BusinessDay 12 Dec 2017

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22 BUSINESS DAY C002D5556 EXCELLENCE IN PUBLIC SERVICE AWARDS Tuesday 12 December 2017 Transforming NSIA into a vehicle for sustained... Continued from page 21 2016. This follows commitments made in 2015 which included investing in LUTH (Lagos University Teaching Hospital) to create a centre for advanced medicine; development of diagnostic centers in Kano and Umuahia and creation of a joint healthcare fund with the Federal Ministry of Health to address tertiary care in six teaching hospitals through the provision of advanced centers of medicine. The specialties expected to be covered by these facilities include oncology, cardiac surgery, cardiology, neurosurgery, orthopedic surgery, and other vital medical services as these account for over 80% of medical tourism. Ogun State Land Reforestation and Waste to Energy Project NSIA entered into partnership with Ogun State Government and Lafarge Africa which comprises three sub-projects; waste to energy, land degradation neutrality, and bio-fertilisers The project aims to help transform 108,000 hectares of heavily degraded land into an arable green area, using the latest techniques in agro-ecology and agro-forestry. Second Niger Bridge (2NB) In the period under review, the NSIA saw to the completion of Early Works III on the site. Following this, the Authority proposed a revised funding plan to the Ministry of Power, Works and Housing which is under review. Once a new financing strategy is agreed upon, the next stage of construction will commence. ment of the following institutions in recently: Infrastructure Credit Guarantee Limited - InfraCredit In partnership with GuarantCo, a UK-based provider of infrastructure credit guarantees supported by the governments of Australia, the Netherlands, Sweden, Switzerland and the UK, the NSIA took steps to complete the last mile for the establishment the Infrastructure Credit Guarantee Limited, InfraCredit in Q4 2016. NSIA has committed US$25million of equity and InfraCredit is capitalraising for the remaining US$75 million ofcore equity. GuarantCo is leading theprovision of matching contingent capital.InfraCredit commenced operations in Q1 2017 and has already obtained a National Scale Rating of AAA(NG) rating from both Augusto & Co. and Global Credit Rating Co.(GCR). InfraCreditis a mono-line insurance company designed to provide credit enhancement of local currency debt instruments. When fully functional, it will facilitate an infrastructure bond market of up to $2bn and make it possible for pension funds and insurance companies to invest in Infrastructure Creation of Financial Institutions that enable investments in Infrastructure: The NSIA concluded the establishvia credit-enhanced bonds. Development Bank of Nigeria (DBN) NSIA holds equity in the DBN on behalfof the Federal Government of Nigeria. Within Q1 of 2017, DBN was operationalized having obtained its operating license from the Central bank of Nigeria (CBN). The Bank has already created a line for up to N5billion to be accessed by MSMEs through its partnerfinancial institutions. Family Homes Funds Limited (FHFL): The Family Homes Fund Limited (FHFL) was incorporated and commenced operation in 2016. A flagship initiative of the Honourable Minister of Finance, FHFL is designed to create a blended pool of long-term funds to solve the problems in mass housing development and seeks to provide affordable homes and mortgages. The target N1trillion Fund (N500bn initial) will bridge the gaps in housing development finance and mortgage provision.This company has already commenced business with the purchase and expansion of social housing estates in Nassarawa State. Projects are already underway in more than 8 states of the Federation. Nigeria Commodity Exchange (NCX): The investment opportunity was presented by the FGN’s desire to revitalise the NCX via a strategic privatisation option involving a preprivatisation phase and a full privatization phase. This was proposed by the Bureau of Public Enterprises (BPE) and approved by the National Council on Privatisation(NCP). NSIA indicated its interest to participate and was granted approval for the pre-privatisation phase. The pre-privatisation phase involves a revamp of the NCX to make itoperational, efficient and sustainable, which is a pre-condition for privatisation.It is envisaged that NSIA will, during thisphase, come in as a strategic coreinvestor with a technical partner as the exchange operator, after which NSIA willdivest during privatisation. It is envisagedthat NSIA will operate the NCX for ashort period and exit thereafter. Third Party Asset Management: The Authority continues to manage the $350 million asset for Nigeria Bulk Electricity Trading Company (NBET) and the $100 million asset on behalf of the Debt Management Office (DMO). It also continued to manage a portion of the Federal Governments StabilisationAccount (FGN Stab.), a Naira denominated fund which had commenced in late 2015. As at year end 2016, the NBET fund returned 5.42% while the Stab. Fund returned 11%. The DMO Fund was invested in the 10.25% senior secured notes due by 2021 issued by Seven Energy, an integrated gas company in Nigeria, for the purposes of developing the gas pipeline and provide gas to major gas off-takers within the power sector of the country. However due to delays in payments for gas consumption and the challenges being faced in the Niger Delta region which led to a shut-down of Forecados export terminal, Seven Energy under-performed during the year and plans are underway by Seven Energy to re-structure its terms with lenders and investors. ‘DMO will support initiatives that boost public... Continued from page 19 years. As the name says, savings bonds, it is that product that you can invest your