ASSESSMENT OF VACANCY AND OCCUPANCY RATES OF RESIDENTIAL PROPERTY

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ASSESSMENT OF VACANCY AND OCCUPANCY RATES OF RESIDENTIAL PROPERTY

ABSTRACT

This study assess vacancy and occupancy rates of residential property in Tammah, Nasarawa town. The specific objectives of this are to ascertain the extent of vacancy of properties in the Nasarawa town, to evaluate the causes of vacancy of properties and to examine the implication of vacancy of occupancy rate to property investment market in Nasarawa town. The research adopted the survey design which offers the opportunity to gather information through the use of questionnaires, personal interview and observation. A Sample size of 143 respondents was using which  was drawn from landlords and estate surveyors and valuers residents in Tammah. A structured questionnaire was administered to the respondents to gather relevant data for the study. Data were presented and analysed using simple statistical tools such as tables and percentage. The study revealed that the housing stock in Nasarawa is very adequate and that the extent of vacancy and occupancy rates of property is on the positive side. The study also shows that the vacancy and occupancy rate can affect the return on property investment. Finally, the researcher recommend that property investors should invest more in Nasarawa real estate market since the market has a positive indicator of making higher return on investments as it exhibited low vacancy rate and higher occupancy rate and that the investors and property developers should be very conversant with the forces of demand and supply of the real estate market so as to make investment decision that will not adversely affect their investments.

Key words: Vacancy rate, occupancy rates, Residential Property

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

A vacancy rate serves as an important indicator of the health of a real estate market. But we cannot draw sound inferences about a market just by observing the rate alone because many factors contribute to a vacancy rate. The same rate may tell different stories, and different rates may tell the same story. The vacancy rate is the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. It is the opposite of the occupancy rate, which is the percentage of units in a rental property that are occupied. High vacancy rates indicate that a property is not renting well while low vacancy rates can point to strong rental sales (Smith, 2015).

The vacancy rate is calculated by taking the number of vacant units, multiplying that number by 100, and dividing that result by the total number of units. The vacancy rate and occupancy rate should add up to 100%.In real estate, the vacancy rate most often represents units that are vacant and ready to be rented, units that have been turned off upon the exit of a tenant, and units that are not currently rentable because they are in need of repairs or renovations. A property owner can use vacancy rates as a metric for analysis. Changes in the percentage of vacant units versus occupied units, the length of time occupied units are remaining active, or other rental conditions can provide guidance regarding how competitive a property owner has made the property. If a property owner is charging significantly more or less than the rest of the rental market, this may be reflected in the overall vacancy rates. It can also provide information regarding the effects of price changes or advertising on unit occupancy.

While vacancy rates are commonly used to assess an individual property’s performance, such as a hotel monitoring its nightly vacancy rate, aggregate vacancy rates are also used as economic indicators of a real estate market’s overall health. Many firms servicing the residential and commercial real estate space gauge the strength of the overall industry using metrics such as vacancy rates, rental rates and construction activity. According to the natural rate hypothesis, fluctuations in apartment rents are driven by deviations in the vacancy rate from equilibrium or “natural” levels. One reason to estimate natural vacancy rates is to confirm this hypothesis. Beyond that, however, estimates of the natural vacancy rate for a rental housing market provide information that is potentially useful for investors, lenders and other real estate professionals. Comparing the natural rate at a point in time to the actual vacancy rate provides some indication of future rent movements in that market. In addition to its effect on the movement of rents, the level of the vacancy rate has direct implications for the return on property investment. In long-run equilibrium, the lower the natural vacancy rate, the greater the amount of rent generated by a given rental property, everything else held constant. If the natural vacancy rate declines over time, the return on rental property investment will rise, ceteris paribus.

Housing markets are often modeled as a series of separate but related submarkets, with differing supply and demand conditions in each. In the case of a rental market, there may be separate submarkets for different apartment types (one-bedroom, two-bedroom, etc.), and for different geographic locations. If submarkets exist, it is possible that natural vacancy rates will vary by submarket. In that case, information on natural vacancy rates is made more useful if available at the submarket level.

Empirical support for the existence of a natural vacancy rate in rental housing dates back to Smith (2015). Since then, a number of studies have focused on variations in the natural rate across both space and time. For example, Gabriel and Nothaft (2018) provide evidence of substantial variation across major U.S. metropolitan areas. In a more recent paper, Gabriel and Nothaft (2018) find the duration and incidence of vacancies, and the natural vacancy rate, to vary across metropolitan areas with a number of factors including housing costs, heterogeneity of the housing stock, tenant mobility, and population growth. This has necessitated the need to carry out an assessment of the impact of vacancy and occupancy rate on residential property in Nasarawa town; a case study of Tammah. 

1.2       Statement of the Problem

The vacancy rate is the fraction of rental properties not let at a point in time. This captures pressures in the residential property investment market. It becomes important to understand the balance between supply and demand, future pressures on rental prices and the typical duration of vacancy for a landlord’s budgeting purposes. The relationship between the vacancy rate and the housing production rate is expected to be negative as well. If the vacancy rate is high, the supply of residential property will be higher than the demand for residential property, which means that the property prices are stable or decreasing. Consequently, developers won’t have much stimulus to engage in residential property development and the housing production rate will be relatively low. This study seeks to assess the impact of vacancies and occupancy rate on residential property in Nasarawa town with particular reference to Tammah.

1.3       Aim and Objectives of the Study

The aim of this project is assess the impact of vacancies and occupancy rates on residential property in Nasarawa town.

The specific objectives of this are as follows:

1. To  identify the vacancies rate of residential property in Nasarawa
2. To ascertain the extent of vacancies rate of residential property in Nasarawa
3. To examine the causes of vacancies of residential properties in the study area
4. To assess the impact of vacancies and occupancy rates on residential property in the study area.

1.4       Research Questions

            The following research questions will serve as a guide to the researcher:

1. What is the vacancies rate of residential property in Nasarawa
2. To what extent are vacancies rates of residential properties in Nasarawa town?
3. What are the causes of vacancy of properties in the study area
4. What are the impact of vacancies and occupancy rates to residential property in the study area?

1.5       Significance of the Study

The findings of this research “Assessment of the impact of vacancy and occupancy rate on residential property in Nasarawa Town” will serve as a guide for investors to be able to make reliable investment decision that will ensure high return on investment.

The result of this study will serve as a guide to other researchers who are interested in further research into the impact of vacancy and occupancy rate on residential property investment market in Nasarawa and Nigeria at large.

1.6       Scope of the Study

The scope of this study covers the assessment of vacancy and occupancy rate on residential property in Tammah. The study is further limited to both side of Tammah that is, from Federal Polytechnic Nasarawa Junction to overhead tank and from Federal Polytechnic Nasarawa Junction to Polytechnic Staff School.

1.7       Operational Definition of Terms

Vacancy: Dictionary.com define vacancy as the state or condition of being vacant or unoccupied; emptiness.

Occupancy Rate: A measurement expressed as a percentage of the total amount of occupied space divided by the total amount of existing inventory. Occupied space is defined as space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant.

Vacant Space: Vacant space is defined as space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available.

Percent Leased Rate: A measurement expressed as a percentage of the total amount of leased space divided by the total amount of existing inventory. Leased space is defined as space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease.

Investment: An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future.

Real Estate: Real estate is the property, land, buildings, air rights above the land and underground rights below the land. The term real estate means real, or physical, property.

Property: In common law, real property (immovable property) is the combination of interests in land and improvements thereto, and personal property is interest in movable property. Real property rights are rights relating to the land.

Investor: An investor is a person that allocates capital with the expectation of a future financial return. Types of investments include: equity, debt securities, real estate, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc.

Availability Rate: A measurement expressed as a percentage of the total amount of available space divided by the total amount of existing inventory. Available space is defined as the total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date, although it excludes space available in proposed buildings.

1.8       The Study Area

Nasarawa Emirate in Nasarawa State is located in the Central region of Nigeria. It is flanked by Keffi and the Federal Capital to the North. To the South, it is bounded by Benue River and to the west, it bordered the present Gadabuka and Toto Local government area which are of course, part of the Emirate. To the East, it is bordered by Doma, Lafia and Keana Local Government Areas all of Nasarawa State.

The founding of Nasarawa Emirate in 1835 AD was the consequence of palace tussle that arose in Keffi between Umani Makama Dogo then Madaki of Keffi and Jibrilu, son of Abdu Zanga (first Emir of Keffi).

 On the sick bed of Abdu Zanga, He gathered his brothers and sons and told them to appoint Umaru Makama Dogo as the Emir of Keffi which was never realized after the death of Zanga due to the betrayal to one Albarka. However, Makama Dogo was advised to move Westward of Keffi where the Kwato (Igbira) resides, fought then and established his own kingdom but he kicked against the idea and moved Yankardi, where he camped about ten kilometer South of Keffi.

