|
Getting your Trinity Audio player ready...
|
Despite the huge opportunities which exist in the Nigerian real estate market, especially in the on-going new cities and town development projects, foreign investment remains low because of the fresh hurdles posed by foreign exchange and visa constraints in the country.
The devaluation of the naira presents a good opportunity for foreign investors with stronger currency, but the volatility of the forex market and scarcity of dollars make investment difficult and challenging. The naira currently exchanges officially at N350 to a US dollar and about N490 to a dollar at the parallel market.
Added to this, getting Nigerian visa abroad has in recent times become a big challenge and is therefore constraining investors who wish to come to invest and do business in the country. “A number of businesses would like to come in now with their dollars and pounds but they will not do so because they cannot get their money out”, Ahmed Bashir, acting British Deputy High Commissioner in Nigeria told BusinessDay in an interview in Lagos.
Bashir, who was at the project site of Gracefield Phoenix—a luxury island development on the shoreline of the Lagos Lagoon, promoted by Gravitas Investment Limited— noted that “there are no dollars here and as global businesses, they cannot move their money around and that has a major impact”.
Maryanne Udo-Okonjo, CEO, Fine and Country (WA) International, confirmed that a good number of Diaspora Nigerians have interest in coming home to invest, especially now that they have exchange rate advantage, but are not keen on coming because of the forex constraints in the country.
Before now, investor’s major headache in Nigeria was ease of doing business, especially as it relates to registering property and getting building approvals. Nigeria lags behind countries like Ghana, Thailand and New Zealand in ease of registering property. According to Olusola Olubode, a finance expert, registering a property in the country takes an average of 12 procedures, lasts nearly four months and costs about 15 percent of the property value, as against in neighbouring Ghana, where it requires just five procedures, 34 days and 1.3 percent of the property value.
Another major challenge is land acquisition which Tayo Odunsi, CEO/Director at NorthCourt Limited, says lacks transparency, stressing that “lack of transparency is an investor’s nightmare, especially for institutional or international investors, who will not touch what they can’t understand or control”.
Nigeria has a good number of large scale on-going real estate developments, including the multi-billion dollar Centenary City in Abuja, Eko Atlantic City in Lagos, the Rainbow Town in Port Harcourt, Gracefield Phoenix and Orange Island—both new town developments in Lagos—which offer good opportunities for foreign investment.
The British envoy, who was also at the Eko Atlantic City, described it as the Manhattan of Africa, “but investment is slow coming into the project because of the situation in the country”.
Eko Atlantic City is a new city being developed on reclaimed land from the Atlantic Ocean, adjacent to Victoria Island. The city will become West Africa’s new financial hub, accommodating head offices of the sub-region’s leading banks, financial institutions and international corporate organisations.
Bashir hopes to see a number of companies coming here to set up businesses and also to make a difference, not only in Lagos but in the wider economy of Nigeria. “Nigeria has vast areas where people can invest in but there is a missing link and that link is in the area of infrastructure and ease of doing business which is a matter of policy. Businesses will try to invest in services in such areas as hospitals, schools, transport services and infrastructure”, he said.
He advised that Nigeria should come up with a campaign that would help market and sell the country to investors in other countries of the world. “Nigeria should evolve a national campaign to woo and encourage investors to come to the country. Nations, including UK, have campaigns with which they sell their potential and opportunities to investors in the outside world”, he said.
CHUKA UROKO
