AN ASSESSMENT OF THE AVAILABILITY OF FINANCE FOR RESIDENTIAL PROPERTY DEVELOPMENT IN NASARAWA

AN ASSESSMENT OF THE AVAILABILITY OF FINANCE FOR RESIDENTIAL PROPERTY DEVELOPMENT IN NASARAWA

ABSTRACT

The focus of this study is to examine, an assessment of source of finance on residential property development in Nasarawa. The study attempts to explore the various sources of finance that are available for residential property development with a view to determining effective flow of funds. To achieve this some estate surveying and valuation firms in Nasarawa that engage in residential property development, some sources of financial institution that fund residential property development and some developers were examine through the use of questionnaires in order to know much about residential property development in terms of fundings. Simple descriptive statistical methods were used for the analysis and presentation of the data. The study shows clearly show that high interest rates to that of the numerous requirements from applicants for loan, which in most cases they find difficult to meet bedeviled the sources of finance in Nasarawa, beside the inflationary rate in the Nasarawa also contributes to the sources of finance in residential property development in Nasarawa. It recommended among others that the Nasarawa government should try to help in terms of financing in residential property development in Nasarawa.

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Housing is crucial to national development and socio-cultural growth in any human society. Housing is universally acknowledged as the second most essential human need after food, and is considered a major economic asset in every nation. Internationally, housing is recognized as a factor for the assessment of human development and societal civilization (UNO, 1976).  Hayakawa (1983) noted that, “Housing which does not provide space for contemplation will not allow for the growth and development of individuality. Thus, housing not only contributes to the development of man physically and mentally, but also contributes to the growth of culture and human morals. In a broader sense, housing profoundly affects a wider aspect of family and community life and wellbeing.

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.

1.2     STATEMENT OF RESEARCH PROBLEMS 

The housing occupies a very unique position in the life of all human beings and standouts as one of the basic necessities of human beings after food as there is the innate desire of every man to own a decent house.

In the hierarchy of societal needs, housing has been ranked second and as a result of this, housing provision has become a paramount cornerstone of the policies of various governments both at federal and state levels since independence in Nigeria. The consequences of the rapid rate of urbanization are most visible in the rapid deterioration of urban housing resulting in urban housing poverty especially as there is no proportionate increase in the number of housing stocks.

Retardation in the growth of housing for the increasing population triggered the interest for this research to enquire into the possible reasons for housing shortage in Nasarawa. Successful housing projects always dwell on the availability of land with development potentials, building materials, labour and finance. The first four factors (land, building, materials and labour) are apparently visible in Nasarawa town, but the availability and affordability of finance cannot be ascertained without a study of this nature.

Thus, this study seeks to answer the question of whether there is enough finance to support residential property development in Nasarawa.

1.3     AIM AND OBJECTIVES

The aim of this project is to assess the availability of finance for residential property development in Nasarawa with a view to discover its accessibility.

In order to achieve the aim stated above, the following objectives were pursued:

1. To examine the sources of finance for residential property development in Nasarawa.
2. To assess the availability of finance for residential property development in Nasarawa.
3. To identify the factors that hinders the availability of finance for residential property development in Nasarawa.
4. To proffer solutions to the identified problems.

1.4     RESEARCH QUESTION

1. What are the sources of finance for residential property development in Nasarawa?
2. How availability and accessible is finance for residential property development in Nasarawa?
3. What are the factors that hinder the availability of finance for residential property development in Nasarawa?

 1.5     SIGNIFICANCE OF THE STUDY

This project will help to explain the availability of finance for residential property development in Nasarawa. It will be useful to the whole Nasarawa people by revealing various means of sourcing finance for residential property development. It will also help students, individuals or group carrying out research of a similar nature as reference material to build on in the future.

1.6     SCOPE AND LIMITATION

The project is concerned with analytical study of availability of finance for residential property development in Nasarawa.

The study is geographically confined to Nasarawa town of  Nasarawa LGA Nasarawa State. It dwells only on the availability of debt finance as opposed to other sources of finance for residential property development only. The time scope within which the study is focused is the previous decade (that is, 2006 to 2016). This is to reduce the cost of the research to a manageable size so as to achieve reliable results.

Although the scope of the study is large, some of them gain their income through salary and some through contribution for them to develop their residential property.

For a meaningful approach and critical analysis of a work of this nature one has to put into consideration the limited time and materials and confined to a specific area. As earlier stressed, the project will focus attention on residential property development in Nasarawa.

 1.7     OPERATIONAL DEFINITION OF TERMS

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

PUBLIC ESTATE: Are land and building owned and directly managed by public authorities and those rights of control which public authorities exercise over the estate of the private owners.

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).

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

NASARAWA TOWN

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).

Umaru later known as Makama Dogo was born in 1958 at Ruma village in Katsina Emirate, his father was Usman Kabawana and his mother Amina. Umaru migrated to Zana , having lost his parent where he =-stayed with Emir Musa, he was accorded recognition by Shehu Usman Danfodio, among the jihadists that captured Zana under Musa.

After receiving the flag from Danfodio, Emir Musa sent Umaru Southward of Zana to spread the Islamic faith, Umaru arrived at a place called Zana near thepresent Nasarawa region. He met Abdu Zanga a Fulani normad from Katsina, they both became very close that Umaru adviced them to present themselves to the Emir of Zana for recognition, this was done successfully, which triggered the granting of a request of Abdu Zanga by the then Emir of Zana to settle in a place called Keffi which was ruled by Abdu Zanga since he was the eldest with Gunki, his Madaki and Umaru as Makama.

In 1802, Keffi was famous for the exploits of the great warrior Umaru and with Abdu Zanga. A misunderstanding between Abdu Zanga and Makadi Gunki later made the duo paeted ways.

On the sickbed 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 misunderstandind 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,

GEOLOGY

From the Jos Plateau, this comprises of basement complex metamorphic rocks, granite and basalt of two or more ages. The basement complex is covered by shadow soil.

WIND

Nasarawa local government is determined by the seasonal movement on inter-tropical convergence zone [ITCZ], which represents the moving frontier between the moist Atlantic air from the south and the dry air from the north. In the dry season from November till March the north east wind are dominant. For the remaining of the year, the south-western winds are prevailing. Generally, the wind velocity is relatively low.

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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