money over time, whether it is two or three years’ tenures, or both depending on how you want to spread your investments. We want to use it to encourage savings among the small savers, associations, the promoters of Esusu scheme and the retail investors. We are using our agents for those agencies, stock brokers and we have 135 of them. So, any investor who wants to buy that product, just talk to your stockbroker, and it is sold also once in a month. The first non-interest product we have for the domestic market is the Sukuk which we just introduced. The Sukuk, unlike the other products, is a security that earns income and not interest. With the Nigerian Treasury Bills, the FG Nigerian bonds, the FG’s Savings bonds, the investor gets interest. For the Federal Government of Nigeria’s bonds, you get your interest paid every‎ six months, and it goes straight into you banks’ accounts. There are no warrants that are sent out, no dividends; you just get paid. So, when you are applying you fill your bank details and get paid via you bank account, and if you have account with Central Securities Clearing System (CSCS), your transactions will be linked to it. You get paid every six months the interest that is due to you. So, if you have invested for three or five years, you have money coming to you, at six months interval so that you can also meet your needs. Because the FG’s Savings Bonds are targeted at small investors, we pay interest every quarter, meaning every three months, meaning that in a year, you get interest paid into your account every four months, so that you meet cash flow needs. This is how they have been structured, to meet different needs of the people in line with different preferences. You get interest payment and it is very simple; the Central Bank of Nigeria is the Banker to the FG and it pays to the account of the investors. Talks us through your Sukuk product, and how attractive is it? With the Sukuk, it doesn’t pay interest, it pays a rental income. The Sukuk is not an interest bearing security, and when you invest in it, you still get income, and you get that income every six months. The difference between the Sukuk and the regular bonds is that we refer to the other bonds I earlier mentioned as conventional because they are regular, and are more common ones that people are aware about. You invest in it, you get an interest. With the Sukuk, we usually refer to them as non-conventional, in the sense that what you get is income not interest payment. In addition to the Sukuk, you are given money to the government for a specific purpose not to just fund the deficit in budget. In September 14, 2017, the DMO announced an offer of a Sukuk for a hundred billion naira, it has been approved by all the authorities concerned and the CBN has given the product a liquid access status. The Federal Inland Revenue Services (FIRS) also gave it a tax exempt status, meaning that the investor gets all the income due to it. The regulatory body at the central bank responsible for approving non-interest bearing product has also certified it for meeting all the requirements. Like all our securities, it should be listed in the financial markets in what we call FMDQ-OTC, and over the counter securities exchange, so that those investors who buy and wants to sell later could buy more and even sell there. It would also be listed on the Nigerian Stock Exchange which most of us are familiar with, so that you can buy and sell it on the stock exchange through a stock broker. The DMO recognises the various initiative and policies under President Muhammdu Buhari and the DMO will support initiatives that boost anti-corruption program, public finance management and reforms. ... the publication Contnues tomorrow
C002D5556 BUSINESS DAY 23 Tuesday 12 December 2017 Homes&Property In Association Deconstructing approach to developing new urban communities ...as developer says ‘new urbanism’ goes beyond building cities Stories by CHUKA UROKO The craze driving the development of new urban communities commonly called ‘new urbanism’ which has received billions of dollars investment in Nigeria in the last five to 10 years following rising urbanisation and growing demand for housing, has been faulted for lack of concerted approach and low consideration for countryside or village life and setting. New urbanism is the art of creating new urban communities within existing cities to cater for the growing population and the emerging class. Some new developments such as the Eko Atlantic, Orange Island and Gracefield Island in Lagos; Centenary City and Asokoro Island in Abuja, and the Rainbow Town in Port Harcourt are typical examples of new urbanism or emerging urban communities in Nigeria. Yinka Ogunsulire, MD, Orange Island, explains that these are urban design movements that promote walkable neighborhoods containing a range of housing and job types. “The principle has gradually influenced many aspects of real estate development, urban planning, and municipal land-use strategies”, she adds. In Nigeria as in the rest of Africa, new urbanism has developed as a response to congestion in the cities like Lagos where housing, school places and hospital beds are in short supply and commercial rents are cut-throat. These urban communities are usually planned to be built from scratch on the edges of existing metropolises; there is often a level of government involvement, making them joint venture projects; they are privately managed/self governing; and there is improved professionalism in delivery and marketing. “These new cities will bring the dream of hassle-free modern living to those who can afford them; security, running water, electricity, shopping and reliable communications”, Ogunsulire assures. Olufemi Babalola, CEO, Gravitas Investment Limited, developers of Gracefield Island, affirms, but says