Business

Lagos Renters Struggle as Soaring Costs Push Housing Out of Reach

The rising prices, driven by poor macro-economic conditions, inflation, high interest and exchange rates, as well as escalating building material costs, have created a daunting situation for renters, pushing the dream of finding suitable housing further out of reach.

Published

2 months ago

July 10, 2023

Samed Olukoya

Lagos, the bustling economic hub of Nigeria, is currently witnessing a daunting challenge in its rental market as soaring costs make housing increasingly unaffordable for many residents.

Landlords in Lagos, particularly those in highly sought-after areas such as Lagos Island, Ikeja, and Victoria Island, are capitalizing on the high demand for rental properties by substantially increasing rents.

This surge in rental prices has left countless tenants grappling with the harsh reality that their hard-earned incomes may no longer suffice to secure a decent home in a desirable location.

According to Moruf Akinderu-Fatai, the state’s commissioner for housing, the rental market in Lagos is exceptionally active, with a staggering 80 percent of its 20 million population residing in rented accommodation.

Among the various types of housing available, 2-bedroom flats are witnessing the highest demand. This surge in popularity can be attributed to a multitude of factors, including the economic challenges that have caused many individuals to lose their jobs or face salary cuts.

Also, young executives and aging individuals seeking downsized living spaces often find 2-bedroom flats to be the ideal choice.

In Lagos, the average rental price for a 2-bedroom flat stands at ₦2 million per annum. However, the rental spectrum is vast, with the most expensive flats commanding a staggering ₦14 million per annum, while the cheapest options are listed at ₦350,000 per annum.

Such exorbitant prices have left prospective renters in a predicament, struggling to find affordable options that meet their needs.

Nevertheless, amidst the bleak rental landscape, there are a few pockets in Lagos that offer some respite for tenants seeking moderately priced housing. Locations such as Ilupeju, Gbagada, and Surulere, which are considered middle-class settlements, present opportunities for tenants to secure 2-bedroom flats with rents ranging from ₦1 million to ₦2 million per annum.

Ilupeju, affectionately known as ‘Indian Village,’ is located on the Lagos mainland within the Mushin Local Government Area. This area attracts tenants not only due to its well-developed road infrastructure but also its accessibility and ease of transportation to other parts of the city. The average rent for a 2-bedroom flat in Ilupeju is approximately ₦1.5 million per annum, with rental prices spanning from ₦1 million to ₦4.9 million per annum, depending on the specific property.

Gbagada, positioned between the Kosofe and Shomolu local governments, is another favored location for renters. Despite the slightly higher prices, Gbagada’s prime positioning and residential ambiance make it an appealing choice. The average rent for a 2-bedroom flat in Gbagada hovers around ₦1.7 million per annum, while the rental range extends from ₦720,000 to ₦2.9 million per annum.

Surulere, a residential and commercial Local Government Area on the Lagos mainland, commands relatively higher rental prices due to its close proximity to Lagos Island, the city’s economic center. The average rent for a 2-bedroom flat in Surulere stands at ₦1.6 million per annum. The rental spectrum in Surulere spans from ₦584,000 per annum for the cheapest flats to ₦3.5 million per annum for the most expensive options.

As the rental crisis in Lagos deepens, prospective tenants find themselves in a precarious situation. Balancing affordability and location preferences has become an arduous task, with limited options available. Renters must exercise caution and thoroughly navigate the challenging housing market to secure suitable accommodation that aligns with their budgetary constraints and lifestyle needs. Unless effective measures are implemented to address the affordability crisis, Lagos residents may continue to endure the hardships of an increasingly unattainable rental market.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Company News

Dangote Refinery Controversy: Safety, Quality, and Financial Woes Unveiled

Tension Between Aliko Dangote and NNPC Raises Concerns Over Nigeria’s Oil Industry

Published

6 hours ago

September 22, 2023

Investors King

The Dangote Refinery, an ambitious project by Africa’s wealthiest man, Aliko Dangote, has found itself engulfed in a whirlwind of controversy, pitting Dangote against the Nigerian National Petroleum Corporation (NNPC).

This recent dispute, marked by safety concerns, incomplete construction, and financial woes, has left many questioning the ethics, quality, and viability of Africa’s largest refinery.

Sources close to the situation reveal that Aliko Dangote is seeking the elusive license to commence operations, the final crucial step before production can begin at the refinery.

However, the NNPC, Nigeria’s regulatory body, has balked at granting the license due to legitimate safety concerns, chiefly stemming from the incomplete status of the facility.

Also, Dangote’s bid to purchase crude oil from the NNPC was met with a firm denial, citing the refinery’s incomplete status as a deterrent. This has sparked allegations that Dangote may be considering unconventional methods, such as sourcing Nigeria’s crude through trading houses, which could be viewed as circumventing established procedures.

Even if Dangote manages to secure the necessary crude oil, concerns regarding safety and product quality persist. Workers within the Dangote Group, as well as contractors and some NNPC officials, have voiced apprehensions about commencing refinery operations prematurely.

The current state of the refinery only allows for the initial phase of crude distillation, a process akin to operations found in illegal refineries within the Niger Delta region. The unfinished catalytic cracking unit further amplifies worries about the quality of refined products.

Amid these concerns, it appears that Dangote’s motivations may be driven by financial pressures. Reports suggest that the Dangote Group is grappling with substantial debt, potentially jeopardizing the company’s stability if it fails to secure additional funds for loan repayments by December. This financial strain could be the driving force behind Dangote’s eagerness to obtain the operating license, even without the refinery being fully ready.

