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Forex scarcity stalling real estate sector

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By Timothy Akintola

Green building driving the demands for an eco-friendly environment.

Presently, Nigeria is experiencing the worst foreign exchange crisis in its history as a result of the ever-increasing demand for FX despite the low supply. The Central Bank of Nigeria put a halt to the bi-week sale of FX to Foreign Portfolio Investors, to resolve the outstanding backlog of contractual obligations for the supply of FX to FPIs via the banks which was not met. According to the CBN data, the country’s foreign reserve witnessed a 2.9 percent decline.

In an interview, Anand Kumar, the Head of Business of PPC Limited, spoke about how green buildings drive the demand for an Eco-friendly environment, as well as other challenges affecting Real Estate. On the implications of residential and commercial buildings accounting for about 40 percent of the global energy-related carbon emission, he noted that this could be analyzed in perspectives. He explained that the demand has been immensely driven by the huge migration. The occurrence of developments impacted in cities and the difficulty in finding amenities in small towns, people become attracted to these cities and hence, migrate. Kumar pointed out that this factor immensely impacts on housing.

Small towns must be developed to ease cities off migration increase.

Kumar further asserted that with the huge population and increasing Unemployment evident within these cities and as such, implored that basic amenities be installed, as well as welfare support to be granted to every residents within these cities. He also noted that these small towns must be developed to further ease the cities off a consistent surge in migration. He insisted that housing was a major challenge in Nigeria due to residential staking up the first part of most cities. On the climate impact, he stated that it was a bad sign due to the increase in carbon emission which would further cause Pollution. On the positive perspective, he explained that this would increase employment for the huge population influx.

On the capability of the real estate sector in underwriting imminent risks, Kumar pointed that it was the role of the federal and state government to enhance the sector, especially in scaling the mass housing scheme to a larger proportion. He said that the government could attend to some of the projects’ funding requirements, whilst collaborating with real estate stakeholders to minimize risks. He added that the government policy must give priority to investments for Manufacturing local building implements instead of importing. He then insisted that the government must further support the real estate industry to enable developments within the sector.

Currency fluctuations affecting the real estate industry.

The PPC Limited’s Head of Business again explained that the transformation of most urban communities into mega cities were an evident indication of the technological development. He noted that with Technology, Lagos State for instance can use the Recycling strategy to maximize its available water and energy in making these resources more effective. On how the present forex scarcity was impacting the real estate sector, Kumar explained that over 80 percent of their service requirements were being imported and as such, the currency fluctuation was impacting the sector.

He again explained the relevance of green building in salvaging the housing deficit that has ravaged Nigeria. The Green building was immensely important across the globe in ensuring the approval of buildings and constructed to the standards of green buildings, which are basically the minimal usage of water, Electricity and other billing services. Kumar pointed out that Nigeria presently had no requirement for basic building needs, power deficit and as such, must follow the recognized green standard.

Housing, one of Nigeria’s major challenges, must experience improvement.

When asked about affordable houses for low income earners, Kumar stated that housing, which was one of the country’s biggest challenge, must experience immense improvement. He noted that a majority of the population were not in good condition, as a result of the unavailability of accommodations. He however stated that the building cost must be simmered down. He also indicated that green building would help people in buying and leasing into the advanced building standards.


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