KEYNOTE ADDRESS DELIVERED BY H.E BABATUNDE RAJI FASHOLA, SAN AT THE 10TH MEETING OF THE NATIONAL COUNCIL OF LANDS, HOUSING AND URBAN DEVELOPMENT AT D’PODIUM INTERNATIONAL EVENT CENTRE, IKEJA LAGOS ON 21ST OCTOBER 2021
Ladies and gentlemen, let me start by thanking the Government, the Governor and people of Lagos, my home state, for accepting to host this 10th meeting of our National Council and for the top-class facilities they have placed at the disposal of the Council for this purpose.
My appreciation also goes to all the technical staff and resource persons who have worked since Monday the 18th to bring us to this climactic last day.
The unsung and unseen contributors who have worked behind the scenes, whose work is visible but whose faces are rarely seen I thank you for lending your hands to nation building.
To the Government and people of Lagos, I bring the goodwill and best wishes of the Federal Government and President Muhammadu Buhari for outstanding progress and success in your developmental goals and objectives and assure you of the Federal Government’s support.
At this year’s meeting we have decided to focus on how to create more jobs, foster social inclusion and accelerate economic development and this much is obvious in the theme of this meeting which is “Housing development as a catalyst for job creation, social inclusion and economic development.”
This decision is informed by many reasons including the unquestionable need to expand opportunities for Nigerian citizens by collective action of Government and private sector actions.
The decision is also informed by the commitment made by President Muhammadu Buhari on June 12, 2019 on behalf of Nigeria, to attempt to lift 100 million people out of poverty in a decade.
The decision is further informed by the reality that this commitment is a national and not a Federal Government commitment, because the Federal Government alone cannot achieve this objective without the state and local governments.
ALL OF GOVERNMENT ACTION
One reason why this will require an All of Government Action is the fact that land is a critical component of capital formation and it is controlled by the states (not the Federal Government) and I am persuaded that appropriate, targeted and purposeful use of land, such as for the development of housing by the states and private sector, will unleash prosperity in all states that aggregates to national prosperity.
As you know, the Federal Government is undertaking a National Housing Program in all states (except Lagos and Rivers which has not started) aggregating to about 5,000 housing units, and trying to complete an inherited ministerial pilot housing scheme across the states which has a little over 6,000 units.
The Federal Housing Authority and Federal Mortgage Bank are also intervening as federal agencies in respective housing development directly, through cooperative societies and the provision of development loans and mortgage loans.
But all these account for only a small amount of the need across the nation for many reasons not excluding the limited amount of land available to these federal agencies.
These are some of the reasons why I seek to persuade all of you to go back to your states to persuade your Governors to re-commit to housing development.
I said recommit, because I am aware that many states are doing something, but you will agree that there is a scope to improve and scale up.
Lagos, since the days of the LEDB, LSDPC, Lateef Jakande has been and today in the time of Babajide Sanwo-Olu, remains an example of what state governments can do to deepen housing supply and reap the benefits that come with it.
Permit me to reflect on the benefits of some of them.
HOUSING, ECONOMIC DEVELOPMENTS AND JOBS
The first is that most of the land held by the states that is not developed either for farming, manufacturing housing or other use, is idle, less valuable, and therefore dead capital that earns little if any income and generates little if any economic activity.
But from the day a decision is made to build, activity is created, people are galvanized, manpower is required, jobs are created and an economic exchange that leads to productivity starts.
Bulldozers employed in clearing are hitherto idle plant and equipment that get put to use, they require diesel to operate, which has to be bought and supplied, transporters are involved to deliver them just as operators are employed to operate the bulldozers.
But before all this happens, some people have been employed in design, layout planning, soil test and other pre-construction activities.
When construction actively starts, the economic explosion happens, supplies of sand, cement, reinforcements, roofing, plumbing, painting, and other components get to work.
This drives a critical business in all our states, the micro small and medium enterprises who make or supply these building components.
The delivery of building materials engages transporters, drivers and lubricant suppliers, but this is only part of the story.
The final leg is the inclusion of the urban poor, the people who depend on daily or weekly wages, the skilled and unskilled workers, bricklayers, carpenters, welders, painters, plumbers, electricians and others who work the materials into the construction of a house.
Of course, there is indirect employment in vendors who supply food, water and sustenance to the workers daily for months.
