BusinessDay 22 Oct 2017

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30 BD SUNDAY C002D5556 Sunday 22 October 2017 SundayBusiness ‘Dead assets’ in housing deficit environment The deficit in the Nigerian housing market has become a sing song which not many people are ready to listen to. But it amounts to double jeopardy for an environment where this deficit exists to also have many of its assets described as ‘dead’. Housing deficit has remained an intractable problem in Nigeria which the country suffers and will continue to suffer from in many years to come. It is a major housing problem in the country but the ‘dead assets’ are another level of problem often muted and it borders on the value of the few residential houses in the country estimated at only 13 million units. Analysts estimate that over 90 percent of Nigeria’s total housing stock, which are largely self-built, are ‘dead assets’, meaning that they are not in any formal mortgage and therefore, equity cannot be built on them nor can they be used as collateral for bank loan. This is quite unhealthy in a country where housing is deficient relative to the huge demand. The housing sector in the country remains largely underdeveloped because government has failed to come up with the needed policy to grow the mortgage system which, in other economies, even in emerging economies like ours, drives housing development and homeownership. As a country of almost 180 million people, homeownership is said to be a little above 10 percent as against 92 in Singapore, while the housing demandsupply gap is well over 17 million units, with Lagos, the country’s commercial nerve centre, accounting for about three million of the deficit. There is no functional mortgage system and experts explain that the reason for the slow growth of the system is because of its relative newness such that many people don’t even understand why they should save their money in mortgage banks. “Of the over 10 million housing units in Nigeria,10 percent of which is self-built, only about 5 percent is in formal mortgage”, says Ajila Dare, a mortgage originator and adviser, adding, this means that, effectively, about 95 percent of home equity/savings in residential developments are ‘dead assets’. It is estimated that mortgage finance requirement for the country is over N50 trillion. Many residential developments were built or bought without recourse to mortgage due to the many constraints that have to be overcome in securing the facility from mortgage institutions. These constraints are regulatory, financial and operational. Land ownership and management is always encumbered by administrative difficulties, especially with the issuance of Governor’s Consent. Apart from poor land registry practices, compensation for land is based on ‘fair compensation’ which is in turn based on diverse interpretations. An overarching legal and regulatory framework for the housing industry is absent while limited access to long term funding; lengthy, rigid and ineffective foreclosure procedures; nonvibrancy of primary mortgage banks and low level of participation in the National Housing Fund (NHF) are some of the financial constraints buyers have to contend with. Talking Mortgage with CHUKA UROKO (08037156969, chukuroko@yahoo.com) Operational costs, manifest in high cost of housing developments such as building materials, land acquisition and transaction costs and reliance on expensive and conventional construction procedures coupled with inefficient land management and urban planning system also contribute to operational cost. Low level of infrastructure provision for housing units developed, skills shortage and insufficient capacity building are also part of the operational costs are issues that need to be addressed. Arguably, a major reason for the low mortgage facility for residential developments is mortgage operators’ demand for equity contribution as prerequisite for loan. But industry operators say such contribution is necessary for a number of reasons including the need to protect depositors’ money; need to hedge against default; lack of sound data-base on Nigerians among others. Equity contribution is as fundamental to mortgage lending as it is to regular flow of income and according to operators, banks usually demand this from loan seekers because there are institutional and regulatory developments that are still lacking in the industry. “We don’t have a sound database of Nigerians; the National ID Card is still struggling and foreclosure laws are still not strong”, says Toyin Banjo, a mortgage expert, arguing that if the banks had all the above issues resolved, they would give people mortgage