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CBN new withdrawal policy will cause a hike in housing cost – REDAN
Real estate developers have said the new withdrawal policy, if implemented, will lead to a rise in the price of housing units.
This was as they urged the government to revise the plan as it might make or mar government’s commitment to reduce the housing deficit.
The CBN in a memo in November announced a limit on cash withdrawals made by individuals and organisations with effect from 9 January, 2023.
The bank mandated that over-the-counter cash withdrawals by individuals and corporate bodies do not exceed N100,000 and N500,000, respectively, per week. It also directed that the maximum cash withdrawal per week via ATM should be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
The President and Chairman of the Council of Real Estate Developer Association of Nigeria, Aliyu Wamakko, said the policy would make life intolerable for the 38 million unbanked adults representing 36% of the masses.
He said, “It is seriously going to be a herculean task for the unbanked if the government do not rethink this policy.
“The policy to pay processing fees will increase our cost of production and business in real estate is garbage in, garbage out.
“If I have to go to the bank every day and they will charge me 10 per cent for my withdrawals and this happens for 30 days, it will definitely affect my selling price.”
“Real estate construction involves direct labour and its workers are people who work on daily pay. So, you work with them and pay. So, imagine you have 20 houses under construction with not less than 10 labourers on each site. Even if you are paying them N3,000 per day, that will be N600,000 in total, how much are you expecting me to withdraw to pay them?
“Most of our construction is with direct labour and direct labour requires someone to work for you and you pay him there and then. Also, most of these bricklayers and labourers don’t even have a bank account. So, it is mind-boggling for us.
“We know it is a Federal Government issue but we are calling on them to review the policy not only because of us but for those in the rural areas who don’t even what a bank is all about. They should have a rethinking and make life easier for the people.”
Meanwhile, players in the building industry have reacted to the cash withdrawal limit policy of the Federal Government.
They noted that such moves would affect the labourers who are largely unbanked and rely on daily payments for work done.
A contract supervisor, Obinna Francis, said that the CBN’s cash withdrawal policy would affect his business because he often engages the lower rung of the construction ladder.
He said, “Most of our workers are roadside people; we pick them along the way. So 80 to 85 per cent of the labourers don’t have bank accounts, so they depend on cash.
“Now, if I have up to 30 workers that I want to pay and each of them will receive at least N50,000, if we do the calculation, that is N180,000, but CBN tells me that I cannot only withdraw N100,000 per day.
“How will I help it? If I transfer to my co-supervisors, they will also be looking at the bank charges. The workers don’t want to pay bank charges, if they want to withdraw 50,000 from the POS, the POS people will charge you at least N700 to N1,000.
“So it means the worker will have to forfeit something to withdraw his money from the bank. Except you want to calculate the charges and add them to their payment.
“As a contractor or supervisor, it will affect my profit. If the least I am going to make N50,000 to N100,000 from a project of N1m, I will not want it to go below five per cent profit no matter what.”
However, Akinropo Abraham, a property consultant with Fola Elegbede and Co, said that the CBN policy was a welcome development in the building industry.
He said the artisans would have to adjust and respond to the new way of daily payments.
Abraham noted that the policy would help to curb the incidents of armed robberies caused by the culture of moving and keeping cash for building work.
Also, a property broker, Collin Ibie, disclosed that the policy would affect land owners and land sellers stuck in the culture of receiving cash.
Ibie said he had recently experienced land sellers demanding cash instead of transferring money after the sale of a land.
He said this was because the seller was sceptical about bank transfers.
Ibie, however, noted that the cash withdrawal limit and the cashless policy of the CBN were welcome developments.
“Because of the old-fashioned way of dealing with clients, there are some people who would prefer cash. For example, I closed a sale two months ago and this land seller in Ajah said he was not going to sign the sale documents unless he received cash.
“That led the buyer to go to the bank and bring physical cash. So, not everyone is willing to operate in the cashless society.
“However, I align with a cashless policy, which means that any person that I will have dealings with will have to adhere to the new bank policy. I am for it; it is stressful moving cash everywhere.”
“Even for the labourers, they have to be encouraged to have a bank account. People are adjusting, and roadside sellers and mechanics are gradually adjusting to a cashless society. It may affect my business for a while, but I am for it.”