This is personal income, that is taxable by the states and Lagos State has shown the example of what is possible not only with personal income tax as a source of prolific internally generated revenue, but also the impact of property tax with the Lagos land-use charge as an example.
If we can imagine the picture I am painting we can only see a picture of gainful employment, inclusiveness and income that heralds prosperity as the opposite of poverty.
But the story is not finished. It also leads to furnishing; carpets, beds mattresses, curtains, and other household equipment usually purchased when people move to new homes.
However, let me be clear, not every government can afford to build houses on scale and not all residents want government built homes. So some of the things that the government can also do is to provide infrastructure, roads, connection to electricity and water in site and service schemes, allocated to citizens to build according to their budget but in conformity with the planning order.
CAPITAL APPRECIATION AND PROPERTY TAXES
Apart from some of the benefits that come with building which I have highlighted above, the investment in infrastructure alone adds 30 to 40% to the value of the land which was hitherto of little or no value. Estate surveyors will confirm this to you.
Land that appreciates in value, yields more revenue when property taxes are computed without necessarily raising the rate of taxation.
Every time I visit a housing site that is under construction, I pay particular attention to the people working on site.
They are often happy; they have dignity; they are proud to work instead of beg.
They can go home to their families and put food on the table for their children.
More importantly, they feel included.
But the matter does not end there.
PLANNING/CONSTRUCTION PERMITS AND URBAN PLANNING
I have had the privilege of sitting as a member of the committee set up by President Buhari to facilitate the ease of doing business across Nigeria; a national rather than a federal government business.
One of the parameters where we need to improve upon, and which has hampered our rating as a country, is the number of days and the length of time it takes to get a construction permit or planning approval; and the cost of it.
We in government must consciously improve on the bureaucracy around granting of construction permits or planning approval by taking steps to reduce the number of people involved, introducing some level of automation, such as online submission of applications and reducing the cost of approval.
We must see revenue in a more broader sense, such as reduced income for planning approval, and increased income from consequential construction like income tax of employees on site, and a broader land use charge from more houses built.
Please permit me to make one final point about planning before I leave it.
All over the developed world it is easy to observe sports and tourist facilities connected by interstate highways and interstate rail.
It is not accidental that thousands of people go by train or buses to a sports or entertainment event and return by it. It is the result of planning.
I urge you to take the opportunity as the Federal Government continues to connect the interstate roads and build the national rail network to challenge your land managers and Town Planners to take large tracts of land, plan them for residential and business purposes and set aside land for sports, recreation and entertainment.
You will be investing in the future of prosperity of your states and your indigenes if you do so now.
LAND TITLE AND DOCUMENTATION
It is impossible to address such a gathering of policymakers without touching on title documentations of land.
An untitled land, in the words of Hernando De Soto is “dead capital.”
It is a cause of exclusion, because the land is not formatted into a recognizable way that enables a financial institution identify the owner.
Therefore, untitled land cannot attract credit like a mortgage or development finance because it is not in transferable form to constitute security or collateral.
All states who seek prosperity and inclusion for the people must commit to expeditious processing, GIS mapping and titling of their land.
Lagos state will tell you how much IGR comes from land transactions, but you must find out how much has been invested in GIS mapping, scanning of millions of pages of Land title documents and automation of the issuance of certificates of occupancy.
RENT
My dear colleagues, there is no debate that the world is a place of inequality; among nations and amongst people.
While we cannot make the world equal, we can commit to reducing inequality.
We may not be able to make all people homeowners, but we can reduce the number of those who lack shelter or live on the edge every so often when rent is falling due.
I am sure that our country will be a much better place when three years rent in advance, two years rent in advance or one year rent in advance for middle class and working family residential homes becomes monthly rent, payable at the end of the month.
Why we may not get there immediately, this is an area of immense exclusion that we can remedy by legislative action at state level.
This is a matter in which the Federal Government has no legislative competence. It is a matter for the states, and I urge you not to turn your backs.
Three years rent in advance of monthly salary paid in arrears lies at the heart of affordability of access to shelter.
All state legislators must see this as an important area of representation of their people to make life easier.
So must Governors and Commissioners through Executive bills.
I will close by asking these questions.
If not us, then who?
If not now, then when?
Thank you for listening.
Babatunde Raji Fashola, SAN
Honourable Minister of Works and Housing
Thursday 21st October 2021