based on their credit rating. According to him, as financial intermediators, it is the responsibility of mortgage banks to protect depositor’s money and for them to protect those deposits, they have to ask for something that would act as a back-up to the money they give out to borrowers. Property Logic With Akhigbe Dominic The Business of Real Estate has now taken center stage in every nook and cranny of our society discuss and undoubtedly so. This has to be, as Real Estate is done on a fixed factor called land while the demand for Real estate derivatives by man remains infinitely elastic. This week, am featuring my good friend, a maverick clergy The infinite value of Real Estate investment from the view of a respected gentleman who; out of love for his teaming congregation in particular and Nigerians in general resolved to share his experience with the awesome inherent returns in real estate. Paul Adefarasin on the Value of Real Estate Investment “One of the best places to buy land in the whole world, in fact the best place to buy land in the whole world, in terms of value is right here in Lagos Nigeria. The most expensive land in the world is right here in Ikoyi and Banana Island... That’s not conjecture, that’s fact, economic fact. Lagos is growing by 6000 people daily, that is nearly 2 million people every year. It means Land is becoming scarce, that is, if you buy land today, tomorrow your land will be worth very much money. You may not be able to afford Banana Island or Ikoyi right now, but please go and buy land somewhere quickly because God transfers wealth by giving you land. After a period of time after you’ve bought the land, He increases the value of the land, because you being on that land adds value to it, as a result, more people want to come. Anytime there is a major wealth transfer in the Bible, He gives the people He’s transferring wealth to, land. You have nothing in terrestrial terms unless you have land. My father bought land for something like £2000, nearly 50 years ago on Victoria Island. It was Federal Government or Lagos State government allocation on Akin Adesola. From the revenue he generated from building the house for free, because G-Cappa built it for him for free and collected the rent for 5-10 years and that was the payment for the house. That house or the two houses he built there paid my education and my brother’s education in the finest schools in the world… After it paid for my education and generated revenue, my family decided they were going to liquidate the property and they liquidated it and the value that came to me in my equity was phenomenal, from £2000, 50 years ago. It provided for me nearly the value of a million dollars. You don’t know what land you buy today for peanuts that will be millions tomorrow for your children to inherit. With the city that is exploding so massively as far as population is concerned, today we are buying land and there is hardly any land to buy. Tomorrow we’ll be buying floors like they do in New York. What land costs today, floors will cost tomorrow and there will be 100 floors, 50 floors, and 20 floors and if you own the land underneath those floors, you are multiplying wealth for your children. They will be kissing your photograph whilst you’ve been in the grave for 5 generations saying: “Oh we bless God for great, great, great, great grandpa” while your bones are rotten in Ikoyi cemetery and your spirit is dancing on streets of Gold… When you get land, it means God is securing your future, because real estate doesn’t just secure today, it secures tomorrow. My father bought land for nothing and it was not of much value then, but 50years later it’s worth billions. What you buy for millions today will be worth billions half a century from now, may be even less with the kind of population explosion that we have. Victoria Island: nobody wanted to buy land there, it was marsh, re-claimed land, but 50years later that property with buildings on it is worth a billion. We bought for N25 million, 10 years ago; House On the Rock bought just under 10 acres of property on the Lekki Peninsula for our worship site... today, without the brick and mortar on it, that land by the valuers is valued at N3 billion. In other words, we’ve created an asset base with 10 years differential of N3 billion with just N25 million. When you put the building on it and is finished and furnished, they told me the value will be at least 10 billion naira today. What about 50 years from now? … Go and buy land and go and buy it quickly because without Land you are not really a power base.” As we say in the respected legal profession; a word is enough for the wise!
