‘Land Use Act should be abrogated for benefit of citizens’
Emmanuel Okas Wike is the President, Nigerian Institution of Estate Surveyors and Valuers. He spoke to ANN GODWIN in Port Harcourt on how the Land Use Act has undermined professional practice, measures that could transform the real estate sector, and the role of estate surveyors in developing the economy.
The economy is facing its worst crisis following the fall in oil price due to the corona virus pandemic. Do you think the real estate will bounce back to its full potential this year?
First, we must appreciate the fact that what we are observing is a pandemic, meaning that, it is not only affecting Nigeria. We have experienced very low business in real estate before the pandemic; the economy was also not doing well after we experienced recession in 2016 to 2017. We were almost coming out from it before the corona virus started in April this year. It affected us negatively from the lock-down to the protocols initiated by the Nigerian Centre for Disease Control (NCDC).
Let’s start with the construction industry; there are so many projects that have been going on before now, but because of the pandemic, they have been suspended. Secondly, most of the materials that we’re using in the industry are imported; so, we have to wait for them to arrive and, as you know, all the countries we import from were affected by this COVID-19.
We are already in the second quarter of 2020 and what that means is that we only have the last quarter, which is September to December. Frankly, I do not think that real estate will bounce back this year, but in the second quarter of 2021. Presently, there are a lot of programmes and policies that government is promoting to cushion the effect, in terms of palliatives and incentives. Some of all these policies will not be felt in the economy until the second quarter of 2022.
We must recognize that real estate is capital intensive; it also has a lot of avenue for employment opportunities. And for that to happen, we really need to have the economy working. The real estate sector is a micro of the macro sector; it’s just a part of the general economy and because it has been affected badly, it means that it will take some time for us to get back to our feet. We are not as worst hit as the entertainment and hospitality industries. The real estate industry is fairing better; the only thing we can complain about is that most of these construction projects have been delayed, because of their re-evaluation.
Do you think that current policies targeted at the real estate sector have been successful or failed to transform the industry? What policy can revive the sector?
Well, there have been so many policies by the government, both at the Federal and at the state levels. The most recent is the Economic Sustainability Committee headed by the Vice President, Yemi Osibanjo and also the ‘Turning The COVID-19 Tragedy into an Opportunity for a New Nigeria’ that the Governor of Central Bank of Nigeria (CBN) is implementing, where he said that the government wants to develop about 300,000 houses per annum.
What we are saying is that, for government to implement all these policies, they also need the contribution of the private sector, because without them, some of these policies would not be achieved. We have heard about Housing Policy before where government said that by 2020 there will be free houses for all and we are already in 2020. Why didn’t we achieve it? It is because government wants to take over everything about housing. We must also see housing as an investment aspect of the economy, not only as a social amenity that government is supposed to provide.
For us, what the government should do is to provide an enabling environment, where the private sector should be able to invest their resources in real estate and build up a policy and government can also benefit from that policy. The government should incorporate the private sector in whatever thing they are doing because they cannot carry it alone. We need the infrastructure, and facilities that will make all these houses to be habitable. In as much as they have made this proposal to produce 300,000 houses per annum in each state, they should allow the private sector to pilot those polices and ensure enabling environment for investors. The private sector has the capacity and knowledge to implement them. If government goes into housing, what happens to agriculture, tourism, oil and gas sectors? What they should do is to classify the economy and allow the private sector to run each aspect or sector. The public private partnership policy is what will help us move forward and revive the economy faster.
There have been debates on the abrogation of the Land Use Act. How has this affected the real estate sector?
My institution happens to be the first that proposed the abrogation of the Land Use Act from the constitution, and even the Presidential Technical Committee on Land Reform has also said that the Act should be taken away from the constitution so that it could be amended.
In the last constitutional conference, our then President, Mr. Emeka Eleh made a proposal that the Act should be abrogated and also be amended for the benefits of the citizens of the country. But unfortunately, he was a lone voice in that committee and up till now, we still have it in the constitution.
