Ugo Peters is the Founder of HXafrica, a VC-backed proptech firm that offers a lasting solution to the perennial problems facing the real estate industry amongst other traditional services such as development and brokerage. He is a SMEDAN certified Business Development Service Provider and the chairman of REICo Multipurpose Cooperative LTD. He currently mentors in Orange Country Nigeria and Fate Foundation and is an alumnus of School of Entrepreneurship, Founders Institute and Tekedia Institute.

It is important to firstly commend the past government on the initiative to reduce the housing deficit in the country by actively facilitating development of units, although the 8000 units produced or under production within the period referenced is a far cry from the 28 million units’ gap, it is still a step in the right direction. When buildings are not used or occupied, they deteriorate because it is through use that they are maintained, this is the surface cause of deterioration. There is however a root cause which is the absence of Product-market fit. These units were not built with the accurate socioeconomic data of the target market. For instance, most civil servants will not be able to afford these unit at their outright acquisition price points and the units they can afford may not necessarily match their family size.

To achieve product-market fit there must be an embedded system that fosters affordability. FMBN has such system called Rent-to-own which many have used to acquire units, but being a bank there are necessary barriers they must have for risk reduction which still has an effect of excluding some families who need this facility.

How extensive is the problem of unoccupied federal housing estates across various states in Nigeria?

From Kano to Umuahia, to Kwara, Lagos and Abuja, we have such estates, unoccupied and deteriorating. Beyond being unoccupied, there is a further challenge that contributes to government not having the funds to replicate such projects, as the development value is trapped as far there is no participation by the target market.

This is a vicious cycle that HXafrica through its platform solves, lowering the barriers to participation and ensuring ease of liquidating these assets, so that the government through its agencies can have a sustainable system to get back funds which can be redeployed to build more units.

Could you tell us more about this solution HXafrica is presenting?

I am not at liberty to say much on this, so it doesn’t amount to promotion as the solution is undergoing review by the Securities and Exchange Commission (SEC), We applaud SEC on the regulatory incubation programme.

What are the consequences of allowing these federal housing estates to remain unoccupied and deteriorating?

It goes without saying that the housing deficit numbers will continue to increase while the resources put into these projects will be eventually lost. The federal government earlier this month came up with a short-term approach to subsidise the purchase costs of the units, so it falls within the range that the target can afford, while this may present a short term solution , but it comes at a higher cost, as funds that would have been used for other development projects is now deployed to subsidy, that is the ripple consequence of not nipping this thing in the bud.

Has there been any attempt by the government to address the maintenance challenges faced by these federal housing estates?

If there is a maintenance schedule, then it will be evident in the status of the housing units , we wouldn’t be talking about deterioration , but then again it doesn’t make economic sense for the government to build those houses expecting to get funds back and then they put in more for maintenance increasing their exposure, If I were the Minister of Housing I wont sign off on that cheque, so we cannot hold the government responsible for not maintaining the units.

What role does proper maintenance play in ensuring the longevity and functionality of housing infrastructure in Nigeria?

Maintenance beyond the aesthetics preserves the value of properties, but it is justifiable with the actual use in the context of the housing units we are discussing. One doesn’t need to be incentivized to maintain a unit you have acquired, so we must have a sustainable system to ensure acquisition and use, when capital is held in these units then the stakeholders will ensure they preserve their assets.

Are there any successful examples of strategies implemented elsewhere to address similar challenges with housing estates?

Culture trumps strategy. I will rather make comparisons to systems that work in Nigeria.

We can safely deduce and conclude that any socio-commercial venture by the government must be executed by the private sector while the government retains oversight of the project. This what works in Nigeria

We don’t need to go to another country to know how to run our own estates.

How can the government effectively collaborate with relevant stakeholders to address the maintenance issues facing federal housing estates?

Aggregation platforms both online and off-line can ensure challenges like this are nipped at the bud.

What steps can be taken to encourage occupancy of these unoccupied federal housing estates?

Breakdown the purchase price into affordable fractions, here is a thought ,what if there is a system that go beyond acquisition, whereby we further reduce the barrier by offering the units for monthly rent and you move in just with your first month rent that will exponentially grow occupation. We must think beyond the regular and commit.

What long-term solutions do you propose to prevent similar issues from occurring in future housing projects initiated by the government?

Adopting technology that proffers lasting and sustainable solutions, ensure product-market fit of the units. It is easier to get this done when government focuses on actively setting policies that fosters private participation and profitability.