Kuyebi: Entrepreneurs Need to Involve Professionals in Housing Projects to Avoid Collapse

Bennett Oghifo

Nigeria, sadly, is now being presented at conferences abroad as a sour example of where buildings collapse frequently in Africa. The President of the Council for the Regulation of Engineering in Nigeria (COREN), Sadiq Abubakar, said recently that 22 buildings collapsed between January and July this year with 33 deaths. Professionals in the nation’s building sector believe these figures are conservative, particularly because the COREN data was released before the Jos school building collapse that killed 22 people. Many more buildings have collapsed since then. How to end this incessant collapse of buildings? Professionals say there is no shortage of recommendations but that the government should muster the political will to implement them for a safer built environment. 

Preventing a building from collapsing during and after construction is no rocket science. A team of experts should be in place to tick all the boxes, as is being done at the Eko Atlantic City, according to Ayoolanrewaju Kuyebi, the Group Managing Director of GMH Luxury, a leading real estate developer, renowned for its focus on innovation and excellence.

Kuyebi, whose company is developing the Demaris Resort, on an island between the lagoon and the Atlantic Ocean, said there are immediate to long term solutions to the needless deaths and destruction. “In a short term. What the government should do is to look at estates that have been so successful, as far as development is concerned, and I will say that Eko Atlantic City has been so successful because of the participation of core professionals from the design process to the approval process. 

“The approval process for Eko Atlantic City is totally away from the government sector, the Lagos State Building Control Agency, Lagos State Physical Planning Authority are not part of the team for Eko Atlantic. Eko Atlantic has their own team of experts, as far as control is concerned, and your designs are going to pass through this team of seasoned experts.”

This team of experts has more Nigerians, he said. “Funny enough, the majority of them are locally sourced. So when you look at the quality of development, compared to the rest of the locations we have in Nigeria, there’s a big difference. It is very different. And it is as a result of the participation of core professionals in the process of design and execution.

“So, if the government agencies can understudy or make Eko Atlantic a case study, what you will discover is the fact that the issue of collapse within the built sector will be a thing of the past. It will practically go away.” 

He said a curious thing going on in the highly unregulated real estate sector is that people with access to funds now become housing developers overnight and then invite quacks to build for them, instead of assembling a team of professionals to do a thorough job for them. “The custom now is that I have money in my hand so I can be a developer. But the fact remains that money is not the sole component as far as development is concerned. Yes, money is the lifeblood of every development. That is why we have professionals handling the work, as far as real estate is concerned. 

“So, we will notice in recent times that we’re not having much collapse in Abuja compared to what we have in Lagos because there is a surge in market demand. So, every Tom, Dick and Harry is jumping into housing development because that is what is in demand. They are driven by demand without the participation of the core professionals.

“Definitely, we’re going to be having a lot of collapses. The process is as important as the end project at the end of the day. The participation of core professionals in real estate development is a must if we’re going to stop incessant collapse, as far as the real estate market is concerned.

What do I mean by core professionals? 
We have the Town Planners, the Architects, the Structural and Civil Engineers, the Builders, Surveyors, Quantity Surveyors, the Mechanical, Electrical and Plumbing engineers. All of these put together form the team of experts.
“Recently, I entered a place and the whole place was smelling. The reason was the fact that the vent had collapsed. The service engineer is incharge of that. It was a 5-Star restaurant that didn’t have to experience such. That is what you get when Professionals are not handling your design. That is just one leg of the issue.

There is also a dearth of artisans, he said, “Another major issue we are facing is the acute shortage of semi-skilled workers. To get them is hard work because nobody wants to learn a trade.

“Gone are those days when you go to a carpenter’s workshop and you see many young people trying to learn carpentry. The same goes for the iron bending, the welding works, and masons. Before you get good ones, you have to look beyond the shores of this country. You have to go to places like Togo, but unfortunately, their currency is higher than Nigeria’s. So, we are recycling workers at that level. We have to go to Togo, we have to go to the Republic of Benin to get a good Mason and we pay more because our currency is weaker. It’s so serious that to get a good job done, you have to be looking in the direction of a Lebanese man handling building work. So, the majority of this work that is supposed to be domesticated to empower our economy, is greatly being exported and it’s a shame.”

Young Nigerians need to be trained on technical skills

“Technical school values are faded, polytechnic values are gone, because everybody wants to go to the university. To do what? So the government needs to do something, as far as this skill model is concerned. We have a younger generation that are doing what? The bulk of our population are young people. What are they doing? We have a very young unproductive generation. And if the government can incentivice this sector, it has the ability to bring young people out of poverty.
“What do I mean by that? It is by training, through training and empowerment. When you train as a carpenter, you will be given seed funding to start. You have a workshop you can go to. A shared workshop where you can go to produce whatever you’ve been contracted to produce. A workshop that is for the government. You pay a quarter to the government for the maintenance of the workshop. If you have a welding work to do; like you want to produce a burglary proof, tanks or you want to produce metal doors, a factory will be the best for that.

So you’re recommending that the government should have a factor? A production hub.

Everybody will have their own work station. Gone are those days when you can go to a government establishment to hire equipment for your use. We don’t have that anymore.