Makama left his sons Ahmadu Manman Galadima and Manman Sani in Keffi as a flash back. He later left Yankardi where he arrived at a place occupied by Bassa speaking people called TAMMAH, met Bagobiri known as Kasimau, who assisted him in the establishment of a kingdom called Nasarawa (meaning victorious). Makama Dogo fought many wars in the course of his Islamization, fought Afo speaking people, conquered Ubbe, Usheni, Agwadama, Itta and Gwaffa.

Makama Dogo also conquered Panda due to some misunderstanding between him and Ohimege (the ruler of Panda). Makama Dogo fought the people of Toto (Igbira people) because of the combination of Islam and traditional way of worship by the people. After fighting other kingdoms like Dogo, Agaza and Udeni, Umaru told Madaki Ahmadu his eldest son to continue leadership after his death and should please be buried in Nasarawa town.

Physical Characteristics: The major things considered under physical characteristics of Nasarawa are, geographical location, temperature, rainfall, geology, wind, vegetation, humidity, soil.    

Temperature: The temperatures are generally high during the day, particularly between the months of March and April. The main monthly temperatures in the state range between 20⁰C and 34⁰C with the hottest months being March/April and the coolest months being December/January.

Rainfall: The study area experience dry season without or little’s rainfall from November to March of about 95mm, which is wet season is from April to October of about 1.30mm,

Vegetation: Nasarawa is situated in the Benue valley between the Benue river and Jos Plateau. This area lies within the part of southern guinea savannah. The vegetation of Nasarawa has, to a large extent resulted from extensive agricultural use of the land, the predominant vegetation type is partly savannah which is characterized by a discontinuous canopy, shrubs and grasses many areas are affected by man through bush burning during the dry season. Among the common trees are oil bean trees, locust bean free and isoberline trees.

Relative Humidity: The relative humidity is the measurement of deepness of the atmosphere which varies from place to place and different time of the day. The level of humidity in Nasarawa state in January is quite less that 40% which rises as from February to July to about 88%. By April when the steady rain commences it will be about 75% by August when the inter-tropical discontinuity is at it northern part, must position of the entire state will experience tropical marine wind and continues till December.   

Soil: The major soil units of Nasarawa belong to the category of oxisols or tropical ferruginous soils. The soils are derived mainly from the basement complex and old sedimentary rocks. Lateritic crust occurs in extensive areas on the plains while hydro orphic soils (limbic incept sols) occur along the flood plains of major rivers (Nyangba, 1995).

Socio-Economic Characteristics: Nasarawa main economic activity is agriculture; cash crop, such as yam, cassava and egusi (melon). Production of minerals such as salt is also another main economic activity of people in the state; Nasarawa produces a large proportion of the salt consumed in the country.

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THE IMPACT OF REVENUE GENERATION IN LOCAL GOVERNMENT ADMINISTRATION IN NIGERIA

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THE IMPACT OF REVENUE GENERATION IN LOCAL GOVERNMENT ADMINISTRATION IN NIGERIA

(A CASE STUDY OF TOTO LOCAL GOVERNMENT OF NASARAWA STATE)

CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

Local government is recognized by the 1999 constitution of the Federal Republic of Nigeria as the third tier of government within the tripartite federal structure of governance in Nigeria, with the state and federal government as the super ordinate government. The government in Nigeria which exists at tripartite arrangement (federal, state and local government) plays complimentary roles to each other to meet the needs of the people which include infrastructural facilities (Okpata 2004).

Furthermore, local government is seen as a public sector organization, the third tier government with assigned functions and responsibilities, administrative structure and financial management both for maintaining itself and rendering it’s statutory assigned functions to it’s citizens (Uguru 2011). Local government authorities as a third tier of government in Nigeria are very important in the execution of both central and component government policies and programmes. It is the nearest government that deals with the problems of the masses of the country, especially the grassroots.

One area which has remained neglected over time by the local governments in Nigeria is revenue generation. The usual practice in this country (Nigeria) is that political parties and individual candidates often make promises to the electorate during electioneering campaigns without being explicit on how they intend to finance such programmes. In line with this practice, candidates seeking political offices often promise vote-catching programmes with scarcely any attention to the question of funding (Fajobi, 2010). The result is that ordinary citizens may witness very little government activities and the impact of the government will be felt in almost all sphere. This may lead to disappointment. It is quite obvious that very little thought, if any, is given to how funds were to be generated to implement the various programmes promised to the electorates.

Local governments across the country are particularly guilty in this respect. Chairmen complain of their inability to meet their wage bills with the current level of the local government finances. Chief executive often tries without success to slash the wages of their workers while others may resort to staff retrenchment in order to save money to implement programmes.

Fajobi (2010) argued that the acute dearth of fund currently facing the local government could be squarely attributed to lack of creativity on the part of the local government in seeking alternative sources to complement the allocation from the Federation Account. Most local governments are suffering from hang-over of overdependence on the centre for assistance, a norm during the military governance. They are yet to break away from the practice of relying almost entirely on extension from the Federal Government. The federal government, in turn also depends entirely on revenue from oil and its apportionment of the lion’s share of the Federation Account to itself. Local government will continue to be one of the prime institutional movers of development in Nigeria and their importance and impact on the daily life of citizens cannot be over-emphasized. People are intimately affected by the activities of local government on a day to-day basis and Nigeria, in particular, local governments, have historically provided services of importance to citizens, literally from cradle to grave. The standard of living of Nigerians either in rural or urban areas are inevitably affected by local government activities through the provision or non provision of basic services such as water supply, roads, health and educational services etc. Local governments also remain the focal point of promotion of development and cultural revival through community development projects and mobilization of human and material resources for developments. It is on the basis on the foregoing that this study will be focused on the impact of revenue generation in local government administration in Nigeria: a case study of Toto Local Government of Nasarawa State.

1.2     Statement of the Problem

Obviously, the internally generated revenue in Nigeria Local Government is far below expectation. It has become imperative to diversify areas of revenue generation especially with the dwindling federation allocation which has been the major sources of revenue to the local government. Since inadequate revenue remains one of the devastating challenges hindering effective local government administration in the country, it then necessitated the general outcry by the administrators (chairmen) of local government for a change in Revenue Allocation Formula or strategies for improving revenue generation in the development of their respective local government areas.

Again, the problem of seeing local governments as a mere appendage to the state and federal government financially has beclouded the patriotic and entrepreneurship psyches of local government administrators, hence most local government tilted financially to the federal government for monthly statutory allocation from the federation account. This problem of economic and financial overdependence of the local government in Nigeria is devastating, uncalled for and against the motives for the creation of local government as the third tier. Furthermore, the inability of the local administrators to use in-sourcing techniques for funds to finance the council through internally generated revenue is a thorn in the flesh of meeting up their constitutional responsibilities such as the provision and maintenance of social services (education and health care) payment of the worker’s salary and so have given rise to whether to scrap or restructure local government systems in Nigeria. It is in line with the above problematic scenario that this research is motivated to carry out an empirical analysis on the impact of revenue generation in local government administration in Nigeria with particular reference to Toto local government area of Nasarawa state.

1.3     Objectives of the Study

The broad objective of this study is to examine the impact of revenue generation in local government administration in Nigeria: A case study of Toto Local Government Area of Nasarawa State. Hence; the following specific objectives will be actualized:

1. To identify the source of revenue for local government administration in Nigeria.
2. To ascertain the various challenges surrounding revenue generation for development in Toto Local Government of Nasarawa State.
3. To evaluate the impact of revenue generation on the development of Toto Local Government Area of Nasarawa State.

1.4     Research Questions

In line with the objectives of the study, the following research questions will pilot the study:

1. What are the various source of revenue for local government administration in Nigeria?
2. What are the challenges of revenue generation for development in Toto Local Government of Nasarawa State?
3. What are the impact of revenue generation on the development of Toto Local Government Area of Nasarawa State.

1.5     Significance of the Study

The primary importance of this study is that it examine the impact of revenue generation in local government administration in Nigeria with particular references to Toto Local government of Nasarawa State. This will in essence be of great significance to local government administrators, students of public administration and other related departments, other researchers, the state and federal government as strategy can be replicated.

1.6     Scope of the Study

The focus of this study is to examine the impact of revenue generation in Local Government Administration in Nigeria with particular reference to Toto Local Government Area of Nasarawa State.

1.7 Limitations of the Study

This research admits its short-comings or limitations. It is a mark of intellectual honesty to admit that limitations did exist in a research undertaking and to give an account of the way they have been manifested and taken care of. This will enable future investigators to have an idea of what militating factors to look out for and possibly to take care of them. The basic limitations of the study are: financial inadequacies, time factor, the uncooperative attitude of some respondents and scanty resource materials on the subject under investigation.

Finance: Limitation of financial resources, coupled with other pressing personal demands militated against the researcher’s efforts to cover a wider geographical area. The researcher had to spend so much to download materials from the internet. This was however ameliorated through parental assistance and the adoption of cost saving techniques during the course of the study.