The Lagos State Government has said it would soon arrange a meeting with developers/owners of distressed buildings on how best to address the redesign and remodelling of such structures by November.
This was disclosed recently by the Commissioner for Physical Planning and Urban Development, Oluyinka Olumide, at a function in Alahusa, Lagos.
Olumide said the prevalence of distressed buildings in different parts of the state was worrisome and needed the urgent attention of all stakeholders.
He said, “The Ministry of Physical Planning and Urban Development as mandated by the Lagos State Urban and Regional Planning and Development Law, 2019, as amended, was willing to extend its responsibility for approving the remodelling of existing buildings to provide technical assistance to developers and owners of distressed buildings, especially on the design and remodelling of such buildings.
The Federal Government has instructed the contractors responsible for the 107km Enugu-Onitsha road dualization to expedite the project.
This directive was given by the Minister of Works, Senator David Umahi, during a meeting with MTN, the Enugu State Government, and the contractors, RCC Ltd and Nigercat Ltd, on Friday.
According to a statement released on Friday, the minister said he is disappointed over the slow pace of work on the project, he said, “Let me express my disappointment over the slow pace of work on that project. It is one of the worst roads in this country.
“Everywhere we have diversion; diverting from the one that RCC and Nigercat had completed, the contractors are not kind enough to even put stone based on the diversion points.”
He added, “So, by the reason of the launching of our Operation Free our Roads, it is now a violation of the policy on the side of the controllers and directors of the Federal Ministry of Works where we have vehicles falling on any project that is ongoing or where there are potholes on our roads.”
He also blamed the sufferings of road users on the lack of commitment and insensitivity of the contractors.
“The public must know that the President’s intention is not for them to suffer while trying to fix the roads, and it is their right to insist that contractors should fix the roads that they are engaged on,” he said.
The Minister commended the Enugu state government for their resolve to fund the construction of a 20 KM section of the road and expressed hope that MTN would execute the second phase of the project.
He noted, “Why the Enugu State government is intervening is because of the slow pace of work by the contractors and because of funding issues. The essence of tax credit is for funds to be made available. And so, I don’t see RCC going to keep their promise to finish this project in 6 months.
“My advice to MTN is to look for another contractor within that axis if they want to get the job done. Division of labour is even the best. While they are doing the road, and if Nigercat is doing a good job, you can give them greater scope to do if you want to finish that job.”
He warned contractors that the Federal Government would not accept phased handovers of projects and has phased out Variation of Price in contract administration.
The Ekiti State government has intervened to resolve a longstanding land dispute between the Elepe of Epe-Ekiti, Oba Ayodele Adesoye, and the Atolagbe family. The government cautioned against the misuse of modernization as an excuse to disregard traditional customs.
In line with the community’s traditions, the government has ordered the release of resources, including palm trees at Oko Oba Farmland, to Oba Adesoye for his administration. This decision ensures the continued adherence to age-old practices.
Ekiti State Deputy Governor, Chief (Mrs) Monisade Afuye, announced the resolution in Ado-Ekiti. The decision was made after considering the Elepe’s claim to Oko Oba Farmland based on historical evidence.
Mrs. Afuye acknowledged the Elepe’s right to be the custodian of Oko Oba Farmland, citing longstanding traditions that support his claim. The decision reflects the importance of respecting historical practices and ensuring their preservation.
The deputy governor, however, told the monarch in clear terms that other princes and princesses from all the three ruling houses should be allowed to farm on the land without payment of royalty.
Mrs Afuye appealed to the community to comply with the government’s position to restore unity, peace and orderliness to the beleaguered community.
Oba Adesoye expressed gratitude for the government’s decision and pledged to foster peace and unity between the throne and the community, aiming to accelerate Epe’s development.
Representing the Atolagbe family, Dr. Yemi Agbeleoba acknowledged their willingness to cede Oko Oba Farmland to the monarch. However, he emphasized the need for all three ruling houses to participate for a lasting and traditional solution.
Agbeleoba expressed appreciation for the government’s directive, believing it will contribute to resolving the long-standing conflict.
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