Forex policy endangers real estate sector’
Stakeholders at the ninth Annual Distinguished Lecture organized by the Nigerian Institute of Quantity Surveyors (NIQS), Lagos Chapter, have blamed the country’s foreign exchange policy for the challenges facing the real estate sector.
This is just as they called for the encouragement of the use of local building materials to save the industry from collapse.
Delivering an address at the lecture titled “Foreign exchange problems, prospects and solutions in Nigeria: Construction industry perspective,” the Lagos NIQS Chairman, Mr. Bamidele Mafimidiwo bemoaned the effect of foreign exchange (forex) on the industry.
He explained that the lingering forex problems had caused a huge disruption to businesses in the sector, a situation that has been compounded by the recession. This has grounded new construction projects, leaving builders and suppliers in difficult financial positions, he added.
To transform the economy and boost industrial activity, Mafimidiwo said there was the need to restructure the monetary framework.
“Construction, housing, infrastructure, manufacturing, mortgage and other business activities of tangible output represent the construction industry; and today’s forum is to provide a platform to x-ray the industry vis-a-vis the meltdown effects and chart a way forward for the sector,” he said.
The guest lecturer, Henry Boyo, in his presentation, titled: “For the successful resolution of oppressive contradictions in Nigeria’s economy”, said: “It is appalling that the country has become so poor, despite her abundant human and material resources.”
He emphasised that the naira and the economy would remain stagnant as long as the CBN persistently auctions the dollar against the naira in a market that is suffocated by excess naira supply, created by the apex bank’s unilateral substitution of naira allocations for distributable dollar-denominated revenue.
“Thus, CBN’s forex interventions are, in fact, deliberate and a suicidal approach to gradually kill the naira, since the CBN would consciously sell its dollar stock for higher naira bids in such auctions. In this situation, the banks flourish, while the rest of the economy wrestles with deepening poverty,” Boyo said.
Boyo said the Central Bank of Nigeria’s (CBN’s) failure to manage an “irrepressibly” surplus naira supply has continued to stimulate a higher inflation rate for several years. This, he explained, has serious consequences on the purchasing power of the persons whose incomes are in naira.
Similarly, Executive Director, UACN Property Development Company Plc (UPDC), Yemi Ejidiran, said the forex challenge affected Grade A and B residential projects. “The government should encourage production of most of our finishing materials locally. We also need to come up with efficient designs, as it is clear that banks are not ready to finance any real estate project,” he said.
Stories by Babajide Okeowo