Time Factor: Time lag was also a major constraint because the research was carried out within a given time-frame. This work was carried out in an environment where the researcher had to battle with lectures, assignments, class work and sourcing for materials for the study. However, the researcher made tremendous efforts to cover adequate issues in order to give value to the findings of the study.

Uncooperative Attitude of Some Respondents: In the course of carrying out this study, some respondents were reluctant to accept and fill their questionnaire. However, the researcher discovered that their main purpose for being reluctant was because of fear of private information disclosure. The researcher however convinced them that every information will be treated with the highest level of privacy.

Scanty Resources Materials: One of the major hindrances of the study was scanty materials on the strategies of increasing and improving revenue generation for development. Very few journals, government and newspapers publications exist. Hence, the researcher resorted to the available publications and content analysis in order to beef up the content of the work.

1.8     Operational Definition of Terms

Local Government: This is defined as Government at the local level exercised through representative council established by law to exercise specific powers within defined areas.

Revenue: In the context of this study, revenue is defined as the fund required by the government to finance its activities.

Strategy: In this study, this is defined as a systematic proposed way to achieve a particular aim or objective.

Development: This is defined as the multidimensional expansion in the economic, political and behavioral attitudes of a particular community, state or country.

Internally Generated Revenue: This refers to the revenue or money collected by the local government from its internal sources (within the Local Government Area). The internal sources of revenue comprise many major and miscellaneous items aggregated to provide the required fund for financing the enormous functions ascribed to local government as third tier of government.

AN ASSESSMENT OF THE ROLE OF GOVERNMENT IN ADULT LITERACY PROGRAM IN SULEJA LOCAL GOVERNMENT OF NIGER STATE

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Literacy of the citizens is one of the concerns of many countries and the world at large. Literacy is the ability to read and write at a specific age. The literacy level of any country is one of the indices of its national development. Literacy is fundamental to information dissemination, socio-economic development and poverty alleviation among other things (National Bureau of Statistics (NBS), 2011). Low level of literacy and education in general can impede the economic development of a country in the current rapidly changing technology driven world (Indexmundi, 2012).

Education as the whole process of the development of an independent and integrated personality, it entails training and acquisition of special skills, knowledge, attitudes and values needed by an individual to be responsible and which would enable him to contribute his own quota, to the growth of the society of which he is a member ( Jekayinfa and kolawole 2010).Education is a process whereby the adult members of a community help the young ones to learn, as Nduca (2010) stated that, education is the process of cultural transmission and renewal, it is a three- way process of inheriting a culture, changing that culture for better or worse, and passing it to the younger generation.

Therefore, the worthy development of an individual for self comfort and control to some extent is a function of education. Both developed and developing nations have acknowledged that education empowers and engages the mind for the development of human and natural resources.Hence education is an inevitable instruments that catalysis national development(Heclans 2001).

The provision of adult education, including reading, writing, numeracy skills, and  information communication technology (ICT) for adults who wish to improve their literacy and numeracy  competencies to enhance their participation in personal, social and economic life, Adult literacy programmes should be primarily focused on learning outcomes.(Heclans 2001).As observed by (Igbo 2008) adult education is an instrument for helping the active population worldwide with information communication technology (ICT), which is a decisive tool for the smooth integration of economy in the global economy. It is concerned not with preparing people for life, but rather with helping/assisting people (adults) to live more successfully as useful and acceptable members of their societies and contribute meaningfully to the development of those societies. (Fasokun 2006).Farley (2010) also put forward that people who are more educated know why they are not supposed to make prejudice comments and consequently disguise their prejudices.  However, the poor public image of adult education field as an area of study for the old people is undoubtedly partly responsible for its low patronage as a discipline in Nigerians Universities (Aruma 2011).

Adult education was defined by UNESCO (United Nations Educational, Scientific and Cultural Organization), in Nzeneri (2008). As  the entire body of organized educational process, whatever the content, level and method, whether formal or otherwise, whether they prolong or  replace   initial education in schools, colleges and universities as well  as in apprenticeship, whereby persons regarded as adults by the society to which they belong, develop their abilities, enrich their knowledge, improve their technical or professional qualifications or turn them in a new direction and bring changes in their attitudes or behavior in the twofold perspective of full personal development and participation in balanced and independent social, economic and cultural development. Adult education is an aspect of basic education.  Nigeria as a developing country is concerned about the literacy level of its citizen and as such embarked on mass literacy campaign by the use of a programme known as “literacy for all” in the year 2020. (Heclans 2001). Therefore, Access to education is an important concern to nations all over the world. In Nigeria, it is observed that many sections of the population have no access to literacy education or the life skills necessary for their economic and social well-being. Nigeria has an adult literacy rate of 59.2% and adult illiteracy rate of 40.8% (UNESCO 2015). This represents about 40 million Nigerians.

Government has realized that unless aggressive measures are taken to scale up literacy, the Education for All (EFA) goals III and IV relating to learning and life-skills for all young people and 50 per cent improvement in levels of adult literacy by 2015, especially for women, and equitable access to basic and continuing education for all adults and youth by 2015 will not be achieved(NFE Policy Guideline 2012)). This has made the Federal Ministry of Education to launch the revitalization of youth and adult literacy programmes in March 2011 in order to help increase the literacy rate and ultimately contribute towards the achievement of EFA and Millennium Development Goals as well as the nationaldevelopment goals of empowering the people on wealth creation and economic growth.

It is against this background that this study seek to assess the role of government in adult literacy program in Suleja local government of Niger State.

1.2       Statement of the problem

Following the background given above, there is a great concern over the illiteracy rate in the world population, although 3^rd world countries have experienced increase in literacy rate over the past few decades. Illiteracy is a great hindrance to the promotion of national development.  It is not only an obstacle to the social-economic and political transformation of the country, but its eradication will also quicken the tempo of development.  Due to illiteracy many adult Nigerians, especially the populace at the grass root level, in Ilorin West Government Area seems not able to participate meaningfully in the development process of the district.

It has been proven over time that Adult Education is a major tool for eradicating illiteracy and its adverse consequences, this might have led to the consideration given to it by the National Policy on Education, but this study intends assessing level of Niger State Government towards achieving this.

2.3       Purpose of the Study

The main rationale of this study is to assess the role of government in adult literacy program in Suleja Local Government area of Niger State.

Specifically the study intends to:

1. Investigate the level of involvement of Niger State Government in adult literacy education in Suleja Local Government
2. Find out the strategies and innovations that government has put in place since the inception of adult literacy programme in Suleja Local Government.
3. Find out impact of adult literacy education on the indigenes of Suleja Local Government.

1.4       Research Questions

1. What is the level of involvement of Niger State Government in adult literacy programme in Suleja Local Government?
2. What innovation has the government initiated since the inception of adult literacy programme in Suleja Local Government?
3. What are the resultant effects of the implementation of adult literacy programmes on the adult learners in Suleja Local Government?

1.5       Scope of the Study

This study is an assessment of the role of government in Adult Literacy program in Suleja Local Government of Niger State. The population for this study is all adult literacy learners, organizers, instructors and facilitators in Suleja Local Government.

The targeted population for this study will be ten (10) adult literacy centres in Ilorin west, all the ten (10) centres were chosen and all the learners, organizers, instructors and facilitators in the centres were all chosen for this study. To elicit information from the respondents, questionnaires were administered to the respondents. The close- ended questionnaire to use comprises of two (2) sections; A and B. section A comprises of respondents demography data. Section B comprises, of questions on the impact of government on adult literacy programme.

The data collected form the respondents were quantified using descriptive statistic (frequency count and percentage) for both demographic data and to answer the research question.          

1.6       Significance of the Study

The findings of this study could be of benefit to the government, Adult education instructors, general public, adult literacy centers, Adult education unit in local governments, and adult learners.

Findings of this study will enable government to know the level of her involvement in adult literacy programme and adjust if need be. Also findings of this study will enable the instructors of adult education to insert more effort to their activities and source more from the government and other agencies for adequate material needed for the performance of their duties diligently and effectively. Findings of this studywill equally helpAdult literacy centers to make proper amendment and follow up.

More so, findings of this study willenlighten the staffs in adult education unit to be aware of the necessary things which are to be provided by the government for the recruitment and proper delivery of the classes to the adults. This finding will also benefit the adult education learners in literacy and numeracy skills associated with higher earnings, improved workplace productivity, better workplace safety and increased chances of stable employment.  The skills support success in higher level qualifications and attainment of other workplace skills; and provide adult learners with social benefits such as: improved personal well-being, social development of individuals, communities, better health and better parenting.  

1.7       Operational definitions of terms

• Adult: a grown up person, who has attained full maturity and is fully developed.
• Illiterate:an uneducated person, who lacks the ability to read or write.
• Literate: An educated person with competence in reading and writing also in counting and ability to do simple calculations.
• Adult education: This refers to the general enlightenment programme that is put together to develop the adults or matured citizens of the society.

