IMPACT OF REAL ESTATE
SECTOR TO THE ECONOMIC GROWTH OF NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The
Real Estate sector offers a great potential source of growth for Nigeria. Until
now, the understanding of its composition and growth has been somewhat limited
to its required use in Nigerian national accounts. Development
is a general word that encompasses all aspects of human life, segments and
disciplines, which give direction to the state of an economy. Globally, real
estate sector is one of the most profitable ventures of every economy and one
of the indices of measuring economic growth of a society. It is a sector that
mirrors the economic viability and sustainability of an economy and its poverty
level. Though there was no accurate data about housing shortage in Nigeria, it
was however estimated that the shortage has risen to over 17 million (Ebie,
2005). Successive governments over the years have attempted to resolve these
shortages with various policies but rather than reducing, the shortages kept
increasing year in year out. According to Ajanlekoko, 2001, the Federal housing
agencies located in each state of the federation, were statutorily created to
execute public housing programmes for each state of the federation based on the
formulated housing policies.
Specifically
they are to undertake the development of estates by acquiring, developing,
holding, managing, selling, leasing or letting any property movable or
unmovable in their respective states; provide a home ownership saving scheme in
respect of any housing estate or building owned, constructed and managed by
them with a view to enabling members of the public purchase or build their own
houses; provide sites and services scheme for residential, commercial and
industrial purposes for the people of their respective states; construct and
maintain modern dwelling houses at reasonable costs for sales to members of the
public, undertake the construction of offices, commercial and industrial
buildings for letting out to members of the public among other things, engage
in other investment activities and opportunities as may be determined by the
respective state governments. If there has been effective implementation of
housing policies, all these would have significantly benefitted the masses and
above all contributed to the growth of the nation’s economy as a result of
profit made from sales and rents. Unfortunately however, most of the state
housing agencies are under-utilized and have been rendered redundant and could
hardly carry out their primary responsibility as elaborated in the respective
laws setting up these agencies (Zubairu, 2001). Basically, the problems of
housing delivery in Nigeria are rooted in three major factors namely lack of
finance, escalating cost of building materials and infrastructural development
cost. These three problems are however peculiar to all housing delivery
agencies and somewhat make affordable and mass housing difficult and has however
reduced the contribution of the real estate sector to the nation’s economy.
1.2 STATEMENT OF THE PROBLEM
Today
in Nigeria, most of the housing corporations and the housing estates built by
the previous governments merely exist by names (Mailafia, 2005). In some
states, housing corporation staffs who are specialists in real estate
development and management are rendered irrelevant in their special field while
state ministries have taken over construction and in some states they have been
merged with the ministries. This situation has relegated housing development to
the background and hardly can we see any government owned housing unlike in the
second republic. These has drastically affected the amount of income generated
though the real estate sector. However, private partnership participation has
enable more person to benefit from the business to improve their personal
standard of living. However, the researcher is examining the impact of the real
estate sector on the economy growth of Nigeria.
1.3 OBJECTIVES OF THE STUDY
The
following are the objectives of this study:
1. To
examine the impact of the real estate sector on the growth of Nigeria’s
economy.
2. To
identify the factors limiting development of the real estate sector in Nigeria.
3. To
determine how the real estate sector can contribute massively to the economic
development of Nigeria.
1.4 RESEARCH QUESTIONS
1. What
is the impact of the real estate sector on the growth of Nigeria’s economy?
2. What
are the factors limiting development of the real estate sector in Nigeria?
3. How
can real estate sector contribute massively to the economic development of
Nigeria?
1.5 HYPOTHESIS
HO:
Real estate sector has not contributed to the economic growth of Nigeria.
HA:
Real estate sector has contributed to the economic growth of Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The
following are the significance of this study:
1. Findings
from this study will be a useful guide for the policy makers and the government
of the day on how real estate sector can contribute to the nations development
and how the housing policies can be implemented effectively to boost economic
growth.
2. This
research will also serve as a resource base to other scholars and researchers
interested in carrying out further research in this field subsequently, if
applied will go to an extent to provide new explanation to the topic.
1.7 SCOPE/LIMITATIONS OF THE STUDY
The
scope of this study on the impact of the real estate sector on the growth of
Nigeria’s economy will cover the structure and activities of real estate in
Nigeria and its contribution to the nation’s economy.
LIMITATION OF STUDY
1. Financial constraint– Insufficient fund tends to impede the
efficiency of the researcher in sourcing for the relevant materials, literature
or information and in the process of data collection (internet, questionnaire
and interview).
2. Time constraint– The researcher will simultaneously engage in this study
with other academic work. This consequently will cut down on the time devoted
for the research work.
REFERENCES
Ajanlekoko
Joseph (2001) “Sustainable Housing Development in Nigeria – The Financial and
Infractructural Implication, Paper presented at the International Conference on
Spatial Information for Sustainable Development; Nairobi
Ebie
Fortune. (2005) “An X-ray of the Mortgage Industry In Nigeria”, Central Bank of
Nigeria Economic and Financial Review Vol. 43 No. 4, Abuja, CBN
Mailafia
Obadia.(2005). Central Bank of Nigeria Economic and Financial Review Vol. 43
No. 4, December , Abuja, CBN
Zubairu,
Mustapha. (2001). Restructuring Institute to “Jump Start” the housing delivery
process Guardian Newspaper 23rd April, Lagos.