Abuja-based estate developer and planner David Garnva has explained to Viewpoint Housing News why the multi-billion Naira land swap programme launched in Feb 2015 is truncated. Six private investors were given a district each to provide infrastructure and build houses as a way of reducing housing shortage in the Federal Capital Territory (FCT). Some of the investors had even moved to site but immediately there was change in government, the policy became moribund. Mr Garnva who is member of the Presidential Committee on the North East Initiative (PCNI) says the policy is suffering because it was not backed by law; this lack of relevant laws has been the bane of housing development in Nigeria generally.
Viewpoint: Land Swap programme was officially launched in Feb 2015 with investors given the green-light to commence work. Are you one of them?
Garnva: No. But in my opinion, it’s part of development in FCT. It’s one of the ways to provide mass housing for the people.
Viewpoint: Since the time it was launched, have you seen any difference in housing development?
Garnva: Those who went in and paid money are concerned. They shortlisted about 40 developers and finally six were given districts and they went ahead and signed all the necessary documents.
But as at today, I’ve not seen any physical development. I suppose there’s been change of policy in change of government. But I believe the FCTA [Federal Capital Territory Administration] should be in a better position to tell you what’s happening.
Viewpoint: From your wealth of experience as a planner, what do you think a policy of this sort should do for FCT?
Garnva: Let me take you back to Land Use and Allocation Decree now an Act. Under that provision, government has the right to acquire land for public purposes. When you acquire land, you have to pay adequate compensation.
However, there are various ways of compensation. Under land swap, the communities involved have been designed to have adequate compensation. If you see for example, Abuja, the concept was that the whole people were to be settled and taken out of Abuja.
When government saw the amount of money involved, which then was substantial, it was reviewed that people would be left in those areas. Had they got it through, everybody would have been evacuated from Abuja and settled outside; the question of land swap wouldn’t have come.
It’s because the policy was reviewed and people left and began to take title as indigenes of Abuja, the issue of land swap came up. Now for you to acquire land, under the Land Use Act, you have to first of all go through the site allocation, hold meetings and ensure that the land is acquired formally.
Under land swap specifically, the communities are taken care of in terms of their interests. Government doesn’t have enough money to do all the compensation so what it does is the private sector comes…public private partnership, such that government protects its interest, making sure that the land acquired is developed in accordance with the government approved layout or development plan.
Government has the right also to protect the interest of the owners of the area. The developer doesn’t just go take the land, develop it and the settlers or indigenes there are left dry.
Land swap means that their land is taken and in turn, they’re given benefit for their land – certain percentage of land or portion of development is given to them. In that case, they become perpetual owners of what have been.
In developed countries, under land swap, they have lawyers to protect their interest. I’m not sure that was done. But the government has responsibility to protect the communities in that those developers, when given a district, the contents of their development show that government gets revenue from it as well as the developer…they’re not charity. But more importantly, the community affected is taken care of.
But this land swap programme, because of change in policies and people are afraid of what’s happening, the developers have not been actually given the free hand to start developing.
Viewpoint: Who’s afraid here?
Garnva: The developer.
Viewpoint: Afraid of government?
Garnva: No change of policy. The total contents of their involvement, they’re going to bring out a lot of money. They don’t have the money. They have to use banks and they have to charge a lot of interest. You have to be very careful.
Viewpoint: When this policy was promulgated, former minister Bala Mohammed said due diligence was done so the policy can stand. Why fears now?
Garnva: Continuity in government business has remained problem in Nigeria. When you have changes in government, especially when a different part comes up, it makes it worse. Any intelligent investor will be very cautious of how much he‘s going to invest. He has documents signed, right! But government has the big hammer, at any time they can make things difficult.
The environment of doing business in Nigeria is not sustainable, it’s adhoc. And the political situation doesn’t make it nice. If the agreement had clauses that whether this government or another comes in, nothing will interfere…for example the Millennium City, the Abuja Central Business District development are beautiful projects. They have been worked out by previous governments but when we don’t have the sustainable commitment by successive governments…
In physical development, of course, a lot of capital is involved. Not question of millions. It’s a lot of billions in dollars. And investors will want to ensure that their investments are protected in perpetuity. When that cover is not given, they will be cautious.
And we’ve not heard the policy of the present FCTA on this. I’ve not heard a policy statement by this government on land swap. When as a developer, you signed agreement with previous government and those who take over never give something that endorse your commitment, you can’t continue.
And of course, interest varies. Those who were shortlisted at first and those who would want to come in through the back door…
Viewpoint: Was there any fraud in the deals?
Garnva: Question of fraud, unless you’ve seen it in black and white. If it was not fairly done [allocation of districts]. First of all, proposals were evaluated just like a bid. So if the evaluation process wasn’t transparent, then those people will petition. I’ve not heard of any petition. Have you heard of petition?
Viewpoint: There was a public hearing by joint committee on FCT — the House of Reps and senate. And there were responses from developers and financiers.
Garnva: But up till now, there’s no clear cut [position] from FCTA. If you don’t have a clear-cut go ahead to continue, we have to be very honest!
Viewpoint: From an investor/developer perspective, what’s your final word on this logjam?
Garnva: I happen to be a member of the technical committee that reviewed the national housing programme and we examined 32 different laws and regulations that have to do with housing in Nigeria. We looked at them and put together nine different laws to make housing private sector driven, effective. We sent it to the national assembly. Up till today, nothing came out. That was 2003/2004.
One of them is the forfeiture law. The other one is the Federal Mortgage Bank Law. Even the law on the Federal Mortgage Bank done many years ago has not been reviewed. The things they do only get presidential approval.
For example EDL [Estate Development Loan] was a presidential approval. It’s not a law of the FMBN. These are things that are packaged to the new law. When you don’t have laws formally signed and approved by the national assembly on critical areas of housing, you can’t get programmes implemented.
For example, the forfeiture law. If somebody buys your house, is supposed to pay monthly. If he defaults the first, second, third month, you take over your house. That’s what happens in other countries.
In Nigeria, somebody buys your house, he defaults, he gives you a reason. You take him to court. He takes you to court. Now, if you have 50 houses and you have 20 people going to court at the same time, when will you have time to do that? You hire lawyers to pay them? Won’t that make your business bankrupt?
Investors in housing aren’t protected. We don’t have laws protecting investment in housing. Laws will give confidence to developers. In that case, whichever government that comes in, it will not do things that will jeopardize any signed agreement.
Even this mass housing programme is facing a lot of hiccups. Any government that comes in will look at it with a different eye. Land swap, laudable as it is, if successive governments do buy in…If it were private sector investment, not done by the FCTA, it would have continued. Land swap was not properly documented with a law establishing it.