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CHALLENGES OF FLOODING IN PORT HARCOURT METROPOLIS AREA

CHALLENGES OF FLOODING IN PORT HARCOURT METROPOLIS AREA

CHAPTER ONE

INTRODUCTION

1.1     Background Of The Study

Throughout history, water supply has been among the decisive factors in the search for adequate settlement locations. This has made river banks, coastal areas and lakesides to become preferred living spaces (WMO/GWP, 2008). Most cities, including Port-Harcourt are located in the valleys and flood plains or on coasts owing to their additional location advantages which favour development. Flood plains in the lower reaches of rivers provide fertile and flat land for productive agriculture. Moreover, estuaries and other coastal areas are more favoured as settlement locations since they may serve as linkages between river and sea navigation (WMO/GWP, 2008). However, one of the costs of such favourable locations is an increased flood risk. Irrespective of this, people continue to live in these areas.

A flood is the accumulation of too much water which rises to overflow land which is not normally submerged (Mukhopadhyay, 2010). Flooding can comprise overflow of a river as a result of prolonged seasonal rainfall, rainstorm, snowmelt, dam-breaks, accumulation of rainwater in low-lying areas with a high water table, or inadequate storm drainage. Floods could also be caused by intrusion of sea water onto coast lands during cyclonic/tidal surges (Handmer, Penning-Rowsell and Tapsell, 1999; Stoltman, Lidstone and DeChano, 2004). Floods have been noted to cause about one third of all deaths, one third of all injuries and one third of all damage from natural disasters (Askew, 1999). Flooding in various parts of Nigeria have forced thousands of people away from their homes, destroyed businesses, polluted water resources and increased the risk of diseases (Jeb and Aggarwal, 2008; Etuonovbe, 2011; Olorunfemi, 2011).

The occurrence of floods in Nigeria is not a recent phenomenon (Ayoade, 1979; Ayoade and Akintola, 1980; Olaniran, 1983; Ologunorisa and Terso, 2006; Adeloye and Rustum, 2011). The recent occurrences of flooding in Nigeria such as Sokoto flood in 2010, Ibadan flood in 2011, Lagos flood in 2011, and most parts of the country in 2012 had shown that flooding is one of the major environmental problems faced in Nigeria. Floods in Nigeria occur in three main forms, viz; coastal flooding, river flooding and urban flooding (Oriola, 1994; Okoduwa, 1999; Folorunsho and Awosika 2001; Ologunorisa, 2004; Orok, 2011). A review of these forms of floods have shown that, no single factor can be singled out as the only factor responsible for each flood type, though, a factor (e.g. rainfall) can cause all flood types. It has increasingly been acknowledged that the Niger Delta region in Nigeria experiences perennial floods owing to its location, low-lying topography and heavy rainfall, and Port Harcourt (located in the Niger Delta region) is one of such areas considered to be vulnerable to flooding. Some research works that examined the causal factors of flooding in Nigeria have attributed it to topography, soil/vegetation/river alteration, increased heavy rainfall, uncontrolled waste dumping, land use change and unplanned urbanisation (Oriola, 1994; Onokerhoraye, 1995; Parker, 1999; Folorunsho and Awosika 2001; Ologunorisa, 2004; Ogba and Utang, 2008; Adeloye and Rustum, 2011).

Flooding incidents have claimed many lives, rendered many others homeless and disrupted a wide range of environmental factors and socio-economic activities related to agriculture, vegetation and sustenance of human and wild life (Jeyaseelan, 1999).  Flood disaster is not a recent phenomenon in the country, and its destructive tendencies are sometimes enormous. The coastal cities of Lagos, Port Harcourt, Calabar, Uyo, Warri among others have severally experienced incidences that have claimed many lives and properties worth millions of dollar.  Floods occur in Nigeria in three main forms: coastal flooding, river flooding and urban flooding (Folorunsho & Awosika, 2001). Coastal flooding occurs in the low-lying belt of mangrove and fresh water swamps along the coast (Folorunsho & Awosika, 2001). River flooding occurs in the flood plains of the larger rivers, while sudden, short-lived flash floods are associated with rivers in the inland areas where sudden heavy rains can change them into destructive torrents within a short period (Folorunsho & Awosika, 2001). Urban flooding on the other hand occurs in towns, on flat or low-lying terrain especially where little or no provision has been made for surface drainage, or where existing drainage has been blocked with municipal waste, refuses and eroded soil sediments (Folorunsho & Awosika, 2001). Flood is very difficult to deal with; its devastating effects on buildings can be categorized into three: structural, economic, and health related effects. Disasters Management Centre, college of Engineering, University of Wisconsin – Madison (1995) identified the following structural effects of flood on buildings:

1. Buildings washed away due to the impact of the water under high stream velocity. Such buildings are usually destroyed or dislocated beyond feasible reconstruction
2. Floatation of buildings caused by rising water. This occurs when light–weight houses are not securely anchored or braced.
3. Damage caused by inundation of buildings: A building may remain intact and stable on its foundation, while its material is gradually and severely damaged.
4. Undercutting of building: here the velocity of flood may scour and erode the building’s foundation or the earth under the foundation. This may result in total collapse of affected buildings.
5. Damage caused by debris: massive floating objects like trees and materials from other collapsed house may have impact significant enough to cause damage to the standing buildings.
6. Flood leads to the exposure of some parts of the buildings foundation and soaking up of base blocks. The weakening of the base blocks by the flood may result to collapse
7. When the building foundation is not well rammed i.e. well compacted, excessive flood will lead to softening of the foundation base.

In recent times, floods have destroyed property worth millions of naira in the different areas of Nigeria. Flooding in urban areas is seriously becoming an ecological menace in Nigeria as several coastal areas along the Atlantic ocean, surrounding cities and river valleys are affected by flooding on a yearly basis (Jeb & Aggarwal, 2008) Floods have caused land degradation in some other parts of the country (Abbas, 2008). The obvious reason for flooding especially in municipalities and coastal areas in Nigeria like Porthacourt lies in the wide distribution of low-lying coastal areas and river floodplains, and because these areas have fast become an long standing attractions for human settlement (Ologunorisa & Abawua, 2005). It is against this background that this study seek to examine the challenges of flooding in Portharcourt metropolis area with the view of developing measures that will help government and relief agencies in identification of flood prone areas and in planning against flooding events in the future.

1.2     STATEMENT OF THE PROBLEM

The challenges and evaluation of floods will need knowledge of flood risk areas in order to develop prevention as well as mitigation measures in stopping it. Flood hazard has cause a lot of worry in the country, causing the death of people, collapse of buildings, destruction of properties and agricultural produce. So it is essential to define the actual causes of flood in order to minimize and avoid the occurrence of such hazard in the future.

Flooding is experienced in most homes during the rainy season, On a typical flooded day in the city, roads are rendered  impassable to both human and vehicular traffic, properties are damaged as a result of loss of value, and occupants are forced to vacate their homes and occasionally lives are made difficult for some times as a result of the economic effects of the loss, (Nasiri et al.; 2016). Furthermore, the effect of flood on the residents of the city of Port Harcourt especially property owners is such that many lives are lost and property worth millions damaged (Oku et al.; 2011). According to (Elenwo, 2015), the losses recorded as a result of flooding in the city are enormous; the destructions are complete or partial impairment of values on properties, goods and services. Flooding in the Metropolis was exacerbated by erection of illegal structures or buildings on water channels and the impacts on the environment especially on developed property values was the focus of this study. The following research questions were generated and answered in the study.

1. What are the frequency and duration of flooding in Port Harcourt Metropolis?
2. What types of drainage systems are available in Port Harcourt Metropolis?
3. What are the conditions of the drainages in Port Harcourt Metropolis?
4. What are the rent charges on developed property affected by flooding in the Metropolis?
5. What are the structural/erosional damage arising from the flooding and flood depth?
6. To what extent do frequency of flooding influence the value of developed properties in the Metropolis?
7. To what extent did drainage conditions, location of houses and rainfall intensities affect flood frequency?

 1.3    AIM AND OBJECTIVES

1.3.1 Aim:

The aim of this study is to examine the challenges of flooding in Port Harcourt metropolis area.

1.3.2    Objectives

The aim was achieved by the following identified objectives as follows to;

1.  Examine the frequency and duration of flooding in Port Harcourt Metropolis
2. Examine the availability of drainage in Port Harcourt Metropolis
3. Investigate the conditions of drainages in Port Harcourt Metropolis
4. Examine the rent charges on developed properties affected by flooding in the Metropolis
5. What are the structural/erosional damage arising from the flooding and flood depth?
6. Determine the relationship between frequency of flooding and the value of developed properties in the metropolis?
7. Determine the relationship between drainage conditions, location of houses and rainfall intensities

 1.4    Need For Study

Nigerian government established the National Emergency Management Agency (NEMA) through (Act 12 as amended by Act 50 of 1999), to manage and respond to disaster related activities in Nigeria such as flooding, accidents caused natural and man-made sources (Adeoye, 2009). NEMA is saddled with the responsibility of formulating policies, assessment of natural and man-made disasters, provision of mitigating measures for disaster related activities, coordinating plans and programmes for offering relief items to victims of such disasters. It is essential that assessment of floods will require knowledge of flood risk areas in order to develop prevention as well as mitigation measures in controlling flooding in the country. The Rivers State government established State Emergency Management Agency (SEMA) to also taken care of hazard area across the state.