Sunday 22 October 2017 C002D5556 BD SUNDAY 31 SundayBusiness Spiritonomics Death is living Debo Atiba www.spiritonomics.org There are some words that take away all the joy from a man’s heart when they hear it. One of such is the word “DEATH”. It connotes lifelessness, helplessness, hopelessness, forlornness. It brings sorrow and it takes beauty out of life. How many people will agree with me that death actually is the beauty of life? A life without death is a life not worth living. It is a life that is sour, tasteless and bitter. Such a life is valueless, drab and uninteresting. The design of God for us is to find life in death. We may never enjoy the beauty that the Word of God has for us except we die. “Unless a grain of wheat falls into the earth and dies, it remains just a single grain; but if it dies, it bears much fruit (John 12:24)”, our fruitfulness in any area of our lives is a function of death to unfruitful- ness. At every point in time in our lives for us to move from one stage to another stage it requires some form of death. Poverty has to die to attain prosperity; illiteracy has to die to attain literacy. Sickness has to die for health to surface. To function in faith, fear has to die. In order to live life to the full, there has to be several deaths in different aspects of our lives, which we may not be conscious of when they are taking place. Our perception in life truly determines our outcome in life. If death is perceived wrongly, we would get wrong results which would end up in death the way we all know it. Our definition of death must be redefined in the light of the finished work of Jesus on the cross of Calvary. When we walk in this light that “Death is Living”, then we stop being afraid and it no longer has any clutch over us. The fear of it loses its grip on us. The only known enemies that have held us in bondage all through our lives is Death and Fear. This duo has so much grip on mankind that it prevents from accessing the beauty of life in death. Inside each word spoken by God, lies life and the benefits of life. It takes the discerning and the spiritually intelligent to come to term with this truth. Jesus Christ said “the word that I speak unto you are Spirit and life’’ (Jn.6:63). However, the fear of death prevents us from harnessing the truth in the spoken WORD. If you are not ready to lay your life down in death you can never succeed in business as designed by God. Every patriarch that ever did exploits and was celebrated was a person that was familiar with the beauty of life in death. In order for the seed promised to Abraham by God to come into existence, he celebrated and relished death( … he considered his own body not being dead, neither the deadness of Sarah’s womb, against hope he believed in hope- in death he believed in life and fully persuaded that life could come out of death….) Same for his son Isaac, who was ready to die believing God’s words that his seeds would multiply in famine. And because of this belief system brought about by the spoken WORD of God, he recorded unprecedented result in business that stupefied the entire country at his time. All of this is as a function of readiness to die for what God said. Planting in famine was like a suicide mission, while others were fleeing. If you are not ready to lay your life down to take God at His word by dying to your senses, you can never work in divine health. It is only when the WORD of God has become your life and you are ready to die for the truth in the word of God that says “…by His stripes you were healed”, that is when you are truly beginning to live. You must take your stand on the WORD even with disease and sickness ravaging your body, and symptoms screaming loudly in your ear that you are going to die. You’ve got to be ready to die before you can LIVE under such a circumstance. It is only people that are dead that can truly live because they have lost their fear of death and have lost their fear of fear itself.(Hebrew 2:14-15). There was neither help nor hope for Shadrach, Meshach, Abednego and Daniel. The only option they had was death and they went for it and they lived. Many times in our lives and businesses we would be confronted with situations that look like death and circumstances of destruction. However, it is our interpretation of the circumstance and understanding of the beauty of life in death that makes for living. We know for sure it may look like death but resident inside that situation is life, and life in abundance. If death was not present Jesus would not have spoken about the LIFE He brought (Jn. 10:10). If you are not dead you cannot live when the economy is crashing, the pillars that are supposed to hold the world together seem to be collapsing and fear seems to be the order of the day. You cannot claim to be living when the fear of death has paralyzed you. Life is not worth living under such a condition because, you are already dead, and it’s just that you do not know. I believe recognizing the beauty that is in death as expatiated and appropriating