Real Estate professionals have applauded the proposal for increased budgetary allocation aimed at reducing the housing deficit in the country next year.
However, they highlighted issues bearing on implementation of the budget, ineffective Public-Private Partnership (PPP), and continuity of policies as pitfalls the government must avoid.
From the proposed allocation, N259.2bn has been earmarked as capital expenditure for the Federal Ministry of Work and Housing, which is the highest allocation among ministries.
The 2020 N10.33 trn budget is expected to make a positive impact on the real estate industry and the lives of homeless Nigerians despite plans to spend a large chunk of the ministry’s fund on road projects.
A breakdown of the allocation to Works and Housing sector include N17.5bn for the Federal Government National Housing, N30bn for Social Housing Scheme (Family Homes fund) and N210bn for construction and Rehabilitation of Roads.
This projection was revealed in a two day’s real estate summit tagged “Exploring the present realities for the future”.
The realtors maintain that the budget was a step in the right direction, emphasizing that if it is implemented it will reduce the housing deficit in the country.
Meanwhile, a few of the stakeholders in their comment stating their fears reiterating that Nigerian has a history of poor implementation might be the case like the past.
The Director of Echostone Nigeria, Mr. Sammy Adigun while expressing his fears said, “The proposed 2020 budget is unexciting because of the history of budget implementation in Nigeria.”
He further revealed that the budget implementation for 2018 has been less than 40 percent.”
Adding that in his estimation, implementation of the proposed 2020 budget would be at best 60 percent because personnel cost, debt service and overheads would gulp most of the money.
They called on the government to solve issues around Public-Private Partnership and the lack of funds for projects, policy inconsistency because of the change in government, poor knowledge of PPP in the public sector and lack of patience of the government to allow private participants go through the learning curve.
Despite these challenges the real estate sector, which was the sixth-largest contributor to the economy in 2018 is expected to grow by a compounded annual growth rate of 13.65 percent between 2019 and 2020, according to PwC analysis.
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