There was a rush of adrenaline. It was just a year short of Nigeria’s 20th independence anniversary. The skylines were bereft of tall buildings. Nothing to compare to the Tower of Babel of ancient fame left uncompleted at its prime. As Nigeria almost turned a full circle of the second decade, a giant rose in the sky. It was a delight to behold, a sensation in the sky. Embraced by the clouds and caressed by the sun, it glistened in splendour. Towering and shimmering above any known tall building in Africa’s most populous nation, the NET Building (NITEL, NECOM) has stood the test of time as the incontrovertible tallest building in Nigeria. It is number four in Africa and 234 in the world.

42 years later, not much has changed. No other building has dared to beat the height. Nigeria’s housing developers have been afraid of heights, and it’s compounding the country’s housing crisis.

Nigeria’s real estate industry is young and vibrant, developing fast and increasingly attracting investors, especially in economically advantaged states like Lagos, Port Harcourt, and the country’s capital, Abuja

With an exploding population and rising housing deficit estimated at 17 million driving the demand, experts have predicted a bright outlook of 10 to 20 per cent value increase for Nigeria’s real estate market in 2021, despite COVID-19 downturns. However, as the industry bubbles to a brighter future, its failure to bridge the widening housing deficit gap pinpoints a giant vacuum in its housing development mechanism.

There are many real estate companies in Nigeria, concentrating on the states where housing demand is higher. Each of the developers marketed multiple lands, houses, and office space properties. One peculiar thing notably missing in their catalogue is skyscrapers (high-rise buildings), a housing infrastructural system that has seen highly populated and landlocked countries like China and Singapore stem the tide of housing deficit.

In 2014, Dr Anthony Ede, in a study on ‘Challenges Affecting the Development and Optimal Use of Tall Buildings in Nigeria,’ attributed lack of tall buildings in Nigeria to factors such as “a 100 per cent absence of regulation for high rise construction and maintenance, about 90 per cent lack of domestic expertise for high rise buildings and poor public supply of electricity and water.”

But there is more.

“The barriers include cultural bias to high rise, lack of technology, epileptic power supply, poor maintenance culture, poor fire service delivery, inadequate policies, and investment funding,” said Prof Adeolu Afolabi said in his research work ‘Vertical Architecture Construction: Prospects and Barriers in Solving Lagos Housing Deficit’.

Many real estate developers believe the major constraint is funding, and it is multidimensional. They said it is not just about the cash, but the things that will unlock cash are not exactly easy. They said, in Nigeria, it is difficult to use the land as asset-backed security to unlock financing. So, it becomes a situation where people have to put in raw cash instead of that asset to unlock the cash.

With a booming population of more than 206 million people, Nigeria can only boast of about 40 high-rise buildings. The 526ft 32-storey NECOM House in Lagos built in 1979, leads the pack, while the rest, located in different parts of the country, fall under 500ft, with the least being under 200ft. Most buildings were constructed before 2000, highlighting skyscrapers’ missing features in emerging Nigeria’s real estate market.

Although there have been attempts to bridge the gap with ongoing projects like the $1 billion Abuja World Trade Centre and the multibillion-dollar Eko Atlantic City, the high-rise feature in Nigeria significantly falls short.

The slow progress of the projects is attributed to poor funding, which developers said is the main reason few high-rises dot the skyline of Africa’s most populous country. But apart from funding, the three most feared hazards of tall buildings, fire, terrorist attacks, and building collapse, have also been fingered as factors hampering the development of high-rise buildings in Nigeria.

Some real estate developers believe that the lack of government participation and support is also stymieing the potential growth of high-rise buildings in Nigeria, as poor economic policies and developments have spooked foreign direct investment.

They pointed out that Dubai has a record of developing high-end mixed-use structures by giving tax holidays to the developer and those that will occupy the building and other forms of incentives like pioneer status, but these incentives are lacking in Nigeria.

For a landlocked place like Lagos, the lack of skyscrapers in Nigeria’s real estate development only exacerbates its housing crisis buoyed mainly by its meagre land size of about 1,171.28 square kilometres, a landmass so cramped for its over 20 million population. Although other places like Abuja, Calabar, Port Harcourt, and Enugu, with distressing housing situations, have larger landmass, they face major housing crises in the near future.

The United Nations projects Nigeria’s population will double in 2050, reaching about 401.31 million due to its 3.2 per cent yearly growth rate. With an anticipated future full of people, the remedy for Nigeria’s housing crisis lies greatly in incorporating high-rise buildings in its emerging real estate market.