1.5     Scope And Limitation Of The Study        

The scope of this research project is limited to challenges of flooding in Port Harcourt Metropolis Area. The research work would only be limited to data’s collected through questionnaire distributed to residents within Kaduna metropolis.

1.6     Research Methodology

The research work is design base on relevant literature review carried out by academicians and professionals who have carried out series of researches on environmental disaster.

A convenient sampling method will be adopted; this is a sampling method according to (Teddlie & Yu, 2007) that involves choosing from a sample that is not only accessible, but respondent are willing to take part in the study.

Data for the research will be collected through a survey questionnaire administered to resident of Port Harcourt metropolis. Additional data will be gathered from SEMA and NEMA on the hazard caused by flooding in Port Harcourt metropolis, and all this will be analyzed using Relative Importance Index (RII).

 1.7    Background Of The Study Area

1.7.1 Location

Port Harcourt metropolis is located between Latitude 4045’N and Latitude 4055’N, and Longitude 6055’E and Longitude 7005’E. The city lies at the mouth of River Bonny in Rivers State. It is located at about 25km from the Atlantic Ocean and it is situated between the Dockyard creek/Bonny River and the Amadi creek. It lies at an average altitude of about 12m above mean sea level. Port Harcourt metropolis as our study area spans over two Local Government Areas (LGAs) viz; Port Harcourt and Obio/Akpor (Fig. 1) and was further divided into 13 Zones (Fig. 2).

 FIG.1: Map of Port Harcourt Metropolis

Source: Adapted from Google Earth

Source: Survey Department Port Harcourt, 1999

1.2.2 Climate The study area lies within the Koppen Tropical Rainy Af climatic zone of the Koppen classification (Koppen, 1936). Here, the average temperature for every month is above 180C and there is adequate moisture in virtually all the months. Port Harcourt metropolis experiences two seasons viz; dry and rainy seasons. Temperatures over Port Harcourt metropolis are constantly high with a mean maximum of about 340C and a mean minimum of about 210C. The highest temperatures are recorded between the months of April and October.

EFFECT OF COMPENSATION ON EMPLOYEE PERFORMANCE IN ICON INSURANCE COMPANY ABUJA

EFFECT OF COMPENSATION ON EMPLOYEE PERFORMANCE IN ICON INSURANCE COMPANY ABUJA

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CHAPTER ONE

INTRODUCTION

1. Background of the Study

Globalization requires a person to always keep up with times, starting from thoughts and knowledge to generate some useful new inventions to facilitate human to do some work, especially in a company. Increased business competition due to rapid technological and environmental changes makes a company must have strength competitiveness. The old paradigm of human resources places employees as an asset to company, but now there has been a growing new paradigm that employees are partners for a company. Human resource management has a very strategic position for company sustainability. This is because inadequate basic materials such as performance, motivation, and job satisfaction and productivity will cause disruption to company’s life sustainability.

The main driving factor for company good development is qualified human resources to encourage the company better. Compensation is one factor to affect job satisfaction of an employee. Sirait (2006) defines compensation as something received by an employee, either financial or non money reward for employee’s contribution to organization. Compensation management is a very important activity to make employees quite satisfied in their work.

Compensation is defined as the ability and responsibility of a company to contribute to its employees for their achievement of task and to appreciate their performance. Each organization should strive to improve employee satisfaction by providing a fair and competitive compensation program. High job satisfaction is expected to make employees become more loyal to organization; more motivated in work, feel happy in work, and ultimately will increase productivity.

Performance reflects how well employees meet the requirements of a job. Basically every individual has a different portion of work. It can be seen from individual’s skills and potential that directly affect on their performance. Mangkunegara (2005) explained performance as the work of quality and quantity achieved by an employee in performing their duties in accordance with responsibilities given. The work alone can be divided into two, namely hard work and smart work. Hard work includes people who always exert all their strength to work but the results are less satisfactory, while intelligent work is a work that uses a strategy to minimize the energy to do a job to get better outcome than hard work.

Lai (2011) shows a positive correlation between employee and job satisfaction based on payment, skill-based payments and performance-based payments. In addition, some demographic variables reveal a moderate effect on this relationship. The goal is to study the correlation between compensation system design and overall employee satisfaction. Nawab (2011) explains that employee compensation influenced organizational commitment and job satisfaction. Njoroge et al. (2015) shows a positive correlation between compensation and performance.

However, the performance of an organization is jointly determined by the employees’ capacity and their willingness to put in their best (William, 2016). Willingness and ability are important, since it implies that beyond a certain level, lack of ability cannot be compensated for willingness to high motivation and conversely lack of willingness cannot be compensated for employee’s ability to high level performance. Willingness and ability are necessary components of effective performance in every organization. It is on this note that this study seek to examine the effect of compensation on employee performance in Icon Insurance Company Abuja.

1. Statement of the Problem

The current era is highly competitive and organizations regardless of size, technology and market focus are facing employee retention challenges. Workers’ performance could be of low standard, in condition of inadequate compensation and motivation. Most employees leave there place of work, because of insufficient compensation. Some are willing to stay, because they know that what they benefit in terms of welfare packages (salaries, bonuses, free expense paid trips and some other tips) are not often available somewhere else. The major problem is how to compensate employees to achieving higher performance in Icon Insurance Company Abuja. Thus the need to increase productivity and efficiency in the work place or any organization has led to increasing academic interest in the area of compensation over the years. Scholars have been keenly  interested in knowing what factors are responsible for stimulating the will to work. Thus compensation has become an issue of concern for both scholars and practitioners of personnel management. Employees in both public and private sector organization are becoming increasingly aware that compensation increases productivity. Lack of proper motivation may result in losses which may eventually lead to low staff turnover, poor attitude towards work, low output level and low profitability. It is in the light of these that the study intends to examine the effect of compensation on employee performance in Icon Insurance Company Abuja.

1.3       Objectives of the study

The general objective of this study is to establish the effects of compensation on employee performance in Icon insurance Company Abuja.

1.3.1    Specific Objectives

1. To examine the effects of direct financial compensation on employee performance in Icon Insurance Abuja.
2. To assess the effects of indirect financial compensation on employee performance in Icon Insurance Company Abuja.
3. To establish the effects of non-financial compensation on employee performance in Icon Insurance Company Abuja.

1.4 Research Questions

What is the effect of direct compensation on employee performance in Icon Insurance Company Abuja?

What is the effect of indirect compensation on employee performance in Icon Insurance Company Abuja?  

What is the effect of non-financial compensation on employee performance in Icon Insurance Company Abuja?

1.5 Statement of Hypothesis

H0: Compensation has no significant effects on employee performance in Icon Insurance Company Abuja

H0: Compensation has  significant effects on employee performance in Icon Insurance Company Abuja

.5       Significant of the Study

The management of Icon Insurance Company

The findings of this study will assist Icon Insurance Company Abuja to formulate better and acceptable compensation strategies in order to enhance an affirmative outlook among employees and motivate them toward doing their work hence a better service quality and a high productivity.

Other Researchers

This study will be of significance to other researchers by assisting them have a better understanding of the subject under study for relevant resources in the future. This can be done through identification of gaps in knowledge and offer recommendations for further studies.

1.6       Scope of the study

The study will explore the effects of compensation on employee performance, a case study of Icon Insurance Company Abuja. The population targeted will be 150 employees that will include the Management Staff, Support Staff and the customers of the organization.

1.7       Limitation of the Study

Notwithstanding the areas covered by this research work, the study was greatly affected by certain constraints. The following limitations were inherent in the study.

Time Factor: This research was constrained by time limit. Time posed a threat to the successful coverage intended in the course of this study.

Cost Constraint: It is not unusual to state that the prevailing economic predicament posed a limitation to the researcher in procuring the whole material information and other relevant data needed to make this research a thorough work.

Confidentiality: The frequent rescheduling of interviews by management staff and their unwillingness to disclose some relevant information on staff motivation and training which they consider very confidential to the organization constitute one of the major limitations to this study.

1.9       Operational Definition of Terms

Compensation: Financial compensation refers to the act of providing a person with money or other things of economic value in exchange for their goods, labor, or to provide for the costs of injuries that they have incurred.

