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Who is to blame for real estate scams in Lagos?

Housing is one of the basic needs of all humans. Over the years, the surge in population of the nation’s commercial centre,



Real Estate in Lagos

Housing is one of the basic needs of all humans. Over the years, the surge in population of the nation’s commercial centre, Lagos, has assumed exponential proportions. Unfortunately, the provision of urban infrastructure and housing to meet this growing demand is not at commensurate level.

In the real estate business chain, there exists a group of ‘professionals’ that play a big role and due to high demand for their services, many Lagosians have fallen victims of their sharp practices.

Effiong had just moved over to Lagos from Akwa-Ibom, a state in the southern region of the country, and like several young school-leavers seeking the proverbial greener pasture, he was faced with no other option than to stay with a friend who already had an apartment around Iyana Ipaja, a suburb of Lagos.

After a few months, he felt the need to get his own apartment, even if it meant getting a single room where he could rest his head after a stressful day at work. So, he started saving a part of his monthly meager salary. Effiong later approached a roadside house agent who promised to get him a single room apartment in Bariga, a densely populated area in Lagos. After an inspection visit to a one-bedroom apartment and being satisfied with the relatively decent environment, Effiong paid for one year’s rent and was eager to move into his new apartment.

On the day he was to move in, Effiong received the biggest shock of his life. The room already had a new occupant! A visibly angry Effiong approached his house agent to know what had happened. The agent apologised to him and promised to get him an even better apartment. Effiong thereafter requested a refund of his rent, which the agent readily agreed to, but pleaded with him for some time. It’s already six months and Effiong is yet to get either a room or the refund of his money.

Effiong’s experience is just one out of several scams pervasive in the real estate sector — from the small players in the business value chain (roadside agents and caretakers) to the big players, such as private property developers and home builders in the industry.

Femi recalled how his room was burgled few days after he moved into his apartment. All efforts to get a refund from the landlord and his agent earned him a serious beating by touts allegedly sponsored by the landlord who had vowed never to refund his money to him.

Lagosians recently woke up to the news that a cross-section of homeowners at Horizon Premier-1 Estate in Lekki, an upscale part of Lagos, have dragged the Management of Lekki Gardens Estate Limited, and its Managing Director, Richard Nyong, to a Lagos High Court over the alleged distortion of the estate layout to build shops in the space originally meant for a children’s playground, green area and recreation facilities within the estate.

The homeowners, in a suit filed at a Lagos High Court, are demanding an immediate reversal to the original estate layout, which suffered over two years of delay in delivery— a default for which the subscribers are also demanding compensation.

Also, residents in its existing Lekki Gardens estate have complained bitterly about the atrocious state of facilities, and complete lack of maintenance. Some also complained about poor workmanship on some of the buildings, such as cracks on the wall, while some others complained about disjointed pipes.

 Scams in getting access to land and permits

The World Bank, in its Ease of Doing Business Series in Nigeria, ranked Lagos State as the worst place to secure construction permits in the country. The fear of falling into wrong hands and getting fake title documents has forced several people and investors hoping to own a house or build a factory in Lagos, to seek alternative locations such as neighboring Ogun State, to avoid falling into the hands of scammers and street urchins, popularly called Omo-Onile.

The increase in the number of reported cases of sharp practices in the real estate industry has waned investors’ confidence in the sector and out of curiosity, Nairametrics seeks to find out where the fault lies.

Blame Nigerian’s love for cheap things and greedy developers

It is not uncommon to see giant billboards on major highways across Lagos and flyers advertising housing units and lands at mouth-watering discounts and unbelievably low prices, all with the aim to attract buyers.

In an interview with Nairametrics,  Mr. Nnamdi Ijei, Chief Executive Officer of Highrachy Investment & Technology Limited, noted that Nigerians looking to buy property must always carefully seek and patronise professionals in the industry.


“No professional that has his name to protect will involve in any shenanigans or shady deals that will tarnish his image.”

He added that developers should always put into consideration the quality of building materials, the convenience of the structure for homeowners, and its impact on the environment when designing and planning their building.

