Through Ayo Alonge, [email protected]
For Prominent entrepreneur and Chairman of MI Okoro and Associates, Meckson Okoro, the real estate sector has enormous potential.
According to him, the prospects of the business also come with its challenges which however can be mitigated both by the government at all levels and by the players in the sub-sector, with a view to growing the startups and attracting investors. In this interview, he enlightens us further.
If you look at property management in Nigeria, MI Okoro is a very high figure when you drop the name. To a very large extent, I consider myself and am firm to have contributed immensely to the growth of real estate in Nigeria. They are budding entrepreneurs who wish to invest in real estate or who are already investors. We teach people how to invest in real estate that can generate mouth-watering returns in no time. Look at the Lekki mall. It is readily available for investors, businessmen and aspiring entrepreneurs. Fortunately, our company is in charge of this property. As an entrepreneur and investor, the company’s goal is to be the number one real estate company in the country. We are already on this path and we continue to push every day. When starting this business, I had in mind to contribute to the growth of the Nigerian economy through real estate consultancy and the provision of quality services. This orientation has not changed just because the economic policies of successive governments have militated against the realization of such dreams.
There is no standard measurement for a plot of land in Nigeria. Some may even tell you that if you can’t build on an acre, forget it. I can tell you with authority that there is no such thing as an official measurement for a plot of land in Nigeria. This varies from state to state and neighborhood to neighborhood, but it is not a standard measurement across the country.
The major challenge remains that Nigerians are poor. There is no disposable income. People don’t have money to buy property and government policies don’t help. There is also the challenge of home ownership policies in Nigeria. There is no possibility of an ordinary man owning a property in Nigeria, which affects the growth of the profession and the delivery of houses in Nigeria. I can call it political and financial challenges. Our job is also to advise the government to build for the poor. Construction for the poor is supposed to be supported by a deliberate policy called social housing infrastructure through a social housing fund which is strictly managed by the government. No one, including you, would make a real estate investment without borrowing from the bank. The bank will want to see your cash before giving you such large funds. Instead of the government focusing on building for the poor at a subsidized rate and empowering local governments to do so, they are neglecting this. If it is a functioning local government system, the local government is expected to even do the construction of houses for the people. If the government had created special funding for the social housing system, that would have been good. But today, the government is building to compete with private developers like us. This is not about assigning blame to the government, it is the full responsibility of the government. The government must bear more than 120% of the burden of affordable housing. Even when this is done, those working in these parastatals take the houses away and later sell them for high prices, not giving to those for whom they were intended. That’s our experience with it. Again, when it comes to challenges, how it affects everyone is how it affects me. I am only one among the subset. For example, if all the money we earn is used to buy diesel to power the business, it affects me. We cannot examine this separately. Another challenge is also the struggle to grasp with government policies that aim to kill businesses in Nigeria. If I tell you how much my company pays for diesel, that’s enough to pay staff salaries. This is a big leak coupled with the fact that the land use law created by the Obasanjo administration when he was the military head of state is also a big impediment to our breakthrough in housing in this country.
The problem is that each trading operator has their own strategy to survive in the market. Despite the difficulty and the competitiveness of the company, we are always at the top, when we are measured alongside the major real estate appraisers. We have fully understood our selling point which is to ensure that we provide efficient quality service to our customers and once the customer is satisfied we do more business with them. This is how you can succeed in the business. For us, we are repositioning our business to take advantage of emerging opportunities.
Mortgage system in Nigeria
For a very long time till now apart from what Babangida gave from 1992 to 1994 when he established primary mortgage institutions and everything fell apart due to mismanagement and lack of regulation appropriate industry, nothing happened in the mortgage business. At present, nothing seems to be happening in the mortgage sub-sector. The Ministry of Finance has not seen fit to know that since the existence of Nigeria, since independence, we are supposed to operate on an efficient mortgage system that can guarantee efficient delivery of houses.
Building houses involves a lot of capital. But then, despite all the challenges, real estate can generate huge returns for any investor who knows their onions. There needs to be enabling legislation to fine-tune the mortgage system. There must be a serious legal framework and the government must deliberately create primary mortgage institutions and feed them, just as we feed commercial banks. We do not create mortgage institutions like those created by Babangida. Yes, the idea was good, but there was no effective process to ensure they were doing the right thing. Everything collapsed in two years because there was no adequate legal framework for it.
What the CBN is doing for commercial banks is what the Federal Mortgage Bank should be doing for major mortgage banks. Since the establishment of the Federal Mortgage Bank, what can they say they have been able to accomplish. As far as I’m concerned, it’s a drainpipe. It’s either that they are overhauled or they should be shut down completely because they serve the private interest and not the national interest.
low cost housing
The government is not interested in housing the masses. That’s something you need to know and that’s why they haven’t done anything to create social housing. Jakande was passionate during his time to get houses for the masses and he succeeded. The private sector will never enter into the development of houses for the poor or the masses because it is not motivated by profit. Maybe in time, when we have passionate governments, we will know. The momentum will be there and I think everything will be fine.