Nigeria’s focus on works, housing in proposed 2020 budget praised but concerns remain

Experts and professionals in the Real Estate sector have commended the proposal for a budgetary allocation to boost infrastructure and housing next year, but issues around implementation of the budget, ineffective PublicPrivate Partnership (PPP), and lack of continuity of policies are pitfalls they warn Nigeria against.

With N259.2 billion earmarked as capital expenditure for the Federal Ministry of Work and Housing, the highest allocation among ministries, the 2020 N10.33 trillion budget is expected to make a positive impact on the real estate industry despite plans to spend a large chunk of the ministry’s fund on road projects.

“Enhanced infrastructure improves connectivity and has a direct impact on real estate performance,” Bola Adigun, director of Deals Advisory, PWC Nigeria, said at The Summit 3.0, an annual Real Estate Business and Professional summit organised by the Nigerian Institution of Estate Surveyors and Valuers Lagos branch.

A breakdown of the allocation to Works and Housing sector include N17.5 billion for the Federal Government National Housing, N30 billion for Social Housing Scheme (Family Homes fund), and

N210 billion for construction and Rehabilitation of Roads.

Significant sums have also been set aside for railway projects including Lagos-kano, Port Harcourt-maiduguri, Calabar-lagos, Ajaokuta-itakpeAladja (Warri), Kano-kastinaJibiya-maradi.

While some of the experts at the two-day Real Estate summit, tagged “Exploring The Present Realities For The Future,” said the budget was a step in the right direction, others fear a history of lack of funding and poor implementation of the budget would repeat.

“The 2020 budget for housing and is dead on arrival,” said Adedotun Bamigbola, chairman NIESV Lagos, noting, “The minister of works and housing has called for a N10trn bond infrastructure bond which if we don’t take action by next year, we would be needing around a N15 trillion bond in the following year.”

Sammy Adigun, director, Echostones Nigeria, said the proposed 2020 budget was unexciting because of the history of budget implementation in Nigeria.

In his estimation, implementation of the proposed budget would be 60 percent at best, “because personnel cost, debt service and overheads would gulp most of the money.”