Recalling events from earlier this year, the uncompleted refinery was hastily commissioned by former President Buhari. This move aimed to grant Dangote access to additional equity funding from the Nigerian Government and secure a crude oil allocation of 300,000 barrels per day. This allocation was intended to be sold to raise funds for creditors and aid in completing the refinery.

However, when the new administration of President Tinubu took office, it was discovered that the refinery was far from completion, raising suspicions that it was falsely commissioned to secure the crude allocation for export.

The ongoing standoff between Aliko Dangote and the NNPC illuminates broader issues surrounding safety, quality, and financial stability plaguing the Dangote Refinery project.

Business

National Council of Managing Directors of Licensed Customs Agents Protests Central Bank’s New Price Verification System

Published

1 day ago

September 21, 2023

Samed Olukoya

Members of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) have expressed their strong opposition to the recently introduced price verification system at Nigeria’s ports by the Central Bank of Nigeria (CBN).

They argue that this new system is in violation of the Customs and Excise Management (Amendment) Act 20 of 2003 and the Nigeria Customs Service Act of 2023, which govern the valuation of imports.

In a letter dated Wednesday and signed by Mr. Lucky Amiwero, the founder of NCMDLCA, addressed to several key government officials, including the President, the Secretary to the Government of the Federation, the Chairman of the Senate Committee on Customs and Excise, the Chairman of the House Committee on Finance, the acting Governor of the CBN, the Ministry of Justice, and the Attorney General of the Federation, among others, the group urged President Bola Tinubu to disregard the circular issued by the apex bank regarding the introduction of the price verification system.

NCMDLCA went on to explain that the process of valuing goods in Nigeria is explicitly outlined in the Customs and Excise Management Act 20 of 2003 and the Nigeria Customs Service Act 35 of 2023.

These laws grant authority over the treatment, processes, procedures, and determination of the valuation of imported goods based on the transaction value method.

The letter further stated, “We hereby bring to the attention of the Federal Government of Nigeria that the Central Bank circular TED/FEM/PUB/FPC/001/008 of 17th August 2023, Go-Live of the Central Bank of Nigeria Verification System Portal, contravenes the following laws of valuation of imported goods: Customs and Excise Management (Amendment) Act 20 of 2003 and Nigeria Customs Service Act 2023.”

Amiwero also said that the Customs and Excise Management Act (CEMA) is the sole legal framework for determining the value of imported goods.

He argued that the additional requirement of price verification by the CBN duplicates the functions of the Customs and would create bottlenecks and conflicts when determining the value of imported goods.

According to Amiwero, the valuation process is clearly defined in the existing laws governing the valuation of imported goods.

He expressed concerns that the implementation of the CBN’s price verification system, if allowed to proceed, would result in redundancy and cumbersome procedures within the import and export system, especially for individuals not well-versed in valuation and import-export procedures.

This protest by the National Council of Managing Directors of Licensed Customs Agents sheds light on the growing concerns surrounding the Central Bank’s new price verification system and its potential impact on the country’s import and export processes.

The issue is likely to spark further discussions and debates among relevant stakeholders and government authorities.

Company News

Dangote Industries Limited Reaffirms Commitment to Bolstering Employment Opportunities for Nigerians

Dangote Industries Limited has underscored its unwavering dedication to fostering employment opportunities and advancing the cause of decent work for the Nigerian populace.

Published

3 days ago

September 19, 2023

Investors King

Dangote Industries Limited has reiterated its steadfast investment in critical sectors of the nation’s economy to facilitate job creation and stimulate the growth of meaningful employment.

Speaking during the induction ceremony of a new cohort of graduate trainees, Mr. Aliko Dangote, the President of Dangote Group, highlighted the company’s transformative journey from a commodity trading entity to a manufacturing powerhouse.

This evolution is a testament to their unwavering mission to contribute significantly to Nigeria’s industrial development, consequently positioning the nation prominently in the African industrial landscape.

“The core mission of our group is to improve the lives of the people by addressing their fundamental needs. This noble objective can only be achieved through the production of essential goods that cater to the needs of our people. This is why we have made massive investments across various sectors of the economy,” stated Mr. Dangote.

Mr. Dangote further emphasized the pivotal role that manufacturing plays in meeting the needs of the populace and its potent ability to combat poverty by creating job opportunities.

He commended the ongoing graduate trainee program as a tangible manifestation of their commitment to employment generation, recognizing its positive impact on the lives of countless individuals.

In a strategic move aimed at fulfilling their goal of job creation and addressing the basic needs of the Nigerian people, Mr. Dangote revealed that his Group has expanded its business portfolio with three significant investments valued at over $20 billion.

These investments encompass the refinery, petrochemical, and fertilizer sectors, with the potential to not only bolster the nation’s economy but also reinvigorate Nigeria’s foreign exchange reserves.

Also, these initiatives are anticipated to generate approximately $16 billion in foreign exchange earnings and offer an impressive aggregate of 250,000 jobs, thereby contributing to the reduction of youth unemployment in the country.

Dangote Industries Limited remains unwavering in its commitment to making substantial contributions to Nigeria’s industrial landscape, and its dedication to providing employment opportunities that uplift the lives of Nigerians is undeniably resolute.

The Group’s continuous investments in critical sectors reflect a steadfast commitment to shaping a brighter future for both the nation and its people.