Implications of insecurity on real estate in Nigeria
By Zubairu Usman Sadiq
The security challenge in Nigeria today, to say the least is worrisome. From the intractable Boko-Haram insurgency which has claimed thousands of lives and condemned several others to Internal Displaced Person Camps, banditry in the north-west, agitations and calls for secession in the south-east, violent clashes between the Fulani herdsmen and farmers all over the country, renewed surge in kidnapping in major cities of Benue, Adamawa, Kaduna, Katsina, Sokoto, Plateau States, and villages among others, Nigeria is now one of the hotbeds of conflict in Africa.
There are fresh concerns that insecurity may worsen with the recent abduction of no fewer than 46 pupils, teachers and other school personnel from schools in Oriire Local Government Area of Oyo State during a deadly attack on the schools. Unfortunately, the Oriire incident is far from an isolated case. Rather, it is part of an alarming pattern of mass kidnappings that has spread across Nigeria. On the same day of the Oriire incident, terrorists also abducted 42 pupils in Borno State. These are not merely isolated acts of criminality; they are symptoms of a deepening national security crisis that continues to erode public confidence in the state’s capacity to protect lives and property.
It is more worrisome that insecurity is spreading to hitherto peaceful parts of the country, such as Abuja, and the south-west, especially Ekiti, Ogun, Ondo, Oyo, Lagos and Osun where there had been resurgence of kidnappings. There were also similar cases in the south-south and southeast regions. Coupled with an intersection with poverty as a result of rising food prices which can be linked clearly to inaccessibility of farmlands taken over by criminal herdsmen and rampaging bandits, no doubt, we have reasons for serious concern.
The rising insecurity has resulted in loss of lives and destruction of properties, with huge economic implications on housing and real estate business. The United Nations High Commissioner for Refugees (UNHCR) said that the number of people forced to flee their homes has increased every year over the past decade. And this is a country that is already bedeviled with housing challenge, with housing shortage running into several millions. Many people, who are already housed, had their house razed down, while those displaced from their communities are left without homes, thereby worsening the overall deficit.
The level of insecurity in different parts of Nigeria has left a bad taste in the mouth of the nation’s development journey and, more specifically, has negative effects on real estate development in the country. Areas prone to security attacks from Boko Haram, Fulani herders, bandits, cultism, regular ethno-religious crisis, and other insecurity challenges in Nigeria are witnessing serious decrease as choice for home seekers. The reason is that the safety of the dwelling environment remains a key consideration when home seekers are making decisions on the purchase or leasing of dwelling places. No home seeker will rent or purchase a piece of property in an area where atrocities are rampant for fear of being burgled or their homes invaded and killed.
Therefore, most of the residents often flee these areas in search of more subtle places thus, resulting to filtration, which is a situation where houses are abandoned and occupied by lower income earners who cannot afford the maintenance. In essence these affect the level of real estate development in the area and reduce property values.
As a result, real estate investors now see the high-risk level of insecurity in the country as one of the factors that possess a threat to their various investment options. In most cases, these investors when carrying out investment analysis might end up exploiting or going for other investment options which would affect real estate development in areas prone to security challenges. In other words, insurgency across the country hinders investments in the real estate sector, a significant contributor to employment. Amidst this security challenges, are the persistent housing deficit currently witnessed in Nigeria. We should not forget that real estate developers are moving out of construction sites, as insecurity escalates.
From the commercial angle, real estate investors will be unwilling to buy or lease property to carry out their businesses in areas prone to looting by bandits, cultism, kidnapping, robbery, etc. for fear of the safety of their investments. The ripple effect of the above trend is a decrease in demand for existing residential and commercial property within the areas concerned and loss of investment for the developers who have spent personal and borrowed funds for such developments. This will surely put some real estate developers out of business except they can manage the situation properly.
The truth of the matter is that insecurity has significantly impacted the country’s real estate sector, leading to a decline in private sector participation, and rise in vacancy rates, displacement of millions of individuals, with the attending problems of other criminal activities.
I urge the government to take proactive, decisive, swift and a well coordinated approach to address the security challenge in the interest of real estate development and the economy as a whole. A new, and concerted push towards peacemaking is urgently required to reverse the trend, otherwise the real estate sector of the economy may soon be grounded.
Government should reinvent and rearrange the entire security architecture and apparatus. There is urgent need for improved intelligence gathering, mobilize requisite law enforcement and security agents to critical locations in the territory; equip the security organs adequately to curb the challenges
All stakeholders in security matters must be involved. I call on the security Chiefs to see their appointments as pure service to the nation, and employ all legitimate tactics to resolve the insecurity situation in the country. They should up their game in securing the country, otherwise it will adversely affect the real estate sector, and the economy if the current rate of insecurity continues.
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