerian economy while it is also expected that there would still be a lull in the provision of housing for the high-end segment. However, it noted that there would be a boost for those in low to upcoming middle-income, hence, the focus for developers/investors in 2020 should be how to develop a catchment market for the provision of housing for upcoming middle-income earners and the youthful segments to successfully combat restiveness, banditry, kidnapping, and terrorism.
source: Victor Gbonegun