Jibrin, Abbas Push Stronger Regulation to Transform Nigeria’s Real Estate Sector

• As minister assures of more government efforts to tackle sectoral challenges Chairman of the House of Representatives Committee on Housing and Habitat, Hon. Abdulmumini Jibrin, has advocated stronger legislation and a comprehensive regulatory framework to tackle the numerous challenges hindering the growth of Nigeria’s housing and real estate sector. Jibrin said the introduction of an effective regulatory structure would help maximise the vast opportunities in the housing industry, enhance transparency and accountability, encourage investments, safeguard homebuyers and ultimately expand access to affordable housing for Nigerians. He made the call on Monday in Abuja at the Stakeholder Conference on the Proposed National Real Estate Regulatory Authority (NRERA), which was held under the theme, “One Vision, One Ecosystem, One National Housing and Real Estate Plan.” The lawmaker disclosed that since assuming leadership of the House Committee on Housing and Habitat, he had conducted a comprehensive review of the sector to identify its challenges, explore available opportunities and assess its potential contributions to Nigeria’s economic growth. He explained the assessment showed the country is yet to take advantage of even a small portion of the opportunities in the housing industry, largely because of regulatory deficiencies, overlapping mandates among government institutions, weak consumer protection mechanisms and the absence of a unified national framework. According to him, although the Minister of Housing and Urban Development is saddled with the responsibility of implementing government policies in the sector, several agencies and institutions whose activities are connected to housing operate outside the ministry’s direct control, resulting in institutional gaps and duplication of responsibilities. “There are enormous challenges. We have a wonderful Minister of Housing. But as the Minister of Housing of the Federal Republic of Nigeria, he does not have jurisdiction over all the agencies and institutions that have to do with housing. There is a link; there is a gap. So, there is duplication of functions,” he said. Jibrin maintained the problems confronting the real estate industry were not limited to the conduct of property developers, pointing out that although unethical activities by some developers remained a major concern, prospective homebuyers also required adequate protection, relevant information and financial knowledge before committing themselves to property transactions. He noted that some individuals enter into housing arrangements without properly considering their financial capacity, while others fail to understand prevailing economic conditions, changes in government policies and inflationary pressures that could affect developers’ ability to complete projects based on their initial agreements. The Committee Chairman stressed that a well-regulated housing industry must clearly define the obligations of developers and consumers, establish efficient dispute resolution mechanisms and ensure that all participants comply with clearly established operational standards. He described the housing industry as a significant contributor to Nigeria’s Gross Domestic Product (GDP), adding that its contribution to the national economy could increase considerably if the opportunities within the sector were properly explored and utilised. Jibrin further observed that unlike other critical sectors of the economy, such as oil and gas, electricity and telecommunications, the real estate industry had continued to operate with considerable regulatory loopholes, making it possible for individuals to engage in property development without sufficient scrutiny, supervision or accountability. He explained that unscrupulous individuals could easily circulate property brochures to unsuspecting Nigerians and collect payments without any effective institutional mechanism to authenticate their credentials, assess their business operations or establish their capacity to execute the proposed projects. According to him, the proposed legislation is intended to bridge this regulatory gap by creating a national framework that would reinforce existing institutions without interfering with their legally assigned responsibilities. He also dismissed concerns that the proposed National Real Estate Regulatory Authority would undermine the constitutional powers of state governments or assume the statutory duties of established professional associations and regulatory bodies. “The bill to create the National Housing Regulatory Authority is not going to take over the powers of any state government. We are not going to compete. We are only going to cooperate. And for professional bodies, nobody is taking away your responsibility. It will be protected. “For government agencies, it will strengthen you and ensure that every government agency is empowered to perform its statutory role according to its Act,” he stated. He added that the proposed authority should be regarded as more than the establishment of another regulatory agency, describing it as a strategic measure to maximise the economic opportunities in the housing industry by resolving longstanding institutional weaknesses and regulatory shortcomings. Speaking at the event, the Minister of Housing and Urban Development, Dr. Muttaqha Rabe Darma, said the federal government was stepping up efforts to resolve the structural and institutional problems affecting the country’s housing sector. The minister revealed that the Ministry had convened a similar stakeholders’ meeting in July, where challenges relating to Nigeria’s housing deficit were examined and validated, with available estimates putting the shortfall at more