Learning from China and Singapore

When it comes to housing, China and Singapore share common challenges with Nigeria. In China, the challenge is a large population of people. While in Singapore, it is a limited landmass, a situation similar to Lagos. China has more populated regions than Nigeria but has managed to contain its housing deficit using the high-rise building template. With more than 1400 skyscrapers above 492 ft constructed, the South Asian giant has the largest number of tall buildings in the world. This number of tall buildings has enabled China to shelter its over 1.4 billion people, the largest population in the world.

Singapore, with a landmass of 728.6km, is one of the smallest countries in the world. Home to a growing population of multicultural groups and a tourist centre, the Asian country has constructed more than 8,600 high-rise buildings, a development believed to have helped eliminate its housing crisis.

A real estate developer, Dim Chukwu, said for Nigeria to meet its affordable housing needs, high-rise buildings must come into play. “Developers are concerned about so many factors. There is a lack of funds, and there is a lack of expertise to construct tall buildings. Individuals are only building what they can afford to build. The government is not showing enough commitment, and major real estate companies are concerned about return on investment,” he noted.

Ede explained that to harness the many advantages of high-rise buildings fully, the government and all stakeholders must take bolder steps to confront the challenges. “This will go a long way in providing an answer to the problem of inadequate housing in Nigeria, particularly in Abuja and Lagos, where there is limited availability of buildings and usable land,” he said.

People, we run a really great program in Tekedia Institute. But this impact would not have been possible without our amazing Faculty members. These are professionals and business legends who are driven by the desire to impact knowledge. We thank them. Typically, whenever I see great things from their companies, I commend them. Who would not like to learn from the best?

Good People, join me to congratulate Tekedia Fintech Faculty, Olugbenga GB Agboola, CEO of Flutterwave, for linking Flutterwave with Discover Global Network: “Discover Global Network and Flutterwave have signed an agreement that will support the expansion of online payments acceptance for both African and international ecommerce merchants. Flutterwave’s merchants will be accepting Discover Global Network cards from Discover, Diners Club International, and network alliance partners on ecommerce payment pages and via apps.“

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… press release

Discover Global Network and Flutterwave have signed an agreement that will support the expansion of online payments acceptance for both African and international ecommerce merchants.

Flutterwave’s merchants will be accepting Discover Global Network cards from Discover, Diners Club International, and network alliance partners on ecommerce payment pages and via apps.

With more than 300,000 merchants globally, Flutterwave makes it easier for businesses to process payments. According to Vanilla Plus, the company recently announced the launch of Flutterwave Store, an ecommerce solution for brick-and-mortar businesses and mom-and-pop stores that helps them offer their inventory online, receive payments, and sell from home.

Discover Global Network includes cards from Discover, Diners Club International, PULSE, and more than 20 alliance partner networks including relationships in Brazil, South Korea, India, Turkey, and Nigeria. Discover Global Network also provides acceptance in over 200 countries and territories with more than 50 million merchant acceptance locations and 2 million ATM cash access locations.

This partnership meets a real demand from both local and foreign cardholders to be able to include their card as their saved mode of payment for their online accounts with these merchants to accumulate the points and other benefits associated with their preferred card.

Nigeria is way behind in preparations for a new energy age. There is a palpable fear about the deleterious impact of climate, as it could undermine our sovereignty and wash off coastal communities from our map. Sadly, Nigeria unlike Saudi Arabia doesn’t have the wealth and technical expertise to drive an urgently needed energy transition, say less of emerging as a regional and global leader. Although, it has plans for renewable power but we are yet to see any plan in place to manage emissions and also to develop a circular carbon economy. In short, we aren’t developing these efforts and reducing emissions as quickly as possible.

In Center for Strategic & International Studies report on energy transition, the report expects National Oil Companies (NOCs) to play a critical role in ensuring global energy security. The challenge is how opportunistically can Nigeria grow as the oil majors shrink. We have seen oil majors’ movement deeper into the seas of the Niger Delta. Also, Oil major’s rapid divestment is feared to set off an energy crisis and experts argued that it will do little to cut emissions.

Activists and experts are worried that forced asset sales could leave more production in the hands of privately held companies like Dangote Oil Refinery & Petrochemicals, Waltersmith Refining & Petrochemical Company Limited, OPAC Refineries, Niger Delta Petroleum Resources, BUA Refinery & Petrochemicals and Edo Refinery and Petrochemical Company Limited and they are doubtful that these firms would adhere to rigorous environmental and safety standards as cries for energy transition ramp up. However, as energy transition get massive global sway, only those with the technical capacity, access to capital, and project management skills could play critical roles in how our clean energy future emerged.

