UNLEASHING POTENTIAL
TBY talks to Babatunde Raji Fashola, Federal Minister of Power, Works, and Housing, on addressing the housing shortage, creating a housing economy, and staying on the up and up.
BIOGRAPHY
Prior to his appointment as Minister of Power, Works, and Housing in November 2015, Babatunde Raji Fashola served two terms as governor of Lagos State from 2007-2015. As a Senior Advocate of Nigeria, Nigeria’s highest legal distinction, he is also the recipient of the Stephen J Solarz Award of the International Crisis Group in 2015 for his commitment to improving social and economic conditions in Lagos, particularly for his role in the response to the Ebola outbreak. Fashola was the chairman of the Strategy Committee of the All Progressives Congress and served as chairman of the fundraising committee for the Buhari-Osinbajo campaign.What are the ministry's most recent policies to help tackle the 80 million housing shortfall in the country?
I see an opportunity to build a real housing economy. The policy is clear and undeniably global: to create affordable housing. That then morphs into various social housing concepts. All we are trying to do now is restart a national housing program that will unleash the housing economy here. Having a national program primarily entails knowing what people want in terms of housing. This defines the acceptability and affordability of housing here. The first leg of the housing economy is already underway; artisans are being employed and the solid minerals sector has grown positively for the first time after nine negative growth quarters. People are buying sand and other building materials, and there are quarrying activities happening. Around 13,000 people are directly engaged in construction and about 40,000 people are indirectly employed in the supply value chain. There are 653 indigenous Nigerian companies employing Nigerians. By the time we finish, the financial sub-sectors will also be involved in activities, such as mortgages to support acquisitions, as well as the merchandising sub-sectors, for example furnishing the houses. I am focusing on the opportunity to do something that works and survives partisan politics.
How will the government fund its housing projects given shrinking oil revenues?
If we look at what the government contributes to the GDP, it is barely 10%; the remainder comes from the private sector. Therefore, it is not appropriate to expect the government to bear the entire cost of funding houses. However, the government can initiate the policy and program, evolve the design, test the market, verify the principles, and support private capital. This is what we are doing. We are running our pilot schemes in every state, and if they succeed, then we will multiply them 10-fold. The government, whether state or federal, will not have all the money, but it can assist in certain ways because it has fiscal powers, policies, and the Federal Mortgage Bank of Nigeria (FMBN). Notably, the government can become the financier of acquisition. Once the private sector sees that workers can get loans to purchase houses, then we will have created an incentive for the private sector to build. We are strengthening FMBN to grant mortgage acquisition loans to workers, and this is an incentive for the private sector to replicate our house-building model many times more than we can. The money for this comes from the monthly contribution workers make to the National Housing Fund. In addition, we will soon announce a government guarantee for acquisitions through the FMBN. We have to improve access for people in the informal economy using the vehicles they use best, which follow the cooperative model. This model has worked in transport, farming, and refuse collection, now I want to test it in housing.
What is your outlook for the power and housing sectors, and for Nigeria in general for 2018?
2018 is clearly the year when we can expect to see some significant advances. We should see more results in terms of the effect of our programs in the power and construction sectors, as well as how these drive other sectors such as petroleum, bitumen, and diesel fuel for construction, along with all the industries that support construction and provide the inputs, like the steel industry and mining. This should be consistent with the real impact this government seeks to make in terms of investing in infrastructure to drive growth and development. 2018 will be a better year compared to 2017 in the same way 2017 was an improvement on 2016. This goes to show the trajectory of policies, the goverment gaining momentum, and change truly being imminent. In 2018, we will be measuring the results.
UNLEASHING POTENTIAL
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