ESV Stephen Ola Jagun is a certified Facility Manager, who has paid his dues in the real estate sector. He’s won several awards/accolades, locally and internationally. His CV is very rich and intimidating. No wonder he has become one of the most sought-after real estate experts, globally. He travels to deliver lectures on how real estate can be better developed.
He is a Fellow of the Nigerian Institution of Estate Surveyors And Valuers (NIESV); and many more. He is the first African Fellow of the International Facility Management Association (IFMA) and past President of the Nigerian Chapter of the International Facility Management Association (IFMA).
Last week he told City People’s ISAAC ABIMBADE, about the many solutions government should quickly adopt if they are to revive the sector.
The incessant increment of house rent in Lagos is worrisome. What is the solution to this sir?
The issue is that the government is doing what they have no business doing. They want to provide housing and housing anywhere is capital intensive. And some of us have been shouting for a long time. What the government needs to do is create an enabling environment for people to play in the market. For example, the Land Use Act, gives power to the state government. What is the state government doing to make housing available? That’s no 1. Number 2, when they make them (housing) available, to who? To their friends. And these people now make it look like a commercial venture. For example, if the governor gives 15 hectares to a friend, he would go sell it to the public to make money. What he (governor) should have done is to give people vast land and the person provide infrastructure. The issue is that the government needs to subsidize its equity contribution to take care of the market.
Another issue is that government sometimes goes into direct construction. When the federal government says they want to build 1 thousand housing units in Lagos State, does this even the challenges Lagos is facing? Government should create an enabling environment. The source of funding for real estate is not funny now. At the rate of the current market, can you imagine someone borrowing to develop? They won’t be able to compete in the market. It’s not possible. Those who can borrow now and the people who can build and make their money instantly. If you factor in the cost of funding the man has to pay in 24 months, he won’t have another alternative but to increase his cost.
Talking about foreign exchange, what is the government doing to help with the local building materials? It’s like they are no longer functioning (the local manufacturers). We have recorded almost 500 increases in the price of rods in the last year. This is happening because of forex. If we have that machine in Nigeria, they will flood the market with supply. When we have Building Research Institute, many people don’t even know they exist. What has been the input of this institute? If they have come out with research on alternative ways to build. The truth is that many of us want to build with the materials we import from abroad but if the government says and insists they will subsidize the cost of producing these materials locally …
Take a look at the new Anambra governor, the day he was sworn in he entered the Innoson motor. I pray he sustained that. How many of our governors want to ride locally assembled cars?
Let me also draw you back a bit sir on the issue of house rent in Lagos. What would you do differently if you were in the position of the governor?
You have to start from what I said earlier, the government should create an enabling environment for people to build. For example, to get building approval in Lagos is HELL. Forget about what you see in newspapers that say government approval is in 30 days. It’s a LIE. I have friends who have been pursuing approval now for the past 4 years. And that’s why you see or hear some of these construction companies build without approval and that is why you hear of building collapse, but if you can settle, you will get your paper out.
Look at the Lekki/Epe axis, if the government can create an enabling environment like road, electricity, and water, the government will collect land taxes. Another thing is that, if you go for approval, the government will ask you for the land use charge on that land. The land use charge must be charged on land you have developed. But because they want to raise their revenue, they won’t mind.
Let the government encourage people to build more houses because the government will tax those houses. I have seen people who bought their cars in Lagos and the cost of renewing is expensive, I can move to another state and change my vehicle no and renew there. But you can’t do it with a house. When people buy a car now, people now move to other states to register, because it’s cheaper to register there. But you can’t do that with the property. Why don’t you encourage people to build and tax them? That’s what all these advanced countries do. I went to deliver a lecture a few months ago in Denmark, the Danish government is building an Island now called Energy Island. That Island is going to provide power to millions of households. Their population currently is not up to that. They have enough power already but they are thinking of the next 3 million generations. And this power is sustainable; power from the water. And we have oceans here in Nigeria.
If you want to buy a house and you have between Nigeria and Denmark where you are guaranteed basic infrastructure, where do choose?
How does the increment in the price of diesel affect facility management in general?
That’s an understatement. It’s creating serious problems for many of us. Look at airlines, as well. Somebody who was supposed to fly from Warri in the morning wasn’t able to fly till evening. They kept postponing and postponing because there was no aviation fuel. The diesel that we bought last year for 350 is now 800. The tenants in commercial houses now say “please don’t put on the generator for us”. Somebody (a tenant) called me that he wants his landlord to disconnect him from the generator because he has installed solar.
What can be done differently, as an expert?
It caught us unaware and beyond us as practitioners. The government is the major driver of the economy. The government needs to encourage investment in sustainable powers. In England, if you want to go for sustainable power, the government subsidizes the cost of providing it. If you go to Isreal, almost every house has panels on top of its roof because they have sun and this is a way of reducing what we need from the national grid.
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