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Mr. Toyin Adeyinka is the Chairman and Managing Director of the Sparklight Group, a firm with a market niche in real estate, furniture and mortgage banking. In this interview with SAMSON ECHENIM, the real estate tycoon speaks on the nation’s housing investment landscape and offers advice on affordable housing.Excerpts
What do you think is responsible for the seasonal increase in the price of cement in Nigeria, and what could be done to reduce the country’s dependence on the product?
I see mass production of burnt clay brick as one way of reducing the demand pressure on cement. The nation is endowed with clay, so, we need to focus attention on mass production of burnt clay brick to replace sandcrete block.This is an area Sparklight Group has focused on over the years.
The Federal Mortgage Bank of Nigeria seems not to be able to answer the Nigerian mortgage questions many years after it was established. Why in your opinion is this so?
No, I don’t think so. Federal Mortgage Bank of Nigeria(FMBN)has helped in increasing the housing stock through the Estate Developers Loan (EDL) product. Few Nigerians have also benefited from their National Housing Fund (NHF) scheme.I think government should pump fund into the bank to enable it carry out its statutory role effectively. We all know that housing deficiency is huge and it would take a large chunk of money to make significant impact in this sector. The process of accessing National Housing Fund (NHF) needs to be streamlined by the bank to cut down the time it takes to access the loan by subscribers.
The primary mortgage institution must be further empowered to play similar role mortgage banks play in developed countries.
Last year, the Lagos State Government enacted a tenancy law that forbids landlords from taking more than one year rent from new tenants. Considering the factors inhibiting provision of affordable housing, do you think the government was on the right path?
I think it is a good decision. However, the state government should encourage serious private developers to complement its mass housing effort. With more affordable homes readily available to the masses on mortgage arrangement, the demand for high rent deposit would diminish.
Omonile has become a thorn in the flesh of developers. Why is it proving difficult to handle?
To us, we try to avoid dealing with Omonile. We get land allocation directly from the government. I think it is the responsibility of the government to remove Omonile from the land equation.
Since government cannot directly provide adequate housing for the citizenry, is there any way it could create a relatively easy atmosphere for developers and those who want to build for themselves ?
Government must make land readily available at affordable rate to serious developers and also assist with the provision of basic infrastructure such as good road network, water and electricity. Our research institutions need to do more in terms of research and development of local cheap building materials.Government should find a means of reducing the interest rate charged by commercial banks for mortgage related loans for mass housing.
Nigerians tend to patronise imported products. With respect to home-made furniture, what is the level of patronage, and how could it be improved?
It is sad that local manufacturers of furniture are not adequately protected by government; everybody now goes to China to buy cheap and inferior furniture to the detriment of local producers. This is not peculiar to furniture manufacturers; other building material manufacturers are also affected. Government must come up with well defined strategies to protect local manufacturers in order to promote manufacturing in the country and provide employment for our teeming population.
With your Red Brick Sparklight Estate, you have opened up the corridors of estate development in the neighbouring Ogun State. Looking back, how do you feel ?
I feel delighted looking back at various challenges one has to overcome to get to the level we are today. In property development, location remains a very key factor in determining the viability of real estate, that is what this axis represents. We saw that when it was not quite obvious.
Is it cheaper building with bricks?
Burnt clay brick could be cheaper if used in building houses. No need for external painting. The high aesthetic value, good acoustics, and thermal effects are some of the characteristics that places it ahead of the conventional sandcrete block.
Which other areas are you looking to invest and why?
For now we wish to limit our investment to the real estate and mortgage banking sector. We are trying to consolidate on what we have achieved in the last 25 years of existence.
Doing business in Nigeria is said to be quite difficult. Besides poor power supply, what are other peculiar challenges that businesses face?
The difficulty in accessing cheap fund from the commercial banks, high cost of building materials, lack of government subsidies and access to cheap land are some of the latent challenges facing the real estate sector.
Many Nigerian youths naturally go into self employment when luck fails them in getting white-collar jobs.Was it the same story for you?
No. Not really, I actually resigned my appointment in 1987 as a chief engineer in a federal government parastatal to nurture Sparklight Group. The company was registered in June 1986.
What informed your decision to go into your line of business?
Passion for creative and engineering works. The need for backward integration to enhance our affordable mass housing objective. Contrary to your opinion, Sparklight Group has not reached her climax, as a matter of fact, we are just starting.
