Daily Independent (Lagos)
Bamidele Ogunwusi
5 January 2009
interview
New Chairman of the Lagos State chapter of the Nigeria Institute of Quantity Surveyors, Jide Oke, in an interview with CORRESPONDENT, Bamidele Ogunwusi, addresses the numerous dynamics in the housing/construction sector. According to him, the provisions of the NHF Decree should be revisited for mortgage sub-sector to meet the yearnings of teeming population of the homeless in the country. Excerpts:
How would you assess the state of the country's housing sector in terms of accessibility and affordability?
The country's housing sector for now is bedeviled by spiraling cost of building materials, which has made housing development works unaffordable to most people. And this is attributed to the prevailing over-dependence on importation in the industry. It is pathetic that as a country, we still could not boast of self sufficiency in local production of basic materials like cement. This is apart from others like iron rods and finishing materials.
Hence, the cost of housing is subject to the vagaries of government policies and interplay of foreign exchange situations. This was aptly demonstrated early in the year, when government pronouncement made price of cement to leap to N2,000 per bag from N1,300 while a tonne of reinforcement jumped to N230,000 from N160,000.
To improve the situation, government needs to stabilise the sector through a conscious and well articulated programme of incentive and encouragement to local producers of building materials. Enabling environment also should be provided with infrastructure and other schemes such as tax concessions and financial facilities.
Would you say that mortgage financing has succeeded in providing shelter for the average Nigerian?
One can notice a flurry of activities in the last two years or so in this sector with the establishment of some mortgage institutions in the country, following the recent re-capitalisation in the banking sector. This is gratifying, especially after the collapse of this sector in 1994, when in one fell swoop almost 150 mortgage institutions went under in this country. With the recent reforms of the financial sector and the return of mortgage, it is hoped that the environment is better sanitised and the platform stronger for successful mortgage practice.
But honestly, this has not really helped in alleviating the crunch in the provision of shelter in the country, at least for the vulnerable segment of the population, which is the low income.
What the present crop of mortgage institutions are involved in is commercial property financing, which truly is profitable to them if they must give adequate returns on investments, in view of the operating environment. For mortgage sub-sector to meet the yearnings of teeming population of the homeless in the country, we must go back to the provisions of the Mortgage Institutions Decree 53 of 1989 and NHF Decree No 3 of 1992. These are robust legislations which were products of the National Housing Policy of the Federal Government geared towards addressing the problems of shelter in the country.
All over the world where mortgage has worked in addressing the provision of housing for the low income, it has been through granting of loans to subscribers, with re-payment spread over a long period of time, at very low interest. Only through this can any low or middle income earners survive the choking effect of pay back at the prevailing high interest.
Government can ensure this by reviving the moribund National Housing Fund Scheme, which was launched several years ago with much fan-fare. It was meant to be a pool of cheap funds, which could be accessed by contribution in the scheme through the Primary Mortgage Institutions, which would thereby process loans to subscribers through the apex mortgage institution, Federal Mortgage Bank of Nigeria (FMBN).
But with the present regime of interest rates, access to mortgage loans for the purpose of housing is still largely non-existent because of its prohibitive cost. Except with a special window under the regulatory framework and credit policies of the CBN, access to cheap loanable funds for mortgage by the public would still remain unattractive to the financial institutions in the country.
Quantity surveyors have maintained that through appropriate cost and contract management techniques, a considerable amount of funds wasted through corrupt practices/inflated contracts can be saved. How can this be achieved?
Just as there are several procurement strategies, there are several management techniques with standard procedures and principles to ensure best practices. The bane of the industry has been greed and insincerity on the part of professionals and client organisations, especially public sector. These twin factors have been the root cause of corruption in contract execution. If all professionals should stick to what they were trained for without anyone over-reaching themselves there will be sanity in the system.
If the scope of works to be done is adequately ascertained and measured and cost can be ascribed to the measured work, room for corruption through insertion of provisional quantities and provisional sums will be minimised. Quantity surveyors have been trained and empowered under the law to measure all kinds of construction works, that is building, civil engineering (roads) and heavy engineering such as in oil and gas. And as cost experts, with appropriate measurement of these works, cost of the works is best ascertained, controlled and monitored by them on these projects.
Lagos has been identified as one of the world's fastest growing megacities. What is the quantity surveyors' role in ensuring a sustainable and cost effective transformation process?
As procurement and cost experts, quantity surveyors have a role to play in ensuring appropriate cost of projects at the pre-contract/award stage and monitoring of this cost during the supervision phase of the project. This is achieved through a combination of services which are offered by the quantity surveyors, such as feasibility studies of capital projects, cost modelling, contract documentation and procurement, contract administration and management, monitoring, programme management, project auditing, monitoring and evaluation of development as well as project management.
As Chairman of NIQS, Lagos State, what changes are you bringing to the profession and how do you intend to right perceived wrongs, if any?
Lagos State chapter is the flagship when it comes to activities of the profession. The next two years we will not only sustain the tempo, we will further raise the bar. We will concentrate fully on the marketing of the profession, that is taking the institute beyond the current level of obscurity. The focus this time shall be private sector. Visitations shall be made to organisations to preach the gospel of quantity surveying to them. Through this we intend to create awareness and also job opportunities for quantity surveyors. In achieving all these, we shall collaborate more with the media and for this I want to solicit for more cooperation with us in realising our objectives.
I thank you so much.
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