than 15 million housing units. He observed that despite Nigeria’s estimated population of approximately 240 million, mortgage financing remained largely inaccessible, compared with the situation in several other countries, thereby limiting the ability of many citizens to own decent and affordable homes. “Our population, as of today, is estimated to be about 240 million, but as speakers after speakers mentioned, mortgage penetration is very low. It is less than 10 per cent, as against 38 per cent in Malaysia and 40 per cent in South Korea,” he said. Darma noted that although the country had institutions such as the Federal Mortgage Bank and other mortgage financing organisations, the number of mortgage facilities provided annually remained insufficient to address the nation’s housing requirements. He also recalled that the built environment and real estate industry had been ranked as the third-largest contributor to Nigeria’s economy, emphasising the importance of creating favourable conditions that would enable the sector to operate more efficiently and maximise its contributions. The minister expressed the Federal Ministry of Housing and Urban Development’s support for the conference and the proposed establishment of the regulatory authority, noting that the initiative could strengthen coordination in housing delivery, real estate investments and mortgage financing. However, he urged stakeholders to examine the possibility of placing the proposed authority under the supervision of the Ministry of Housing and Urban Development to promote effective coordination and ensure consistency with the federal government’s existing housing policies. He explained that countries such as Singapore, Dubai, Malaysia, the United Kingdom and Rwanda had adopted similar arrangements with comparable regulatory institutions operating within ministries responsible for housing and the built environment. Darma also called for a coordinated working relationship among the proposed authority, the National Housing Finance Authority and the mortgage policy being developed by the federal government, which is currently awaiting presidential consideration. In his remarks, the Managing Director and Chief Executive Officer of the Ministry of Finance Incorporated (MOFI), Dr. Armstrong Ume Takang, applauded the House of Representatives for maintaining its collaboration with the Executive arm of government in addressing the challenges facing the housing and real estate industry. Takang assured that the presidency and the federal government were prepared to give the proposed legislation adequate and objective consideration, particularly regarding critical concerns surrounding the country’s existing legal and institutional arrangements. He identified the relationship between the proposed law and the Land Use Act as one of the major areas requiring careful attention, alongside the regulation of professional practices and the need to avoid excessive regulatory requirements that could discourage private sector participation and investment. The MOFI chief executive further urged stakeholders to design a regulatory framework that would strengthen and complement existing government institutions without creating unnecessary bureaucratic structures or increasing the government’s recurrent expenditure. “To what extent are we going to address the regulation of practice in this sector? To what extent are we also going to ensure that the sector is not overregulated? And how do we create this new agency and fit it into the existing structure of government in a way that we do not expand the recurrent expenditure framework of government?” he queried. He assured participants of the government’s willingness to work with relevant stakeholders towards building a more robust, transparent and sustainable housing and real estate industry that would attract investments and deliver greater economic benefits to the country. Also delivering the keynote address, the Speaker of the House of Representatives, Rt. Hon. Abbas Tajudeen, advocated the creation of a centralised and digitalised real estate administrative system to simplify property transactions, boost public confidence and position Nigeria’s housing market as an attractive destination for domestic and international investors. Abbas stressed the importance of establishing a dependable digital connection between property ownership records and the identities of their owners, as well as between buyers and sellers, to curb fraud, resolve cases of multiple ownership claims and minimise disputes arising from land and property transactions. In his keynote address titled, “Building a Trusted and Investable Nigerian Real Estate Market,” the Speaker maintained that Nigeria’s housing problem was not necessarily caused by a lack of available properties but by inadequate trust and confidence in the country’s real estate market. “Nigeria does not lack property. Nigeria lacks enough trust in property,” he said. He argued that proper regulation should not be seen as a barrier to genuine business activities but as an essential mechanism for protecting the industry against fraudulent dealings, unhealthy competition and the exploitation of unsuspecting investors and prospective homeowners. According to the Speaker, effective regulation provides protection for credible businesses, strengthens market confidence and establishes the institutional credibility needed to attract sustainable, long-term investments into the housing sector. The proposed National Real Estate Regulatory Authority is expected to establish a coordinated regulatory structure for Nigeria’s housing and real estate industry, improve consumer protection, enforce professional standards and address institutional shortcomings that have continued to impede the sector’s growth and development.