Fashola contends building low-cost houses for Nigerians not viable

• FG owes contractors N336bn as of July 2020- Minister

The Minister of Works and Housing, Mr Babatunde Fashola, has contended that building low-cost houses for Nigerians is no longer viable because the components that go into the construct

ion of houses are not cheap.

Fashola made this revelation while speaking in an interview on Arise Television monitored by our correspondent, stressing that what the federal government can do to make houses affordable is to create the right environment for the industry by working out right policies.

The minister pointed out that every decision taken in the sector now has to be driven by hard data with adherence to market segmentation, rather than the blanket manner it was done in the past.

The former Lagos State governor submitted that some houses built by the Shehu Shagari administration in the 80s in the north have been left unoccupied because no survey was carried out as to the taste of those who needed the houses.

He queried “If you want low cost housing, where’s low cost land, low cost cement, low cost doors and low cost labour to deliver low cost housing?

“We must be very careful. Are we a socialist state? If we are where government owns everything but can you build a house without land.

“You have never heard me say anything about low cost hosing because there’s no low cost land. What government can do is to make the houses affordable and dignified,” he emphasized.

Fashola described some data pushed out by some individuals and groups on the housing sector as outrageous, adding that Nigerians talk a lot about affordability without talking about acceptability.

He noted that because acceptability is also connected, If  one build a house that’s too small, even though he can afford it, he won’t like it.

The minister posited that “In the past, people did not occupy some of the houses because it was different from what they wanted. In the north, bungalows are the in-thing as opposed to blocks of flat. We had seen them reject houses that were built during the Shagari era.

“There’s one like that in Adamawa or Taraba and its still there across like that. So, if you want to give people something, you do a survey on what they want, you don’t prescribe.

“So, when all brands come to the market, they do surveys. We are now building what our survey showed us in 34 states. If we can sell them at affordable prices, then it will become the standard. Government can then help through its fiscal and monetary policies.

“Fiscal policies such as providing support for the Federal Mortgage Bank of Nigeria (FMBN) and monetary policy such as working with the Central Bank of Nigeria (CBN) on issues of interests and so on and in the realm of fiscal, how to build related industries e.g cement and doors manufacturing companies”.

He further disclosed that the FMBN had issued over 5,000 mortgages and also home refurbishment loans to over 40,000 persons in the last five years.

In a related development, the Minister of Works and Housing said the Federal Government owes contractors N336 billion as of July 2020.

He said only N27bn had been released by the Federal Ministry of Finance, while about N162bn was available through the Sukuk Bond.

The minister said, “Our debts as of the end of July, our outstanding and unpaid certificates for example, were in the area of N336bn. Now, the release we have from the Ministry of Finance for the second quarter is N27bn.

“Then we have the Sukuk (which is) N162bn. So, if you add that up, we are still way behind and more certificates are piling up for work that we haven’t paid.”

The former governor of Lagos State said some private individuals like Aliko Dangote had taken the advantage of the road infrastructure tax credit scheme which would see the private sector constructing roads in exchange for tax reliefs.

Fashola noted that some other projects such as the Second Niger Bridge were being handled by the Nigeria Sovereign Investment Authority, while 44 roads were being constructed with the N162bn Sukuk bond.

“When you divide N162bn by 44 roads, what is left? That defines where we are in terms of the funding challenge,” Fashola said.

The minister said the Federal Roads Maintenance Agency would repair about 192 roads in the next 12 months, while 37 bridges were undergoing maintenance.

Fashola said, “At this moment, for example, FERMA is going to undertake 192 road repairs and maintenance over the next 12 months.

“They just sent me the implementation plan on Friday last week and they are good to go.”

The minister called for the re-introduction of tolls on major roads, adding that the previous governments should have scrapped tolls.

He added, “I can’t sit here in judgement over the circumstances that led to the removal of the tollgates because I don’t have the full facts on why the government of the day took that decision.

“In Yoruba and other languages, they say beheading is not the cure of headache.”

Fashola said the government was looking at the option of entering into concessions with the private sector on major roads.

The minister said the concession would see to the construction of guest houses, filling stations and others along the highways.