Incentive: Incentive is an act or promise for greater action; it means additional remuneration or benefit to an employee in recognition of achievement or better work. Incentives provide a spur or zeal in the employees for better performance. It is a natural thing that nobody acts without a purpose behind.

Performance: This indicates how well or satisfactory a person is fulfilling the requirement of his position on the basis of result achieved and his/her action on the job. The researcher looked at performance as the assessment of output in a giver task or work with a view of achieving result.

Productivity: Melli(2017) defined productivity as the measure of how well resources are brought together in an organization and utilized for accomplishing a set of result. The researcher sees productivity as reaching the highest level of performance with less expenditure of resources.

Job Satisfaction: According to Locke (2016) defined Job satisfaction as a situation in which a worker’s job fulfills what he values.

Intrinsic Motivation: According to Fritz Heider (2015) said intrinsic motivation comes from rewards inherent to a task or activity itself. Hertzberg (1959) “said” intrinsic motivation, develop internally and comes from, something the workers want to do.

Extrinsic Motivation: Fritz Heider(2011) said that this motivation comes from outside of the performers money is the most obvious example but coercion and threat of punishment are common extrinsic motivation.

Salaries / Wages: These are refers to as financial compensation for work done. Salaries are financial compensation for work done by standing professional or clerical personnel whose salaries are paid monthly.

Incentive and Fringe Benefits: These are defines as additional incomes that accrue to a worker in addition to his salaries and wages. They are used to induce people to contribute their efforts towards achieving organizational goals.

THE IMPACT OF PRIVATE DEVELOPERS ON FINANCING RESIDENTIAL PROPERTY DEVELOPMENT

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THE IMPACT OF PRIVATE DEVELOPERS ON FINANCING RESIDENTIAL PROPERTY DEVELOPMENT

CHAPTER ONE

1. INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Private sector investment in residential real estate development in Nigeria has been one of the responses to the limited success of governments with provision of public housing as Nigeria government has consistently not been able to satisfy the demand for housing, as almost 90% of the nation’s housing stock is provided by the formal and informal private sector (FGN, 2002; UN-HABITAT, 2006; Olatubara, 2007).

The private developers play significant role in financing residential property development and housing delivering at large.  Housing finance by its very nature is a capital intensive venture which if it is to be financed through personal financial resources will require slow and tedious accumulation of savings. However, since housing provides benefits over many years, long-term credit financing is a more logical option as it will spread the repayment burden. But this requires the availability of long-term funding, and for which must be institutional capacity, structure and mechanism that will allow a convenient and effective linkage between the savers/investors and the consumers of such funds.

The sourcing of funds for investment in real estate development poses a great deal of problem for the developer. This is largely due to economic instability and stringent measures imposed by most financial institutions. This is compounded by the fact that the interest rate structure has had an unfavourable impact on funding the development of real estate especially residential property. Since the financing of real estate development is a long term project, it has necessitated the high interest rate that is being charged on the funds provided for such development purposes. Hines (1995) revealed that six major real estate financing methods are used across the world namely; Joint Venture, Equity and Debt Financing, Sale-lease Back Financing, Advance Payment of key money and Sale of Securities and private developers who source for fund from their personal savings and other possible means for financing residential property development..

In Nigeria, housing is typically financed through a number of institutional sources: Budgetary appropriations, Commercial/Merchant Banks, Insurance Companies, State Housing Corporations and the Federal Mortgage Bank of Nigeria (FMBN): and now the newly established Mortgage Institutions all these constitute the formal institutions. Informal institutions such as thrift and credit societies, and money lenders who have contributed and are still contributing substantially to the finance residential property development also persists.

Traditionally, real estate development was based on equity funds. Equity funds wholly generated and owned by one and to which there is no attachment. The chief source of equity funds is savings and these savings arise out of that part of income of individual or corporate organization. Equity funds sources could be private or public.

Private developer equity may be drawn from individuals or corporate savings, that is, retained earnings, assets stripping, for cash or revenue reserves of companies over a period of time and accumulated savings of individual from employment and/or profits from business enterprises. Other sources of private developers equity funds apart from savings include funds from family sources, friends, Isusu system and thrift system.

Availability of decent and affordable housing has been inadequate in virtually all places and almost throughout history. This is more pronounced in developing countries where rapid rate of population growth and urbanization is unmatched by corresponding and commensurate change in social, economic and technological development. (Mabogunje, 1978). Thus, this phenomenal rise in population, spontaneous increase in the number and size of most Nigerian cities have in the past few decades led to acute shortage of decent and affordable dwelling units. The outcomes of this developmental process are diverse urban problems ranging from overcrowding, deplorable environment, poor living conditions, inadequate and poor infrastructural services, homelessness and other related problems (Federal Government of Nigeria, 2004; Olotuah and Ajenifujah, 2009; Jiboye, 2009).

In many countries the private sector plays an important role in financing residential property development. It constructs housing either for sale or rent for different income groups. The private sector should participate in the construction of housing for all categories of the population either for sale or rent, manufacturing and supply of building materials in the housing construction sector, infrastructure development for human settlements and encourage members of communities to improve their living environment through community participation in projects.

In Nigeria a number of efforts have been mustered to solve the housing problem; from the most discernable and debut of the Lagos Executive Development Board (LEDB) in 1928 till now, a satisfactory level have not been achieved. The achievement from the changing finance mechanisms, material and construction technology development, delivery mechanism etc over the years is minimal and therefore calls for deeper and wider thought towards means that is all-embracing, meets other societal needs yet accelerating the enormous task of housing the nation’s teeming population (Bayode, 2008).

Residential property development is an issue that only touches on the life of an individual, but also has the potential to contribute to national development (Agbola, 1998). In Nigeria, housing is a space within which a generation of families expresses its existence and preserves the history and identities of lineage. Families discover themselves according to their lifestyle and dictates of the cultural values of the society to which they belong. The family residential housing therefore is a symbol of social identity and community recognition.

The successful completion of any kind of development largely depends on the availability and affordability of the essential factors requisite for such property development (land, labour, building materials and finance). Finance being the most significant determines the availability and quality of other factors, as it is required to acquire land, reward labour and buy building materials. Thus, this study seeks to examine the availability of finance for the purpose of residential property development in Nasarawa town, having due regards to its affordability. In view of the above therefore, efforts shall be made to assess the impact of impact of private developers on financing residential property development in Nigeria.

1.2       statement of the problem

Over the years, the government had been the major player in the area of housing delivery in Nigeria, by providing direct finance for previous housing schemes. This was embedded in the housing policy of past administrations but today, the dwindling nature of revenue accruing to the government, coupled with gross mismanagement and misappropriation of public funds and revenue has prohibited the ability of the government to continue to play her role as before (Nubi, 2000). The problem of financing residential property development has become an everyday discussion in all quarters of the public and private services of the developing countries of Africa. It has become increasingly glaring that most of the urban population live in dehumanizing housing environment while those that have access to average housing do so at abnormal cost. Furthermore, private developers as a compassionate housing providers performance need to be compare whether they are performing to the much expectation of residents in their need of housing supply. It is on this premise that the research seeks to evaluate the impact of private developers on financing residential property development.

1.3       Aim and Objectives of the Study

The aim of the study is to assess the impact of private developers on financing residential property development in Nigeria.

Objectives:

The objectives are:

1. To assess the various sources of finance available for residential property development.
2. To assess how private estate developers contribute to financing of residential property development
3. To examine the factors militating against the availability of funds for residential property development.
4. To seek ways of enhancing the present level of housing financing for residential property development

1.4       Research questions

1. What are the various sources of finance available for residential property development?
2. To what extent do private developers contribute to financing of residential property development?
3. Examine the factors militating against the availability of funds for residential property development?
4. What are the possible ways of enhancing the present level of housing financing for residential property development?

1.5       Significance of the Study

A study of this nature will be beneficial to a wide range of stakeholders in Nigeria. Recommendations made in this study will enable the government take a serious look at the current Housing policy in Nigerian, its effectiveness, alternative strategy and alternative sources and the need for re-engineering.

Also, corporate bodies and developers can use the information derived herein to further their work on source of finance for residential property development. Furthermore, this study is expected to give rise to further studies which will enhance knowledge in areas of the sources of finance for residential property development.

1.6       Scope and Limitation of the Study

In terms of scope, the study will evaluate the impact of private developers on financing residential property development with particular reference to CITEC Properties Limited Abuja. Due to limited time and resources the study not will cover the contribution of other private estate developers in the study area. The study will examine in details the dominant issues of private estate development as an option for providing finance for residential property development in Abuja.

Limitation

In the course of carrying out this research work, several challenges were encountered. Some of these challenges are:

1. Administering and gathering of questionnaires in real estate development firms was not an easy feat.
   1. The entire project was very capital intensive, gathering information on sources of project financing.
   1. Organizations are not ready and willing to review the source or sources of their project financing.

