By Danlami Nasir Isah
The real estate sector, being a critical sector in the economy, has been viewed by many stakeholders as lacking the capacity to contribute optimally to Nigeria’s Gross Domestic Product (GDP) due to lack of proper regulation of the sector. In different fora, stakeholders have called for a holistic law that will govern the activities and policies of the sector to ensure it is fully beneficial to the economy.
Subsequently, the Nigerian Senate recently passed a bill for the establishment of the Real Estate Regulatory Council of Nigeria. The move by the upper legislative chamber is to, among others, help curb the fraudulent practices in the real estate business and ensure that it conforms with the national building code in Nigeria.
The bill, which is tagged, ‘Real Estate Regulatory Council of Nigeria (Establishment) Bill, 2021, and sponsored by Senator Aliyu Wamakko, was passed following the consideration of a report by the Senate Committee on Establishment and Public Service during plenary session. The report was presented by Senator Nicholas Tofowomo on behalf of the Chairman of the Committee, Senator Ibrahim Shekarau.
The senator, on behalf of the committee, said that the establishment of the Real Estate Council of Nigeria is expected to provide efficient, effective and transparent administration of the business of real estate development in Nigeria. He added that the council will be responsible for prescribing minimum standards for the conduct of the business of real estate development across the country.
His words: “The Council when established, would among others, curb fraudulent practices to ensure that the real estate business conforms with the national building code in Nigeria.”
President Muhammadu Buhari had initially withheld his assent to the Bill seeking to establish the council, which was passed by the eighth National Assembly due to some certain observations raised by stakeholders at that time.
The senator said, “those observations have been taken care of in this report by the committee, following the engagement with stakeholders to ensure that real estate business in Nigeria conforms with the Money Laundering Act 2011 (as amended).” Recalled that the Bill that was just passed was read for the first time on April 28 and scaled through second reading on June 22.
If the Bill sees the light of the day, it is expected to address the challenges which have not been adequately regulated in Nigeria, thereby creating room for unscrupulous and corrupt developers to defraud home owners who pay without being given houses. It is also expected to address the problem of the low quality of houses being built by these developers and given to the owners. It is hoped that the passage of the Bill will help bring some form of sanity to the sector and check the fraudulent and unfair practices of these developers.
Meanwhile, stakeholders have expressed their expectations from the Bill, saying the National Assembly must harmonize real estate tax laws to enhance assessment, collection and utilization of revenue thereof. They believe it should address the uncoordinated real estate tax policies and non-enforcement of existing tax laws, which has been one of the issues militating against unlocking real estate’s potentials for economic development in Nigeria.
A real estate expert and president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Emmanuel Wike, emphasized that the time to unlock real estate’s potentials for economic development is now, considering the general economic downturn occasioned by the COVID-19 pandemic, the operation of a mono-economy, corruption, insecurity and other factors that adversely impact the economy.
According to him, “the Bill must show a clear strategy on how to mobilize funds for real estate development, saying this would enable quick recovery of the economy from the downturn occasioned by the COVID-19 pandemic and the Post-Covid-19 Pandemic era.”
“All hands should be on deck to intensify action for the implementation of government policies and framework for the diversification of the economy. In addition, there is need for orientation of all and sundry to curb corruption at all levels, particularly as it relates to the real estate sector,” the communique read.
Another real estate expert, Mr. Chibuzor Chijoke, said the challenges confronting the sector are numerous. They include insufficient real estate data, difficulties in land acquisition processes; inability to activate enormous dead capital inherent in real estate resources. Others are low level of real estate financing; the dearth of workmen with specialized technical skills in the sector, and non-continuity in public policy implementation.
He therefore called on government “to set the machinery in motion for the establishment of effective and up-to-date databank to be easily accessed for research and development of the sector. Besides, they urged the government to digitalize land registries in states and in local government areas in order to shorten land acquisition processes.
In his words, “the digitalization of land registries across the states, would invariably eradicate the bureaucratic processes evident inland acquisition.”
Mr. Chijoke also canvassed the need to expunge the Land Use Act from the Nigerian Constitution (1999) to enable ease of amendment and smooth operation, saying land titling is a sine-qua-non in releasing the potentials in real estate.
According to him, “there is an urgent need to title all lands in Nigeria, particularly in the rural areas, to make them bankable and increase their potentials for viability.”