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The sale of Federal Government Houses in Lagos has generated a lot of controversies ever since the commencement of the exercise. The first phase of the exercise which involved the sale of the 1004 flats in Victoria Island and Eric Moore Towers in Surulere among others was greeted with serious criticism especially with respect to the fact that the occupiers of these flats were not given the first option to buy as enunciated in the guidelines for the sale of the houses. The other criticism was in respect of the prices which were adjudged very low when compared with market values. It will be subjudice to say anything about this first phase now as some matters with respect thereto are in court. However, it is instructive to note that everybody had thought that the first victims of the exercise will be the occupiers of these flats who were to be thrown out of their apartments on the expiration of the quit notices served them by the Ministry of Housing and Urban Development (HUD). Unfortunately, the first victim was the Minister herself who was not only thrown out of her apartment but also out of her job! What an irony of faith? It is possible that more heads will still roll when the full details of the underhand sales of the 207 houses in Ikoyi are revealed. A lot of people have been asking why the sale of these houses in the first instance? The simple answer is that it is as a result of MONETISATION! And what is monetisation and why is it necessary?
Monetisation is one of the economic reforms of the Obasanjo regime. It is one of the ways of reducing government wastages by way of several millions of naira voted every year to maintain staff quarters occupied by Senior Government officials and political appointees. Government in its wisdom thought it is better to convert the housing benefits of these people to monetary payment (monetise) rather than house them in staff quarters. This is where the word "MONETISATION" came into being. You are not likely to find it in any dictionary like many other words in Nigeria. It may be necessary to examine the arguments for and against the whole exercise itself but before then, let us ask how do we find ourselves in this situation? What is the origin? Do Government officials and political appointees have official quarters in developed countries like Britain or America?
The answer to the last question is obviously capital NO! Then why did the British who ruled us up to 1960 start such a system? Again the answer is simple! Initially all Senior Government Officials were whites who could not live among the blacks hence the need to create Government Residential Areas (GRAs) where the whites lived in secured, clean and serene environment. When the native Nigerians started occupying such Senior Government positions such as directors and permanent secretaries, they too joined the class of residents of the GRAs.
This trend continued after independence and the facility was extended down to almost all senior staff on level 08 and above subject only to availability of houses. Critics of the staff quarters system have postulated that, it is because these senior government officials and political office holders enjoy these facilities that they don’t pay any attention to housing for the people. Hence there was no housing policy until recently, no sound mortgage system even up till now, no massive public housing programmes as witnessed in the council flats in London and America. Infact housing for the public was left entirely to the private sector until the second national development plan.
The supporters of the system have however countered by saying that these people deserve to be housed in secured and serene environment near their places of work. They argued that some of these people handle some very sensitive and dangerous government matters which make them vulnerable to attacks by those who may be affected negatively by some government policies. They also contend that they sometimes need to work late and/or get to their offices very early, hence the need to live very near their offices. It is further argued that some of them may even have to work at home after office hours and at weekends, hence the need to live in a congenial and serene environment.
Let us now move away from these arguments and examine whether it is really feasible to ask all senior government officials and political appointees to go and look for accommodation by themselves in the light of our own peculiar situation. Take for a example a legislator just elected from Ilawe-Ekiti in Ekiti State or any other village from the far north or east of the country. He or he is expected to come to Abuja and start to look for accommodation. With the high rents prevailing in Abuja and the need to pay two years advance, it is unlikely that such people can afford to live in any good area of Abuja with the present salary and emoluments they earn. This may lead to the lawmakers becoming more aggressive in their demands, first for higher wages and allowances, second for more bribes and gratification from the presidency and ministries before their budgets and bills are passed. It may also discourage quality people from contesting for such positions which may lead to lower quality of debates and consequently laws that will emanate from such a body.
A similar legislator from any part of USA or England coming to the house in either Washington or London does not have such problems. He can get a house easily at affordable rents with no advance payments. He can even buy a house and secure a mortgage within weeks without any down payment. So Government has no business in providing accommodation for either legislators or officials as they can cater for themselves from what they are paid.
In 1979, when Obasanjo was going he had made provision for the legislators at Durbar Hotel, Amuwo Odofin (a one-bedroom flat each). But the legislators rejected these and seized the 1004 flats which was just completed and being allocated to civil servants. I hope the legislators coming in 2007 will not seize any government properties that may be available in Abuja if the Apo village is finally sold to the present ones!
Now let us examine the processes of the sale of the houses so far. As I said earlier, I will not want to discuss the first phase of the exercise which involved the 1004 flats and the Eric Moore towers because of the cases in court thereon. The advertisement for bids for the second phase which concerns properties mainly in Ikoyi, Lagos appeared in the newspapers towards the end of March 2005 (Guardian 30th March, 2005). Later about the first week in April (This day 7th April, 2005), the advertisement for the ones in Abuja was published by the FCT. The guidelines are essentially the same except for some minor differences. For example while the advert for the Ikoyi properties contained the list of the properties to be sold, the FCT advert contained no list of such properties.
A major difference however is the clause on the condition of sale in the FCTs’ advert which stipulates that the right of occupiers to bid is neither transferable, assignable nor alienable in any way or form".
The FCT may have to make more explanation on this clause. On the face of it, it means an occupier cannot transfer his right to bid and buy the houses. But can he/she transfer after he/she has bought? If the answer is NO, for how long will that condition subsist? It will be unfair to tie the hands of the buyers for ever. I do not think there is any need for the clause in the first instance. For example, the full implication of that clause is that an occupier cannot even take a mortgage to purchase the house since a mortgage is a transfer of ownership until the debt is paid back in full! El-Rufai, over to you please!