1.7       Operational Definition of Terms

Private Developers: Private developers are property developers within the private sector. They acquire buildings or land in order to construct or refurbish building projects on the site. Private developers aim to generate a profit, as opposed to the government which aims to provide buildings for social and welfare reason.

Finance: According toInvestopadia online dictionary Finance is the science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities.

Estate: Udechukwu (2006) defined estate as “A legal entity denoting the character and quality of right that an individual or individuals possessed on a property.

Housing Estate: In the word of Essien G.A (2012) in his Lecture Note “An Approach to Property Development II (Vol. 3)”. “Is an area of land on which many houses are built either by private enterprise or by a public authority”.

Development: Is the process of generating latent values in land or creating benefits there from by incurring on it costs in the form of labour, capital or management skill (Umeh, 1983).

Residential Properties: Oxford advanced learners dictionary defined residential properties as properties suitable for living in, consisting of houses rather than factories, or offices.

1.8       Historical Background Of The Study Area

CITEC Property Limited Abuja Incorporated as a limited liability company in the year 2001, Citec Properties Limited Abuja began work at the Mbora district of Abuja in 2001 having secured the understanding and approval of the Federal Government to deliver houses for low income earners at its Mount Pleasant Estate on about 230 hectares of land provided by the Federal Government. Today, the estate boasts of the best infrastructure by any estate developer in the FCT.

The mission of CITEC Properties Limited is to provide top quality housing for Nigerians in life enhancing environments using experienced and qualified personnel working with the best technology available.

The core values of CITEC Properties Limited includes

• Professionalism
• Integrity
• Excellence
• Team Work
• Innovation

Mount Pleasant Estate where Citec targets about 3000 housing units features underground central sewage system, tarred internal roads with pedestrian walkways, recreation areas, school, shopping mall, worship centres and other modern facilities that make it unnecessary for residents to look outside the estate for further services.

With Mount Pleasant Estate, Citec has redefined standards and offered The Federal Capital Territory residents a wide range of top quality houses with exquisite finishing in a homely environment. Before embarking on the Mount Pleasant Estate project, Citec, in partnership with the Federal Housing Authority had built over 300 housing units of various types at its Citec Villas in Gwarimpa II Estate which has become the reference point in the Federal Capital.

CITEC Nigeria Limited has mandate under the Partnership with the Federal Housing Authority to complete 308 housing units of different house types. The partnership agreement was signed in the month of February, 2001 and mobilization to site began in the month of June 2001. Among the conditions agreed upon was a 12-month completion period. Field surveys show that only 65% of total housing units completed were within 2001 to 2004 — a period of four years. And the remaining, 35% completed between 2004 and 2006, another additional two (2) years.

The project was financed by commercial banks with very high interest rate of 32% between 2001 and 2004 which later rose to 36% in 2005. The 308 units were however completed in 2006, with project duration of six (6) years instead of 12 months as planned. However based on the detailed partnership agreement signed by the two partners on a 60:40 percent profit sharing between CITEC and FHA respectively, the expected operational profit per unit of total housing units are projected based on the assumptions that the housing units will be completed in good time and sold. There are four housing categories in Gwarimpa II partnership scheme. All the house types do not reflect the status of low and middle-income earners, but strictly for high income earners.

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THE IMPACT OF ECONOMIC INSTABILITY ON REAL ESTATE FINANCE IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND TO THE STUDY

The stability of the financial system enables business firms and household to store value and transfer a financial asset without fear of loss. This contributes to economic growth and development in the real estate (Amoo et al., 2019; Patel, 2018). The rising economic instability in Nigeria is as a result of conflict and violence, weak institutions, slower growth rate, non-inclusive economic growth, widespread corruption and the global pandemic (COVID – 19) which have ravaged the world and crippled world economic, financial and health system (World Bank, 2019) have in a great deal affected real east finance in Nigeria and the world at large.

The current economic instability has been interpreted in many ways, chief of which is that it signals the end of capitalism or free market economic doctrine as exemplified by the American economic system. It is said to reincarnate the world economic depression of the 1930s which saw huge loss of wealth in both the money and capital markets around the capitalist world and led to actual and attempted suicide by many investors. Global economic instability describes the growing economic, political, technological, and cultural linkages that connect individuals, communities, businesses, governments and countries around the world and the negative impacts it carries with it as felt in the economies of different states and countries (Ajanlekoko, 2001).

The Nigerian economy faces the rippling effects of the economic instability or crises resulting to breakdown and decline in economic vigor. The effects find expression in downsizing, mass unemployment, and crashes in the money market and lack of finance for real estate finance and investment (Zubairu, 2001).  According to Ebie (2005), the Nigerian situation has been tagged feeble due to the negative effects the economic instability has had on the country. Every industry has had its fair share of the troubles and companies are licking their sores with resultant effects on the masses.

The major issue in real estate development and investment is finance. There is no iota of doubt that funding is an important factor in real estate development and investment. The complexity and to a large extent, its capital intensive nature demands proper and adequate funding to make it realizable. The terms and availability of the needed funds determine the trend of estate operation. Availability and easy accessibility of estate finance in sufficient quantity will definitely accelerate all forms of property development. Estate financing is concerned with the production of finance for building houses and office complexes which are basic necessities in a growing economy like Nigeria. The benefits to be derived from a rise in estate financing in Nigeria are many and include; Increased rural and urban houses for the teaming Nigerian population, the construction of industrial estate for the localization of industries and commerce and an increase in employment for those in the construction industry.

The economic instability which affects the sourcing of funds for investment in real estate development poses a great deal of problem for the developer. This is largely due to economic instability and stringent measures imposed by most financial institutions. This is compounded by the fact that the interest rate structure has had an unfavourable impact on funding the development of real estate. Since the financing of real estate development is a long term project, it has necessitated the high interest rate that is being charged on the funds provided for such development purposes. Hines (1995) revealed that six major real estate financing methods are used across the world namely; Joint Venture, Equity and Debt Financing, Sale-lease Back Financing, Advance Payment of key money and Sale of Securities.

Traditional means of financing real estate is either by Equity funding (Equity funds), Loan Capital (Debt Funds) or a combination of both. The well established and tested methods of financing real estate are as follows; Equity Capital, Loan Capital, Mortgage Funding,  Debenture  and Contractor Financing (Omuojine, 1993).  Traditionally, real estate development was based on equity funds. Equity funds wholly generated and owned by one and to which there is no attachment. The chief source of equity funds is savings and these savings arise out of that part of income of individual or corporate organization. Equity funds sources could be private or public. Private equity may be drawn from individuals or corporate savings, that is, retained earnings, assets stripping, for cash or revenue reserves of companies over a period of time and accumulated savings of individual from employment and/or profits from business enterprises. Other sources of private equity funds apart from savings include funds from family sources, friends, Isusu system and thrift system. Public equity on the other hand is derived from invitation extended to the public to subscribe to the equities/ownership of a real estate company set up for that purpose. Some examples of this are capital issues, equity warrant issues, securitization and unitization all these sources a finance for real estate financing are negatively affected by economic instability in Nigeria. It is against this background that this study seek to  examine the impact of economic instability on real estate finance in Nigeria.

1.2       Statement of the Problems

Real estate practice has continued to express divergent views on the impact of the current economic instability in Nigeria on the nation’s real estate market. While some operators are complaining of low demand, over supply, falling prices and many unsold/unoccupied houses with no buyers or tenants, others see the economic instability in the property market as opportunities for brave investors with expectation of high returns when the country climbs out of instability. Most of the houses and estates in high-brow areas like Asokoro, Gwarinpa, Maitama, Wuse II, Utako, Katampe districts are unoccupied as a result of the high cost of renting or leasing. Houses and estates in Gaduwa, Apo, Dei-Dei, Gwarimpa, Lugbe, Kubwa, Gudu, Life Camp, are also in similar situation of no buyers or renters and lack of finance to develop new ones. But in spite of the glut in the real estate market, property values have stagnated and in most cases have increased tremendously in the low and medium income neighbourhoods in Abuja.

The problem of real estate finance has become an everyday discussion in all quarters of the public and private services of the developing countries of Africa. It has become increasingly glaring that most of the urban population live in dehumanizing housing environment while those that have access to average housing do so at abnormal cost as a result of the current economic instability. According to Onibokun (1986), Nubi (1991), rent in major cities of Nigeria is about 60% of an average workers disposable income. According to Abiodun (1999), National Housing Fund collected about billion naira from the Mandatory Saving Scheme. Out of N300 million loan approved by FMBN, only N100million was advanced thus posing a great treat to real estate finance. This have given rise to the need to examine the effect of economic instability on real estate finance in Nigeria.

1.3       Aim and Objectives of the Study

The aim of the study is to examine the impact of economic instability on real estate finance in Nigeria with particular reference to Abuja.