it makes for true living. Not embracing this truth and living in fear has killed you already. Every truth written in the word of God remains on the pages of the Bible alone and are ineffective, until we are ready to die (to dare to believe them and act on them even when the circumstances are contrary) otherwise we may never birth the life that they possess. Beloved, scriptures says “oh death where is your sting… (1 Cor. 15:55)” As you stare death in the face whether in your business or career (through sack letter), remember resident in that situation is life that Jesus brought. Remain Blessed Stanbic IBTC Bank appoints Essien to its Board of Directors Dangote, Ovia, Ezeh, others for IoD Fellows’ Award Stanbic IBTC Bank, a member of Stanbic IBTC Holdings PLC, has announced the appointment of Mrs. Miannaya Aja Essien, a Senior Advocate of Nigeria (SAN), to its Board of Directors as an Independent Non-Executive Director. Her appointment took effect from Wednesday, September 27, 2017 following the receipt of all required regulatory approvals. Essien, a Fellow of the Chartered Institute of Arbitrators as well as a Notary Public, is the Managing Partner and cofounder of Principles Law Partnership, a firm of legal practitioners, arbitrators and notaries public with offices in Port Harcourt and Lagos. Her appointment, according to the Chief Executive Stanbic IBTC Bank, Demola Sogunle, is expected to strengthen the board as the institution implements its growth strategy, while reiterating Stanbic IBTC’s commitment to continually entrenching the highest standards of good corporate governance practices and to ensure that the interests of all its stakeholders are well served. “We are honoured to have Essien join the board of Stanbic IBTC Bank. Her wealth of knowledge and experience in business and commercial law and the protection of shareholders’ rights will provide unique insights in our deliberations and add impetus to our strategic focus on building a great institution Miannaya Aja Essien that everyone will be proud of,” Demola stated. An alumnus of the Universities of Nigeria, Nsukka and Lagos, Essien obtained her LLB (Hons) and LLM, respectively in 1984 and 1991. She was called to the Nigerian Bar in August 1985. As counsel, the Learned Senior Advocate leads complex corporate and commercial dispute resolution matters in Nigeria and internationally across the oil and gas, banking and insurance sectors. She also acts as sole arbitrator, panel member or as chairman of various arbitral panels. Stanbic IBTC Bank is a member of Stanbic IBTC Holdings PLC, a full service financial services group with a clear focus on three main business pillars - Corporate and Investment Banking, Personal and Business Banking and Wealth Management. Stanbic IBTC belongs to the Standard Bank Group, the largest African financial institution by assets. It is rooted in Africa with strategic representation in 20 countries on the African continent. Standard Bank is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure Seyi John Salau The President of the Dangote Group, Aliko Dangote; Chairman, Zenith Bank Plc, Jim Ovia, Chairman, John Holt, Christopher Ezeh top the list of 41 eminent professionals and business leaders to be conferred with Fellowship Awards at the 2017 Fellows’ investiture of the Institute of Directors (IoD) Nigeria on Thursday 26 October, in Lagos. Dele Alimi, director general/ CEO of the Institute, in a statement said the Fellowship Award is for members with a minimum of 10 years directorship experience in reputable organisations and have distinguished themselves over the years, both in the activities of the institute and the country at large. According to him, the event will feature Chidi Izuwah, acting director-general, Infrastructure Concession Regulatory Commission (ICRC) as the Guest Speaker, on the topic ‘Infrastructure Development as a Means to National Growth’. Speaking further on the investiture, Alimi said a major highlight at the event is the conferment of Distinguished Fellow Award on some past Presidents of the Institute, Eniola Fadayomi, chairman, Africa Prudential Registrars and Samuel Yemi Akeju, CEO, De LaRue Systems Centre, Dangote Godwin Emefiele, Governor, Central Bank of Nigeria and Justin Emmanuel, Chairman, Thorbourn Investment Ltd. The DG/CEO added that the aim of the Awards is to raise awareness on the significant role and contribution of business leaders, public office holders and corporate entities in bringing about economic prosperity to the society. Among those to be upgraded as fellows of the institute are Ifie Sekibo, MD/CEO, Heritage Bank, Oyetunji Oyebanji, Chairman, Mobil Oil Nigeria, Bello Mahmud, Registrar General, Corporate Affairs Commission, Umaru Ibrahim, MD/CEO, Nigeria Deposit Insurance Corporation (NDIC), Olusegun Omosehin, MD/CEO, Mutual Benefit Assurance Plc; and Ambrose Feese, Director, First Bank Nigeria among others.
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BusinessDay 22 Oct 2017

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