Many unoccupied estates product of money laundering – Wamakko

Alhaji Aliyu Wamakko is the immediate past President of the Real Estate Developers Association of Nigeria (REDAN). In this interview with Daily Trust, he attributes the lack of regulation in the real estate sector which has led to the production of massive estates by individuals siphoning government funds, resulting in the rising number of unoccupied […]

Alhaji Aliyu Wamakko is the immediate past President of the Real Estate Developers Association of Nigeria (REDAN). In this interview with Daily Trust, he attributes the lack of regulation in the real estate sector which has led to the production of massive estates by individuals siphoning government funds, resulting in the rising number of unoccupied buildings across the country. He also proffers solutions to other issues affecting the sector.

 

Amid the huge housing deficit in the country, many estates in major cities are completed but lying unoccupied. What is the issue and how can it be addressed?

You know the issue of unoccupied estates is a mind-boggling one not only to Nigerians, but to us developers and also to the government as well. Internationally, there is what we call the Financial Action Tax Force. This Financial Action Tax Force is gauging and supervising the money laundering issue of all the countries in the world.

Section 11 of Money Laundering Act and Terrorism clearly states that anyone who acquires, uses, retains or takes possession or control of any fund or property, knowingly or reasonably, ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act; commits an offence of money laundering and the EFCC’s special control unit against money laundry and the NFIU sat with us when I was REDAN president to find ways of tackling this.

Subsequently, before my tenure ended at REDAN this year, we crafted “Real Estate Regulatory Council of Nigeria, 2023” which is targeted at fully regulating the sector and also curtailing money laundering in the country. It had inputs from all the regulatory institutions; all the state commissioners, all the professionals in the built industry were part of the drafting  and was eventually passed by the 9th National Assembly and later transmitted to President Tinubu on 9th June for assent but he declined assent.

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So, all these houses that you are seeing are a product of money laundering from the people who stole money from the government and they don’t even want to put a signage to indicate any name of an estate developer, because they are proceeds of crime, they are just building as the money is there.

There are so many of them in Abuja, in Port Harcourt in Lagos, in Kano. If you go, you will see so many of them.

We deliberately initiated the bill to protect the interests of the developers. Nigerians and even the government refused to sign that. If the government signs that bill, you will not be talking about unoccupied estates because there will be regulation and if you want to erect any estate, you must register, be licensed and be known, but unfortunately, we don’t have one and the issue may continue to linger.

What are the options for developers since the bill was declined assent by the president?

A bill that has been passed in the Senate, and also the House of Representatives, presented for assent to the president but was not signed? What else do you want us to do? The idea is to protect and regulate the sector and also reinforce the National Building Code but unfortunately as it stands now, we can’t do much with regards to the rising cases of unoccupied estates even though it is also affecting us as developers because many of those erecting these estates are not known.

What is your perspective on the recent cost of building materials and properties; what do you think can be done to arrest the situation?

Believe me sincerely, a lot of things have caused the skyrocketing prices of building materials in Nigeria. The major ones are inflation, high transportation and unstable exchange rates. You know most of the building materials are imported and transporting them has also increased, so these are the issues that cumulatively increase the cost of building materials.

What can be done to address the issue?

Yes, we are having about 40% of the African housing deficit in Nigeria. Africa has about 55 million housing deficits, while Nigeria is having about 20 million or even more out of it because this data is from the Shelter Afrique Housing Development Bank. So, the most important thing I think that can be done is to provide some form of subsidy for the housing sector, that will go a long way in reducing the cost on developers and the end user.

How can Nigeria develop an alternative to funding the real estate sector since borrowing from commercial banks is high?

For now, you can’t borrow money from banks at 38% interest and you expect that you can build a house and sell it at an affordable price.

So, the alternative now is if the government wishes, under the Renewed Hope Housing Estates, it can channel the money meant for houses to developers who can now borrow at single interest rates, maybe 9 to 10 per cent and provide these houses. So, instead of giving it out to some contractors to build these houses, the government will channel these mortgage loans to registered developers and we develop these houses. We will repay and also pay necessary tax, so it is a win for everyone.

What is your firm, JEDO Investment Company, doing to bridge the housing deficit in Nigeria?

So far, we have built about 700 houses in Lugbe at an affordable rate and also 108 houses in Kano in conjunction with the Federal Ministry of Housing, which is in Katsina Road under their Ministerial Pilot Housing Scheme. So far, we have produced roughly more than 1,000 affordable housing units to the teaming population of Nigerians who are currently residing in them.

Our current project is the 250 housing in Sokoto which is meant basically for NHF contributors, and we have already started but we are also working alongside with the Federal Mortgage Bank and Federal Ministry of Housing so that they are being provided at a cheaper and affordable rate.