Objectives:

The objectives are:

1. To assess the current state of economic situation in Nigeria
2. To assess the various sources of finance available for estate development.
3. To assess how private estate developers obtain mortgage facility from financial institutions.
4. To examine the factors militating against the availability of finance for real estate development in Nigeria
5. To seek ways of enhancing the present level of real estate finance

1.4       Research Questions

1. What is the current state of situation in Nigeria
2. What are the various sources of finance available for estate development?
3. How does private estate developers obtain mortgage facility from financial institutions.
4. What are the factors militating against the availability of real estate finance?
5. What are the ways of enhancing the present level of real estate finance

1.5       Significance of the Study

A study of this nature will be beneficial to a wide range of stakeholders in Nigeria. Recommendations made in this study will enable the government take a serious look at the current economic situation and proffer effectiveness and alternative strategy to mae available finance for real estate development

It is hoped that this study would help estate developers to appraise the impact of economic instability on real estate finance while investing in real estate development.   The research will be of great benefit to the local government, investors in the real estate sector such as property developers, end users and government parastatals on the situation of economic instability on real estate development in the study area. This would enable them to know the essence of instability in real estate practice.

Also, corporate bodies and developers can use the information derived herein to improve their resilient in the face of this current economic instability in Nigeria and its effect on real estate finance. Furthermore, this study is expected to give rise to further studies which will enhance knowledge in areas of the impact of economic instability on real estate finance in Nigeria.

1.6       Scope and Limitation of the Study

This is limited to the study of the impact of economic instability on real estate finance in Nigeria with focus on both the effect of economic instability on traditional method of financing and the modern method of financing real estate development.

Limitation

In the course of carrying out this research work, several challenges were encountered. Some of these challenges are:

1. Administering and gathering of questionnaires in real estate development firms was not an easy feat.
   1. The entire project was very capital intensive, gathering information on sources of project financing.
   1. Organizations are not ready and willing to review the source or sources of their project financing.

1.7       Operational Definition of Terms

Finance: According toInvestopadia online dictionary Finance is the science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities.

Estate: Udechukwu (2006) defined estate as “A legal entity denoting the character and quality of right that an individual or individuals possessed on a property.

Real Estate: Is “property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general.

Recessed Economy: An economy is said to be recessed when it has faced a negative economic growth for two consecutive quarters

Housing Estate: In the word of Essien G.A (2012) in his Lecture Note “An Approach to Property Development II (Vol. 3)”. “Is an area of land on which many houses are built either by private enterprise or by a public authority”.

Development: Is the process of generating latent values in land or creating benefits there from by incurring on it costs in the form of labour, capital or management skill (Umeh, 1983).

Public Developer: Nathaniel (1979) cited that public developer deal directly  with government involvement in the provision of housing, public properties (Estate) are therefore owned, controlled and managed by Federal, State, Local Government and other public bodies which are set up and functioned under state and their aims is usually based on political, social and economic ground.

1.8       Historical Background Of The Study Area

The name “Abuja” was derived from Abu Ja, a brother to Muhammadu Makau, the last Hausa ruler of Zaria. Makau had left Zaria after being defeated by the Fulani and settled in the area now known as Abuja. In 1825 his brother Abu Ja succeeded him as the 62^nd King of Zaria.

The full name of Abu Ja was Abubakar (shortened to “Abu”) and the name Ja was given to him because he was light in complexion (in Hausa “Ja” means red or fair). He became known as “Abu Ja”, “Abu the fair one” (other sources claim that the name “Ja” was derived from the last name of his father which was “Jatau”). Abu Ja then built a new capital for his Kingdom and called it “Abuja.”

Abuja was mainly built in the 1980s and it officially became Nigeria’s capital on December 12, 1991, replacing Lagos. The Abuja Federal Capital Territory, while smaller than other states within Nigeria, is two and half times the size of Lagos city, the former capital. This territory was formed with the express purpose of supporting Abuja city, encircling it within a womb of nature. Abuja has an Area size of 713km²

The site for the new capital was chosen because of its central location (viewed as neutral both ethnically and religiously, where culture and religion meet), easy accessibility, pleasant climate, low population density, and the availability of land for future expansion.

Not only was a city designed, but an entire environment. Part of the provisions of the Master Plan is the development of adequate recreational and Green areas within the city. Abuja is surrounded by abundant hills, highlands, savanna grassland, and tropical rain forests.

The master plan of Abuja ad the Federal Capital Territory (FCT) was developed by international planning associates (IPA), a consortium made up of three American firms: Planning Research Corporation; Wallace, Roberts and Todd; and Archisystems, a division of the Hughes Organization.

The master plan included a regional site selection ad master plan for the new and detailed design of the Central Area, which accommodates the national government center, cultural institutions, and the Central Business districts.

Outside The central Area, residential mini-cities with populations of 150,000 to 250,000 are organized around local business and the employment centres.

More detailed design of the central areas of the capital, particularly it monumental core, was accomplished by Kenzo Tange, a renowned Japanese architect, along with his team of city planners at Kenzo Tange and Urtec Company.

Places of Interest in Abuja

Abuja National Mosque: The national mosque of the country declared a national monument belonging to all Nigerians. Its outstanding golden dome and minarets dominate Abuja’s skyline.

National Christian Centre: The symbol of unity of Christendom in Nigeria. The centre’s magnificent edifice was designed by an Italian firm.

Millennium Park: Abuja’s most popular and largest green area is the Millennium Park. Designed by world renowned architect Manfredi Nicoletti, it was officially inaugurated by Queen Elizabeth II in 2003.

National Stadium: Built in 2003 and this ultra-modern complex has a seated capacity of 60,000. It is used by the Nigerian National Football Team.

The problems associated with the capital being in Lagos, such as population pressures, political and ethnic divisions, led to the search for a new capital in 1976. Abuja was selected from among 33 possible sites. Physically located in the centre of the country and viewed as neutral both ethnically and religiously, it is where culture and religion meet.

The criteria used for selection included: centrality, healthy, climate, land availability and use, water supply, multi-access possibilities, security, existence of resources, drainage, good soil, physical planning convenience and ethic accord.

The Emir of Abuja at the time, Alhaji Suleiman Barau, was asked to meet with his Emirate Council to approve contributing four of the five districts to Abuja to become the new capital. The council was divided as some districts considered it too much of a sacrifice; but at the end, they approved the request from the Federal Government.

Thus, the Abuja in Niger State contributed 80% of the land of the territory, Plateau State (now Nassarawa State) contributed 16% of the South east territory and Kwara State (Now Kogi State) contributed about 4% of the south-west territory.

Abuja Districts

According to the 1979 master plan, Abuja’s territory has to be developed in four phases on an area of about 250 square kilometres, and each phase has to be further sub-divided into districts.

The phase 1 development has almost been completed and includes the Central Business District (the three Arms Zone Presidency, National Assembly and Supreme Court), the Maitama, Wuse, Garki and Asokoro, residential and business districts.

There are also 5 districts in Phase 2, and some of them have works at various stages of completion. They are Kado, Durumi, Gudu, Utako (which infrastructural facilities have been completed) and Jabi. Phase 3 districts are Mabuchi, Katampe, Wuye and Gwarimpa. There are also 5 suburban districts, which are Nyanya, Karu, Gwagwalada, Kubwa, and Jikwoyi. Along the Airport Road there are clusters of satellite settlements, namely Lugbe, Chika, Kuchigworo and Pyakassa.

Other satellite settlements are Idu (the main industrial zone), Mpape, Karimu, Gwagwa, Dei-Dei (hosting the international Livestock market and also International Building materials market).

Construction service companies and enterprises continues at a fast pace in Abuja and new places open weekly, Phase 2, currently under development, involves the integration of the surrounding Katampe, Mabushi, Utako, Wuye, Durumi, Gudu, Jabbi, Duste and Gaduwa areas into the city. Phase 3 and 4 are also under development, however, there are works at various stages of implementation in Karmo, and Idu districts (Phase 3), and the Gwarimpa Districts, where many of the construction companies “Life Camps” are located, has already been developed.

 

Weather and Climate

The history of Abuja is not complete without talking about it’s wonderful weather and climate. The FCT experiences three weather conditions annually. This includes a warm, humid rainy season and a blistering dry season.

In between the two, there is a brief interlude of harmattan occasioned by the northeast trade wind, with the main feature of dust haze, intensified coldness and dryness.

The rainy season begins from April and ends in October, when daytime temperatures reach 28 °C (82.4 °F) to 30 °C (86.0 °F) and nighttime lows hover around 22 °C (71.6 °F) to 23 °C (73.4 °F). In the dry season, daytime temperatures can soar as high as 40 °C (104.0 °F) and nighttime temperatures can dip to 12 °C (53.6 °F).

Even the chilliest nights can be followed by daytime temperatures well above 30 °C (86.0 °F). The high altitudes and undulating terrain of the FCT act as a moderating influence on the weather of the territory.

Rainfall in the FCT reflects the territory’s location on the windward side of the Jos Plateau and the zone of rising air masses. The annual total rainfall is in the range of 1100 mm to 1600 mm.