The persistent cash crunch occasioned by the Central Bank of Nigeria’s policy on the naira redesign and cash withdrawal limit has abruptly stopped economic and service delivery in the real estate environment, Sunday PUNCH reports.
This was as property developers, who spoke to our correspondent, insisted that the inability to pay artisans, provide building materials for construction and increased cost of production had halted any form of revenue generation in the industry.
They further predicted that this might affect the sector’s gross domestic product contribution and lead to an increase in housing deficits.
The Central Bank of Nigeria in October 2022 announced a new naira policy that will see the N200, N500, and N1000 notes redesigned and replaced with new ones. The old notes were expected to cease to be legal tender on January 31, 2023.
Consequently, for many real estate businesses, it goes without saying that the experience has been harrowing, disconcerting and deeply painful.
Speaking with Sunday PUNCH, an independent realtor, Charles Chiemezie, argued that poor sales occasioned by the naira scarcity would echo like ripples across a pond, which would negatively impact the ability of businesses to generate income.
He explained that this might affect the sector’s Gross Domestic Product contribution.
On his part, the co-founder of Estek Cosmopolitan, Bernard Okonji, said the naira scarcity had greatly increased the cost of production, making it difficult to start or complete housing projects.
Narrating personal experiences, he noted that dealing with artisans had become costly as they demand charges for transfer payment or down tools for the day.
He said, “This is a development that nobody saw coming. It has happened for the first time and everybody is just trying to manoeuvre their way. The cash crunch made the pricing of things move differently. For example, artisans don’t have a bank account, they feed from hand-to-mouth and if you want to transfer their daily pay, they will ask you for cash payment instead. If they agree to transfer, you would have to add charges, increasing the production costs. Dealing with artisans has become really expensive.
“Recently, we had a project where we had to deal with carpentry and on getting to the market, they declined transfer, demanding for cash payment. Already, paying these charges is eating up profits.”
At a residential development ongoing in Jabi, the site engineer, who spoke on the condition of anonymity, told our correspondent that labourers were now jobless, adding that the level of production had reduced drastically.
“For instance, the labourers who were supposed to work on-site today left because they wanted cash payment and they don’t have a bank account. We had to increase the workload on those who have an account so we can achieve something today.
“Currently, the naira scarcity has affected our productivity; work on-site now is not full scale. Some of them even think we are being wicked because they don’t believe that we don’t have the cash to pay them. It is sad,” he said.