Gone are those days when you go to a specific location to get skilled labour. In fact, that organisation has gone into oblivion.
“So, these semi skilled, or the artisans as we call them in the real estate setting, are highly unregulated. They don’t have any corporative body whatsoever that certifies their usefulness. That certifies that this person has gone through the process of learning this work and that this person can actually practice this work. Like that trade certificate that they are giving to confirm that this person has graduated as a plumber, as a carpenter, as an iron bender, or as a bricklayer. We don’t have that anymore. Everybody just carries their bags and goes to work.

What about a scale of fees to encourage these semi-skilled workers?

For that to take effect, you need to have a body before you can begin to talk about the scale of fees. When you have a regulatory body that is in charge of fees, you can begin to talk about the scale of fees.

Nigeria’s Real Estate Market has multi-dimensional problem

So Nigeria’s real estate market is suffering from a multi dimensional problem; from inflation to acute shortage of semi skilled labour to inadequate funding, to lack of suitable finance for the sector.

Can we solve these problems? What solution would you profer to solve these problems?

One thing is to solve the acute shortage of semi-skilled labour. It’s for the government to incentify technical schools. It’s for the government to revamp technical schools and a coalition of trading hubs where carpenters, bricklayers, iron benders, tilers can go and they are sure of getting a job. Because that is where people go to draw from the pool of workers that have been listed through that hub. And with that, we can begin to have good data about the activities of these artisans. It is, actually at the moment, an untapped gold mine in terms of revenue, even for the government, because these people also contribute to the economy of this country. With this hub, we are sure to know, at least to a reasonable extent, the volume of work that is being undertaken by a set of semi-skilled workers.

And you recommend it for the six geopolitical zones?

Yes, it is highly recommended for the six geopolitical zones. At least, we should have it in every state. Even in every town. Whereby people can go there to learn a trade. And when you go there to learn trade, it is incentified by job guarantee, by empowerment micro credits. Having access to micro credits is important so that when you finish as an apprentice, you will have a micro credit that you can use to purchase the first set of equipment you will need to function as a semi skilled worker. And when you’re contracted to do a particular job, there is a place you can go to for the job to quickly be done and the government is also paid during the entire ecosystem. The government will be paid from the little you get. Yes, because it is a quota for you to work at the hub. There is a contribution you must pay no matter how small.
So before you know it, all these hubs become self sustained later on.

It should be PPP model

To make this work, it has to be a Public Private Partnership (PPP) because of the continuous management and sustenance of the hub.  Because of maintenance and continuous upgrade of the hubs. And this will drive youths to want to learn one trade or the other to become useful to the entire ecosystem of the economy.

He also discussed the stress housing developers go through to take loans for projects.

“Is finance suitable for real estate? The answer is no. You go to the bank, you take a million from the bank for a development project. The maximum period you’re going to get is six months on the principal, not on the interest. The interest factor, you will have to start paying immediately.

“These kinds of finance are not suitable for real estate let alone what is even the average interest element for funding of real estate. The minimum you get is above 20%. That is why the cost of real estate is for the rich and middle class, because of the rate of inflation, devaluation and high lending rate, the cost of average housing is not affordable, as far as Nigeria is concerned. And it is the funding model that is the contributing factor to this. So, the government needs to play an active role as far as this is concerned. They need to find a way to subsidise facilities for the real estate sector.

“And that is when we can now begin to have what we call affordable housing. What Singapore was able to do and what the United Kingdom is about to do at the moment, to cut their housing deficit of about four million. The active participation of the private sector in real estate in solving the housing deficit is actually very crucial. And government participation is needed the most to solve this problem.

So, by subsidizing the real estate housing falls through different channels. There are family home forms, there is Federal Mortgage Bank of Nigeria, there is Nigeria Mortgage Refinance Company (NMRC), there is Development Bank of Nigeria, all of them are not enough. They cost a lot. The volume of finances needed to bridge our housing deficit makes it impossible to do so even in 100 years to come if something tangible is not done concerning all of this.

“What we’re asking for is synergy, subsidy and refocus on residential development. It is actually a major deficit as of these times. 

Yes, that’s for funding. Do we have a land bank to do this in all the states?

Of course, we have not developed up to 20% of our land banks. So, that means we have over 80% of our lands suitable for residential purposes. They are undeveloped or underdeveloped. So it is not a question of inadequate land banks, it is a question of access to the land as a result of multilayers of encumbrances by the government or by the individuals.

“In Lagos today, if you say you get a government allocation, you’re going to do a double purchase. You’re going to be buying land from the government, as well as the so called individuals. If not, you’re going to have a land on paper but you will not be able to take over that land. End of story. So why will the government give me land that I’m unable to possess? That’s for the developer now.

You still have to pay the people that own the land. Government can give you legal possession but not physical possession.

“As I always say, infrastructure ought to precede development, but in real terms, it is the development that precedes infrastructure.

“That is why when the government comes at the end of the day, they start demolishing people’s buildings and sweat, claiming there is a road or something else in the area. So the issue of infrastructure has to be dealt with before proceeding with development. We should be intentional with everything we want to do.”