Now the bid process itself. The occupiers of these houses are requested to bid like all other Nigerians for these houses with a proviso that the occupier will be given first option at the highest bidders price. Fair enough! But while these adverts were being rolled out, unknown to many of us, some occupiers and non-occupiers have been offered some of these houses as revealed by no less a person than Mr. President himself! What a fraudulent act? Had Mr. President not cancelled the sales, some occupiers would have been denied the right to bid for their own houses and they would have been asked to vacate for the Governors, Ministers and other priviledged Nigerians who had paid for the houses. Whatever the reason for Mr. President’s action, we should commend him for that bold step in the spirit of the new war on corruption. Infact, all those who benefited from that exercise should be disqualified from bidding except those who are occupiers.
That the Government had promised the occupiers the first option to purchase at the highest bidders price seems fair enough. However, to make the occupiers, some of whom have lived in these houses for over ten to twenty years, to be competing with money bags who had made their money by defrauding this nation and all of us through bribery, kickbacks, over inflation of contracts, underpayment of duties, over invoicing, payment for goods not supplied, 419 scams, smuggling, bunkering etc is not fair. Some of the occupiers are civil servants and military officers who have never been opportuned to be in a position to steal public money. They therefore deserve more than the right to buy at the highest bidders price.
To worsen their situation, they must first submit a bid with ten percent of their bid price. Many of them cannot even afford the ten percent. And no bank will lend you such money. I think what government should do is to offer these occupiers using the figures of valuation from the Estate Suveyors & Valuers as a guide. They should not be made to pay the full values. As an occupier, they have an interest. In London, occupiers of council flats are allowed to buy them at figures sometimes half the open market values. There is no reason why we cannot compensate these people by offering them these houses at 75% of the valuation figures.
With a letter of offer, they can now approach their banks or other financial houses for loan to pay. They should be given 90 days to pay failure which the properties should be thrown open to the general public to buy.
As things are now, one is skeptical about the success of the whole exercise. It is unlikely that all the properties will be sold at any reasonable prices for the following reasons:
1. It is not wise to throw so many properties in the market at the same time especially in a market restricted area like Ikoyi and Abuja where only a few people can afford to buy properties. This is a sudden increase in supply without any corresponding increase in demand. By the elementary laws of economics, the price must fall. The Nigerian economy is already strangulated by the recapitalisation of banks. There is therefore no lose money in the economy for now which can be diverted to investment in properties. I therefore expect very low and even ridiculous biding figures. In the absence of a reserve price (it wasn’t mentioned in the adverts), government may be selling the houses at very ridiculous and give away prices to the highest bidders and the nation will be the loser.
2. Majority of the few people who have the money may not bid because they cannot explain the source of their money if asked to do so. And it is very likely that Government will ask in the spirit on the on-going crusade against corruption and all other vices. Remember what happened to those who purchased heavy shares in the banks recapitalisation exercise.
3. Another thing that may discourage people is the fear of getting possession immediately. If you win a bid on a house presently occupied, it may not be easy to get the occupier out of the house. It is worse if the occupier is an army or police officer. Even if he is a civilian, you may be in court and the case may drag on for the next three to five years. It doesn’t matter whether he has a good case or not. Not many people will want to tie their money down for such long period and at the same time continue to spend on litigation. It may not be easy for government to use force to eject everybody. The 1004 and Eric Moore towers are good examples.
4. Another source of apathy is the general lack of trust in anything government. After the whole exercise had been completed, the same government or even the next one may pick some holes in the whole exercise either by saying that they were sold too cheaply or that it does not reflect national character, and reverse all the sales. You will be lucky if you get your money back!
5. At the end of the exercise, I can forsee some confusion or possibly litigation. The advert inviting bids did not inform us that there is a reserved price as I had earlier mentioned. Whenever there is such a reserved price, the law requires you to say so. Hence, it was necessary for the advert to include a clause that says "the Federal government is not bound to sell to the highest bidders where such bids are below the reserved prices". You don’t have to mention the reserved figure. Now, in the absence of such a clause, if I bid N25.00million for a property that is worth N200.00million, will Government sell to me? By law, Government must because it says the property will be sold to the highest bidder subject only to the occupier being given the first option. If government should refuse to sell to me, I can go to court and I will surely win, all things being equal.
In the light of all the above, I will like to recommend as follows:
i. Government should cancel the bidding process before it closes.
ii. The properties should be sold in several phases in order to command good prices. What is the need for the hurry? That of Abuja should be halted for now.
iii. All the occupiers of these properties should be given letters of offers to purchase them at a figure less than the valuers reports, say 75 percent and be asked to pay within 90 days or more.
iv. The Federal Mortgage bank should be directed to give loan to them subject to the bank’s other conditions.
v. After this, the properties should be advertised with prices as per the valuers figures. Any interested person can then make an offer to buy.


The process can continue for as long as Nigerian Government is in place. There should be no rush if the real open market values are to be realised.
Sale by bids is not a good method of selling too many properties. It is only good for one or few properties which are in hot demand with so many potential buyers. You allow them to compete with each other. The present situation is not the same.
vi. The sale of the legislators quarters should not be done for now. Otherwise Government will be forced by future legislatures to house them in Hotels at very high cost to the public. They can always blackmail the executive to grant their requests either by refusal to pass budgets or bills or even to meet. Remember the way the legislators seized the 1004 flats in 1979!.
Generally, it is necessary to always consider proposals or advice from the IMF or World Bank in terms of our local and peculiar environment before implementing such here. Unfortunately, the arrow head of all these reforms, the Minister of Finance, cannot feel it as she is being paid in dollars. If Government can pay every political appointee and legislators the same amount of N3.00million per month that we hear she earns, there will be no need to house them or give them official cars. From such a salary, they can afford to rent houses anywhere in Abuja or even buy.