Nigeria in falls into CISS Report as a country with a struggling NOC, i.e NNPC. This CISS report expects NOCs to fill in the gap, to ramp up investment to expand production and capture market share. They argued that these companies may benefit if the global oil and gas industry underinvests in exploration and production in the coming years. Sadly, the energy transition poses serious risks to our competitiveness or even our survival, taking cognizance of the high production cost of making a barrel in Nigeria. It is worrisome that our resource base would become less competitive with the departure of important technical and financial partners.

Presently, we cannot make significant progress without a strategy to manage our energy transition. Privatizing NNPC may help but it looks like we are late. We need to look hard at the present state of things, especially high choking debt levels and how climate change is transforming the north with desertification and the south with massive floods. We need to analyze our energy needs and economic priorities. We need an adaptive strategy, the tools and critical leadership support to pull off our own transition. That is the only way we can drive fast and become more resilient, and not left behind.

It is time to for a major policy shift by the Nigeria Government on oil. We need to start signing an array of sweeping executive orders targeting the environment, including developing a new agency for managing the funds from this last stage of rapid oil transition revenue, localize the Paris climate propositions, tax the fossil fuel industry and use the funds to implement our energy transition before we can start revoking permits for new and old oil fields and converting our government’s fleet of vehicles to electric power.  We need an ambitious proposal that will drive net-zero greenhouse gas emissions across Nigeria’s economy by 2035 while not jeopardizing the overall economic health.

As Nigeria moves into an election year, we need competent candidates who can optimize revenues from our oil and gas leases, help us marshalling out strategies for addressing “the near-term impact on exploration and production, as well as royalties to states,”. Millions of jobs will be lost and gained as diverse climate change plans by West & Asia hit home and so will the impact be for us locally; it will hurt oil-dependent economies like us with dire consequences.

It is time to setup ‘The End of Oil Development Corporation (EDC)’. We can collapse NDDC into EDC and the Federal Ministry of Petroleum into the Federal Ministry of Petroleum and New Energy Resources like we have done with the Federal Ministry of Communications and Digital Economy. This corporation should be driven by bold policy moves and men-of-character that will improve opportunities and boost livelihoods across the oil communities who will feel the crude impact of the end of oil and the larger states as we need to lead the world in recovering from this pandemic-like energy transition. This corporation should lead with the mandates to improve living standards, grow the private sector and spread prosperity in heavily impacted oil communities.

Nigeria needs a clearer sense of energy leadership and her transition strategy must enjoy the full backing of its national assembly leadership. We are moving into a future environment where oil demand will peak or plateau, thereby ushering an exacerbated revenue volatility and with the threat of steep, if not terminal, decline in the value of Nigeria’s oil. So what do we do? We have to focus on value-added downstream opportunities in fertilizers, plastics and specialty chemicals etc.

Yet this has to be matched with structural fiscal reform, cut in public wages and efficiently rechanneling of subsidies, accelerating the deployment of EDC funds for people-oriented capital projects and most ambitiously the upgrade of Nigeria’s youthful workforce in tandem with this energy transition. We must incorporate private sector buy-in and exercise the political will to make our diversification efforts and policy reforms a success.   

In all, with a zero-net future, we must be mindful of too much regulation that could stifles growth. And be wary of too little regulation which could harm public safety and national security. EDC is a platform that will help us continuously discover sweet spots that can lead us into harnessing the likely massive revenue from a chaotic end of oil process and most importantly lead our local communities into the new energy age.

I run a subscription service called Private Client Services (PCS) where business leaders email, call and ask questions. Let me share this correspondence with a client as many here have asked similar questions. I have edited out specific broad recommendations since no one here signed PCS terms (risk on you).

PCS Client Question: Ndubuisi, we want to invest in NSE [Nigerian Stock Exchange] banks. With what is happening in fintech, what do you think?

Ndubuisi Response: Chairman, the long-term outlook on Nigeria’s banking system is positive. However, I see a challenging half-decade on their valuations as investors price the impact of fintechs/ digital challenger banks. As global investors prefer the fintechs, over buying stocks of the banks, I expect a sustained underperformance which would accelerate in late 2023 when the digital tech firms circle more domains. Even insurers and HNI independent investors are betting via these fintechs rather than buying direct bank stocks. Any substitute vehicle is not good for the bank stocks.

Yet, the banks, led by extremely brilliant minds will find ways to keep investors happy: I expect dividends to accelerate and that would be a way to cushion the effect of the evolving perception. So, if you want to buy bank stocks, buy dividend paying ones, with the assumption that even if the stocks do not move, dividends will take care of you. Here are the best using the aggregate of the last 5 years:[…]

The banks have great balance sheets and are evolving also just as fintechs. More so, the only way banks can play would be holdco which gives them structures to also do what fintechs are doing. So, we cannot count them out. Here is my calendar; let us speak and I will provide more insights when you are free.

Ndubuisi