According to Dr. Opaleye, an occupant in one of the newly built estates in the Lekki area of Lagos, developers are very greedy as most of them fail to deliver on time as promised. More worrisome is the fact that many of them use substandard building materials and even poor workmanship which are often covered with flashy paint coatings and aesthetics to conceal the defects.

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“If you visit my house, you will see the poor job done. They don’t even deliver to the initial specification. Some of them will promise you a spacious compound and sporting facilities in the housing units but years after the completion of the house they are yet to construct any sporting facilities in my estate.”

Navigating through the mine field of dodgy real estate agents

Ms. Ellen Abada is an Executive Marketer at a real estate firm and she believes that most people usually ignore the red flags at the initial stage. She noted that real estate is a huge investment and anyone putting down his/her money must have a proper knowledge on how the industry works.

She, however, advised that anyone who wants to rent a room must request to be taken to the landlord of the building to avoid stories that touch, noting that some tenants even sign agreements without considering the future implications of such agreements.

A lawyer, Barr. Makanjuola noted that the Lagos State Tenancy Law 2011 was introduced to regulate the relationship and in particular, the rights and obligations of tenants and landlords under Tenancy Agreements, and the process for the recovery of premises and other related purposes.

He further advocated for proper education before signing any agreement with private developers and advised tenants to approach the Rents Tribunal in the state which is an alternative dispute resolution mechanism to resolve their rents issue.

Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via [email protected]



  1. Temitayo Fasipe

    December 5, 2018 at 6:54 am

    Hello Ugodre, your write up is indeed insightful but is inconclusive since the opinion of the government recognized real estate professional body was not sampled. The body is Nigeria Institution of Estate Surveyors and Valuer (NIESV), a search on google will provide details of numerous practitioners in Lagos and Nigeria as whole.

    Thank you.

    Esv Temitayo Fasipe

    • Fikayo Owoeye

      December 5, 2018 at 11:36 am

      Thank you for reaching out. Firstly, this article was not written by Ugodre. One of the respondents is an Estate Surveyor and Valuer and his opinion was sought and conveyed in the article.

  2. Anonymous

    December 5, 2018 at 5:17 pm

    Good article

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CBN “Naira 4 Dollar Scheme” Explained

What the CBN’s Naira 4 Dollar scheme means for your money.




In what appears to be an attempt to incentivize dollar remittances by all means possible, the Central Bank of Nigeria (CBN) released a circular to Deposit Money Banks (DMBs), International Money Transfer Operators (IMTO), and the General Public, advising that remittances paid into a bank account will attract an additional credit alert for every USD$1 received!

Yes, you read that correctly. The CBN will facilitate a special additional credit alert of N5 for every USD$1 received. In other words,

  • if someone sends you $10,000, you get an additional special credit alert for N50,000.
  • If someone sends you $100,000, you get an additional special credit alert for N500,000.

Who is eligible?

To be eligible, the diaspora remittances need to be processed and received from one of the registered IMTOs and funds received into a Bank account operated by the DMBs. (So, if you are receiving funds via Crypto sorry you are not eligible).

Additionally, the circular says this “incentive runs from Monday 8th March 2021 to Saturday 8th May 2021″. So, if you have plans to receive dollars, you can plan accordingly.

The circular is not clear how exactly the commercial banks will know which account to pay the extra special credits into. Although, that may be a question diaspora funds recipients will need to ask their DMB accounts officers to clarify for them.

How will this be funded?

The circular notes that the “CBN shall through commercial banks, pay to recipients the N5 incentive for every USD$1”. In other words, it is the CBN funding the cost of this special extra credit.

  • One would argue that given the costs of alternative incentives to attract dollars such as the special OMO window for FPI, this may be a cheaper alternative for the CBN.
  • But we will need to see the volume of expected remittance to be certain of that. Nigeria attracts about $5billion per quarter in remittances and only trails oil in terms of foreign earnings.

Why this matter to Nigerians?

