House prices in Nigeria are among the global highest and this is as a result of construction and other extraneous costs which developers factor into the price tags they put on their houses.
This is unlike what obtains in other African countries, including Gambia, which holds out a few lessons for Nigeria, the continent’s largest economy, on how to build cheaply and profitably.
Among the smaller African countries, especially those within the West African sub-region, Gambia, a country of about 2 million people, is quite aspirational. Besides being a tourism hub, the country aspires to be the Dubai or Singapore of the sub-region.
Despite its small-size population and economy, the country is bullish in housing and other real estate developments and those who are involved do so cheaply and profitably.
“We need to readjust our designs to incorporate efficiency, affordability and functionality,” advised Mustapha Njie, CEO, Taf Africa Global.
Taf Africa Global is a real estate investment and development firm with very strong footprints in Gambia and Nigeria where it has invested about $100 million and delivered close to 10,000 housing units. The company which, at the moment, is developing 375 housing units for low mid-income earners in Gambia, says it is de-emphasising social status, advising that people should do so in making demands for their housing needs.
“Developers need to de-emphasise going horizontal which consumes a lot of land. There is need to go vertical and there is no other choice. In Lagos, for instance, people are already going up and that is the new way to go,” Njie noted.
Nigeria lags many of its global and continental peers in easy of doing business generally and registering property in particular. In the Gambia, it takes one month to perfect all land documentations and Njie says that is the worst case scenario. “It can be less; for us, because we have been doing it over time, it takes us about two weeks to get all our papers; all we need is just stamping,” he said.
This is a big lesson for Nigeria where it takes much longer time to register property, piling pressure on property developers, especially from their lenders, and also delaying project delivery timeline and frustrating investment interests.
Getting land documentation or titling in the country is a rigorous process, given the bureaucracy, corruption and the high cost of acquiring the title.
In its recent report, PWC estimates that 95 percent of households in Nigeria have no title, pointing out that it takes an average of 12 procedures and 105 days or as long as two years to register a property.
The cost of getting this done, according to PWC, is about 11.1 percent of the property value. “This process is made difficult due to the low quality of land administration in a city like Lagos.
This does not encourage formal declaration of assets and discourages people from registering their properties,” the professional services firm noted.
Nigeria ranks 149 on the ease of obtaining Construction Permit and requires 17 procedures, 118 days, and 27.5 percent of property value, a factor that encourages more informal construction of properties and increases risks in the real estate sector.
In Lagos which Nigeria’s economic heart beat, it is estimated that 97 percent of lands in the city is unregistered, making it difficult for banks to validate claims to land or for land occupants to use their land to create wealth. This, more than anything else, accounts for Nigeria’s over 17 million housing units deficit.
CHUKA UROKO