We have also made our presentation to the senate president, informing him that it is necessary for the National Assembly to take a look again at the Land Use Act for us to have it amended, because there are so many gap in that Act. It has been unfavourable to us as professionals because access to title and land have been very cumbersome. The best title document is the one you get under the Land Use act, which is the Certificate of Occupancy. The Act has invested all land within an area on trust in the state governor. What that means is that it is the state governors that are managing the land on behalf of every citizen of this country. Unfortunately, some of these things have not been easy for us. If you apply for a C of O and in the next six months to one year, you will still be waiting for it. There has also been a lot of political undertone in some of these land allocations in states. We think it is proper to remove the Act from the constitution.
The Act is really affecting everyone. For instance, Section 28 of the Act gives the governor the power to revoke land for public purposes, while Section 29 talks about compensation. On the issue of compensation, they did not make provisions for the payment for land. What the law says is that you have to be refunded the rent you paid on that particular year.
Meanwhile, there are people who have invested in the property; they may have bought these lands, either from the original landowners or from the government, and they have paid money to government when they bought it. Now, when you want to acquire it for public purposes, you no longer pay the value of the land; you only pay for the rent of the land. I think that is not fair.
Again, the Act stipulates that you have to use the depreciated replacement cost of the structure. Now, you find out that most people are complaining after valuation that the compensation paid to them might not be enough to get a land in the places they were before the acquisition. These are some of the positions we have found ourselves as estate surveyors and valuers. That’s why we think. It is important we amend the Act for the benefit of the citizens. Now, when you compare that with what some of our colleagues who have the opportunity to do acquisition and compensation for some international donors like World Bank projects, you find out that you cannot use that type of valuation to do the job. So by global practice, we found out that we are not doing the correct thing. If you take the same acquisition you do for the Nigerian government and do same for the World Bank, the bank will not accept it.
What role has the estate surveyor and valuer played in the
development of the economy, considering that some areas are emerging as
Estate surveyors and valuers are professionals that render services to clients, including governments. In some of our conferences, we have advised government that there should be an urban regeneration, especially in areas that have been turned to slums. Some of these areas are no longer habitable and what government should do is to acquire such places, redesign and develop them, and then allow the occupants to go back and inhabit them.
Secondly, as consultants we have spoken to some of our clients who are into real estate. We believe these things can be done by the private sector, where a property developer, instead of going into a virgin land, can also come into an area and purchase it with the consent of the individual as part of his corporate social responsibility to the people. At the end of the day, most of these slum areas would be reduced. We have also spoken to some property owners, especially those that have vast land, that there is no need for them to sell those lands without planning, and they need to put in infrastructure so that they can avoid slums in future. We have given those advice to our clients and also to government.
With the corona virus pandemic, the institution may face stiff competition from quacks. Do you think the move to sanitize estate agency practice through your associate has lived up to expectation?
Yes. We know that agency practice is as old as the institution, but what we have done recently is to create the Association of Estate Agents in Nigeria (AEAN), and they’re under our control and regulation. What that has done for us is to reduce the number of people who practice estate agency within our domain without having proper education and proper training. So, it has reduced, though we have not gotten to the place we ought to be. We are still working to sanitize the estate agency practice. Under my administration, I would propose legislation in the National Assembly for the regulation of estate agency, so that it will not be an all- comers’ affair. Once that is done, the control of agency practice would be achieved.
The mantle of leadership is being handed over to you at an
auspicious and unusual time. What strategies will you adopt towards
transforming the institution?
Candidly, it is a challenging time, but it is also through a challenging period that we know those who are champions. We are not intimidated by the present challenges because we believe that this is just for a moment; nothing lasts forever. One of our agenda is to ensure membership growth and retention. We will also embark on career counseling in secondary schools and tertiary institutions such that those who want to study estate management or estate surveying will actually know the prospects, rudiments, ethics of the profession, and provide training for graduate members and professionals. Secondly, we also want to undertake capacity building, to train our members with the new innovations such that whatever assignment or job they are carrying out they will do it to meet global standard. We also want to go into advocacy by letting people know the job of an estate surveyor.
And for me, it is a great honour that God has lifted me to this
position. This is the first time a Rivers State man will get to the
position of the president of the institution. It is an opportunity for
me to serve diligently with commitment to ensure that whatever thing I
am going to do will bring honour and benefits to my state as well as the
entire nation. We have over 15,000 members, including professionals,
students and non-professional members. They all expect that during this
period, we must make a difference and that’s what we intend to achieve.