there are some holes to pick in the approach to new urbanism in Nigeria. “I don’t think we have a concerted approach to new urbanism in Nigeria. We don’t have a conscious approach to developing what is called new urbanism here. We have to define an urban area and what is new in what we are doing”, Babalola said in an interview. In more and better organised society, when people are successful in the city, their ambition is to go and live in the country side or what is called the village here. This means that contrary to what government ministries are doing, regions have to be planned before the urban area. Babalola believes that for new urbanism to truly happen, the region or countryside has to be developed. “We have a situation in Lagos that if we are not careful, we won’t have a countryside. We may despoil them. What is happening now around Eleko Beach, Epe and the free trade zone gives cause for concern. What would have been a beautiful countryside serving the urban centres like Ikeja, Lekki etc, is fast-going. What is happening is that from being a village that area is degrading into a slum and from there it will start coming back to town or city but one that will be poorly organised”, he said. New Urbanism, he explained, basically has to do with a whole new area like what they have in Gracefield Island. There should be a conscious effort to develop such an area into a city and that is what Eko Atlantic and Orange Island are doing. “But, that idea as it is going now is being compromised”, he lamented. He noted that all the developments in Ikoyi and Victoria Island have their access roads as fterthought, citing instance Ikoyi in Lagos as an example. According to him, government did not decide on the final point of access road from the beginning of Third Mainland Bridge down to Dolphin Estate and Osborne Forehsore until after 20 years whereas it is an access that would have been approved from the start. The emerging communities are not any better and Babalola is saying that “with all these contradictions, you begin to ask yourself if this is the new urbanism; what is actually new about this these developments? Why can’t we do it properly? To do it properly, he advised, there should be a combination of efforts between the government and the private developers and we have to accept that all of us must jointly develop the city so that my effort must not necessarily adjoin an existing public infrastructure. He revealed that at Gracefield Island, they are doing a two-kilometre road. “We need to ask what is the best standard of living that we can offer to our people and to the real estate market”, he advised further. Babalola pointed out that there is more to new urbanism than just building cities or what many prefer to call smart cities. “You cannot have a smart city without technology and you cannot have technology without education. So, we cannot have a smart city when our primary school children are studying under the tree. We can’t have a smart city when there are young men and women that are illiterate, and there are under aged children working at construction sites and trading on the streets”, he said. His idea of a smart city is a town in South Korea called Songdo which he described as “one of the best real estate markets in the world. This is the smartest city in the world. It is so smart they don’t waste energy and time. If you a pedestrian, when you arrive at the pedestrian crossing, there is a sensor that will know you have arrived there. It should also know that you shouldn’t stay for more than 30 seconds at the crossing”. For him, therefore, new urbanism should be able to build confidence in people; they should feel secured and as country, Nigeria must have such communities. “New urbanism must be able to create communal interest or sense of communities”, he said. Broll underscores real estate potential as Nigeria diversifies economy As industry analyst forecast which shows that the real estate business in Nigeria is expected to grow at an average rate of 5.39 per cent between 2017 and 2020, is sufficient reason for the country to give special attention to sector as it diversifies the economy, Broll Broll Nigeria has said. The award winning and trends advisory firm gave this hint and highlighted Nigeria’s vast investment potential among the comity of nations at West African Property Investment Summit (WAPI) 2017 in Lagos recently, noting that Nigeria has proven itself to be a power house in West Africa and has great potentials to attract investors Bolaji Edu, Broll Nigeria’s CEO, who spoke at the summit where Broll was the platinum sponsor, said, “it is time for Nigeria to diversify to other sectors of the economy and real estate has proven to be a viable sector to attract investors from Africa and other parts of the world”. Continuing, he said, “the fund managers and asset managers with the property skill sets are able to drive excess returns. Essentially, we have good quality grade A stock which are developed by local investors and international private equity firms as well, but we will have stabilized returns going forward in many areas that the markets in West Africa is targeting.” He highlighted the potentials of growing the pool of domestic capital into real estate, saying, “generally, investment focus has been in the Grade A commercial office and retail sectors. What we are yet to see is the development of good quality Grade B or Grade B plus investment which is targeted at the domestic occupier market and domestic institutional investors.” Edu also pointed out the need to look to rebalancing the economy and improving domestic manufacturing output. “Together with infrastructure improvements, this will open up more sectors for investment, including logistics and warehousing”, he said.
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