Following the collapse of US Dollar inflows into the country, the CBN initially tried to balance its current account deficits and avoid an official devaluation by tackling FOREX demand (Think ban of 41 items, etc).

Finally, this short-term Naira-4-Dollar scheme will not be called an official Naira Devaluation. But a question is what do we call the new short-term price of N412.50 + N5.00? Maybe we can call it Naira Modulation.


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Nigerian Breweries leveraging, but stacking cash through rising input costs

The marathon continues for Nigerian Breweries with its 2020 financials.



Humanity might need more booze to survive the increasingly daunting intricacies of life, but Nigerian Breweries 2020 financial statement is proof that even the best can get caught up in the reality of changing business lifecycles.

Nigerian Breweries Plc had floored the market providing both alcoholic and non-alcoholic premium quality beverages across the nation. But with brands like Star lager beer launched as far back as 1949, Gulder lager beer launched in 1970, and even the family-friendly Maltina introduced as far back as 1976, it is only natural that both the old and new generation competition gives them a run for their market share.

Much like other old money companies, Nigerian Breweries has done its bit to remain relevant in the industry from creating new variants of existing favoured brands to paying dividends consistently annually for the past few years. Yet within the same period, the company’s financial statements have been a testament to its streamlined market share and reducing profits. The marathon continues with its 2020 financials. The industry giant may as well be setting itself up for a debt quagmire peradventure its projections do not match the true reality of events.

READ: How COVID-19 has changed Nigeria’s consumer goods & industrial markets –KPMG

2020 financials: A tale of higher costs & larger debts

2020’s unfavourable financial/ business environment led to the increase in the prices of raw materials and disruptions in logistics for many Nigerian-domiciled businesses including Nigerian Breweries. Raw materials and consumables witnessed a 17% increase despite the marginal growth in revenue.

While the group’s 2020 results revealed a 4.35% increase in revenue from N323 billion in the prior year to around N337 billion, these gains were curtailed by a higher-than-par increase in cost of sales which had risen by 13.9%, from the N191.8 billion expended in 2019 to N218.4 billion as its 2020 financials reveal and interest rates going way up.

READ: Flour Mills and its diverse challenges

The company’s lower operating expenses were not enough to salvage the disruption caused by the raging interest expense following increased charges paid on bank loans and overdraft facilities as well as the significant increase in overall debt. Between 2019 and 2020 alone, long term loans and borrowings increased by 974% from N4.8 billion to as much as N51.8 billion. Even trade and other long term payables increased by 35%.

In its financials, the company noted that it has revolving credit facilities with five Nigerian banks to finance its working capital. The approved limit of the loan with each of the banks range from ₦6 billion to ₦15 billion (total of ₦66 billion) and each of the agreements had been signed in 2016 with a tenor of five years. The Company had also obtained Capital and Working capital finance from the BoI in 2019.

READ: Manufacturing sector in Nigeria and the reality of a “new normal”

It is no news that the company is involved in diversified lease arrangements. Following reclassifications made in 2019 to some of its lease assets, the 2020 asset base also witnessed significant increase in Right of Use Assets which increased by 288%% from N11.1 billion to N42.9 billion. Yet, the fact that in one year, interest expense on Lease Liabilities rose from N19.7 million in 2019 and to a whopping N4.171 billion shows that the company is taking way more debt than its books require.

But what’s it using all the cash for?

Beyond rising material costs, borrowing costs have been huge and the annual interest payment by virtue of these loans make the possibility of higher profits for the company a mirage. That said, the overall increase in total liabilities might not have been such a bad idea if the funds were being used to increase revenue and profits. But having a huge chunk of all that money in cash creates a different kind of challenge. Cash and bank values in its statement of financial position significantly increased by 377% from N6.4 billion in 2019 to N30.4 billion in 2020.

Is the cash being held to mitigate possible challenges of the volatile economy or are they being used to pay dividends? Even at a share price of N52 per share, the company’s price-to-book value sits at 2.5816, testament of its dire overvaluation. Consequently, there is an ardent need for the company to come up with newer ways to attract the wider market and keep its book in the green with a little less external funding.

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