Africa Housing Show will exploit capital market for housing finance – Adebayo

Barrister Festus Adebayo is the Chief Executive Officer (CEO) of Africa International Housing Show (AIHS), an annual advocacy and exhibition platform in the housing and construction industry. In this exclusive interview, he says the 2022 edition will focus on exploiting the capital market’s non-interest funding for the housing sector and also discusses the impact of […]

Barrister Festus Adebayo is the Chief Executive Officer (CEO) of Africa International Housing Show (AIHS), an annual advocacy and exhibition platform in the housing and construction industry. In this exclusive interview, he says the 2022 edition will focus on exploiting the capital market’s non-interest funding for the housing sector and also discusses the impact of climate change on affordable housing. Excerpts:

2022 is the 16th edition of AIHS. What have you achieved so far for which you can beat your chest and say this is the impact you have made in the housing sector in Nigeria?

For 16 years we have been very proud of what we have been doing. We have brought housing advocacy to the forefront. We have made people to know that housing is very key to productivity, to security and to human development. You hear people mostly talking about oil and gas, but we have been talking about housing. We have not only been doing it through AIHS; we have been doing it through other platforms to sustain the campaign.

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And apart from bringing housing awareness to the forefront, we have succeeded in influencing a lot of government policies, because that is one of our targets. We have at various times advocated the establishment of institutions that will be responsible for low cost housing and social housing,  and I can tell you that we have it today – Family Home Funds (FHF).

Before the advent of FHF, we struggled in the course of our 16 years of existence to stress the need for mortgage refinancing, and during the tenure of Dr Ngozi Okonjo-Iweala as finance minister, the Nigeria Mortgage Refinance Company (NMRC) was established. All these institutions are products of our advocacy.

We started with the name Abuja Housing Show (AHS) and people came from different countries and they decided that the show was bigger than AHS. So we changed the name to Africa International Housing Show (AIHS).

With that development, AIHS’ next edition would be held in Rwanda, after that it would be held in Kenya, the 2025 edition would be in Uganda and the 2026 edition in Morocco.

Still talking about our impact; we have on our record that over N100bn transactions have taken place on the AIHS platform, and that’s why we have not lost any sponsor or partner in the 16 years. Even when we increase the participation rate due to inflation in the country, they still find their way to come.

Besides, AIHS has provided home ownership training for over 22,000 Nigerians who had no hope of owning their homes. As you might have observed, AIHS is a platform where you meet mortgage banks, where you meet real estate developers, where you meet building materials organisations and the whole construction industry value chain. So it is easier to get what you want to get on the platform.

We have influenced government policies through our communiqués at the end of every show every year. I remember we issued a communiqué some time ago requesting state governments to do more in the area of land information system, and today we can boast that almost all the 36 states of the federation have digitalised their land information system.

On the other hand, we have not been able to get 100 per cent political will from the government to support housing. We have advised government to go for housing and the country will spend less on health and on banditry. A man who has a house will think of how to get a wife, and when he gets married and you invite him to come and join a criminal gang, he will not go. And you don’t expect a man who is a tiler who has been working from morning to 5pm to still get the strength to go to Area 1, Abuja, in the evening to say he wants to do pick pocket. It is when there is no money and no house that they go into crime. Promise a man he will own a house after working for you for a period and I can assure you he will not disappoint you. And that’s why we have called on the government to link agriculture to housing. If you do that, a man from Otukpo will not leave his village and come to Abuja. What is affecting housing in Nigeria is rural-urban migration. He will remain in Otukpo and continue farming, and as he is going to his farm every day, he sees construction of the housing units going on and having been promised that the units will be delivered in two years, he will be motivated to improve his farm production.

How do you finance this model of housing, especially that mortgage is a major challenge to home ownership in Nigeria?

I was invited as a guest speaker on a programme organised by the Central Bank of Nigeria (CBN) and the focus was how do you make the mortgage system work? Our mortgage sector is not working because the government is not interested in it. There is nowhere in the world where you see real estate doing well and it is done on cash and carry. It was when the mortgage system crashed in the US that the country went into recession. As at today, the mortgage contribution to US GDP is not less than 65 per cent. In Nigeria, we have 0.05 per cent. The contribution of mortgage to Ghana’s GDP is bigger than that of Nigeria. The other time the government announced that there was a N200bn intervention, but I am still asking, where is the money? So what is wrong with the mortgage system is that the capital base is not there. The cost of housing in Nigeria is high and the only mortgage in Nigeria that is offering interest rate below 10 per cent is the Federal Mortgage Bank of Nigeria (FMBN). Commercial banks are giving 25 to 30 per cent. So this is not within the affordability rates of those who need the mortgage.

Does government have the political will to tackle these challenges?

Part of what we will be doing at the AIHS 2022 will be to hold a political dialogue. We will talk to the political leaders. We want to educate them on the benefits of investing in housing. The political will is not there, the access to land is encumbered, our land administration system is not working. You cannot be talking of mortgage system where there is no effective land administration. You cannot be talking of effective mortgage system when there is no foreclosure law. Majority of the mortgage banks have gone down because there is no foreclosure law to protect them. Another threat to mortgage in Nigeria is corruption. Our culture, our socio-economic thinking is also a problem.

What is going to be the focus of this year’s AIHS, and by way of projection, how would it impact the housing sector differently from other editions?

Let me inform you that this year’s edition will discourage talking; we will focus more on practical discussions on housing finance. We must have alternative funding because we cannot continue to be going this way of interest rates and debarring Nigerians from owning homes. So on that note, this year’s edition is going to be different from the previous ones because we are going to explore all options. We have mobilised banks that are into non-interest finance. For instance, Jaiz Bank is the one that helped Brains & Hammers to finance most of its estates in Abuja. So if it has worked with Jaiz Bank, we want to see how it is going to work elsewhere. It is very important and we are going to look into it.

Apart from that, we would be looking at capital market funding to increase housing supply. The simple law of demand and supply is that when the supply increases the prices go down. The biggest threat to housing in Nigeria today is pricing, and that is why you have some of the houses unoccupied. So we have assembled capital market people, including Mr Oscar Onyema, the Group Managing Director of the Nigeria Stock Exchange (NSE), to dissect the topic: “How to Use Capital Market for Housing”. This area has not been exploited in Nigeria, but it has been exploited successfully in other climes.

We will also do property technology because the world is going digital and AIHS will champion that. We have called leaders in that sector and the start-ups, because with property technology, we can raise a lot of funding for housing. We have 31 international speakers and over 400 exhibitors on ground.

One wonders why climate change does not feature in your discussions considering how important an issue it has become globally?

I don’t agree with you. Another area that will make this year unique is that we have a session focusing on learning from experience; building on what has worked in other countries. So we are going to have a session for success stories for people from Morocco where 65,000 houses have been built this year. The chief executive of the social housing agency will be here with us and will tell us the magic.

Beyond that, affordable housing and environmental resilience, green housing and green funding, which are very important to us, will be discussed. We will be looking at the effects of climate change on affordable housing.