Business

Residents in Lagos are facing increasing frustration as landlords implement substantial rent hikes, surpassing 90%, attributing the surge to the prevalent inflationary pressures.

The rent surge has been particularly noticeable over the past five years, making affordable housing a significant challenge for many Lagosians.

The findings, sourced from data provided by prop-tech platform propertypro.ng and various estate agents, reveal that the weighted average of rent increases across different locations in Lagos stands at an alarming 90.32%.

The surge affects a wide range of neighbourhoods, including Ikeja, Iyana Ipaja, Ikorodu, Surulere, Ilasa, Gbagada, Yaba, Lekki, Ajah, Epe, Magodo Phase 1, and Ikoyi.

The rental rates for 2-bedroom standard apartments have seen dramatic shifts, with the most affordable areas, like Epe, having rates as low as N350,000. In contrast, the upscale Ikoyi area boasts rates reaching as high as N10 million.

Analysis of the data indicates that the economic climate, marked by inflation and increased costs of construction materials, is a driving force behind the rent surge.

Real estate experts point to the rapid urbanization in Lagos, coupled with the high demand for housing, as contributing factors. Economic growth and heightened real estate investments have further intensified the competition in the housing market.

The surge is evident in various parts of Lagos, with Ikeja and Iyana-Ipaja witnessing a doubling of rental rates to N2,000,000 and N800,000 between 2019 and 2024. Other areas like Ikorodu experienced a 60% rise, going from N250,000 in 2019 to N400,000 in 2024.

Femisi Balogun, a developer, attributes the surge to the increasing costs of building materials and inflation. He notes that these factors, combined with rapid urbanization, have driven high demand for housing, contributing to the overall escalation of rental prices.

A real estate expert, Odefadehan Christian, said the driving force behind the surge in rental prices could be attributed to inflation, particularly the significant spike in building material costs.

He told Punch, “The substantial increase in prices for essential materials, such as cement, which has more than doubled from 2,400 in 2019 to 5,500 in 2024, necessitates a corresponding adjustment in rental rates, to compensate for these heightened expenditures.

“Additionally, the evolution of construction techniques and the incorporation of cutting-edge technologies in building infrastructure, encompassing advanced wiring, sophisticated lighting features, and state-of-the-art security systems, contribute to an augmented overall cost of property development.

“Consequently, these advancements in both materials and technology are pivotal factors contributing to the upward trajectory of rental expenses.”

The Central Bank of Nigeria has dissolved the board and management of four banks in a move that is seen as the implementation of the report of the Special Investigator on Central Bank of Nigeria (CBN) and Related entities, Jim Obazee.

The banks are Titan Trust Bank, Union Bank, Polaris Bank, and Keystone Bank.

The decision to dissolve the boards was taken after a meeting between Yemi Cardoso, Obazee, and the board and management of the four banks.

The dissolution is coming after the investors in Titan Trust Bank refused to honour the invitation to a meeting with the Special Investigator.

All the four banks are involved in the special investigations on how the CBN was run under Godwin Emefiele, the former governor who was ousted soon after President Tinubu took office last May.

Union Bank of Nigeria Plc and Titan Trust Bank (TTB), is facing an uncertain future following the special investigation report on the activities of the central bank under Godwin Emefiele.

Nigerian telecommunications giant Globacom (GLO) has slammed reports accusing them of owing interconnect charges to rival MTN, calling the claims “entirely false” and a result of inaccurate fact-checking.

Earlier in the week, a public notice from the Nigerian Communications Commission (NCC) surfaced online, threatening partial disconnection of GLO over unpaid debts. The notice, signed by NCC Director of Public Affairs Reuben Muoka, stated that GLO’s failure to settle the N1.6 billion debt despite repeated attempts had prompted the action.

However, GLO, speaking to the News Agency of Nigeria (NAN) in Lagos, have now denied any debt to MTN.

“We are not owing MTN any interconnect charges,” the official stated, adding that proper cross-checking should have been done before such accusations were made.

The official further argued that GLO was a pioneer in the telecommunications industry, breaking the monopoly of foreign companies with their innovative pay-per-second billing system. He criticised the report as an attempt to smear the reputation of Nigeria’s leading indigenous telecoms company.

Globacom subscribers will not be able to make calls to MTN lines soon due to the non-settlement of interconnect charges.

The Nigerian Communications Commission disclosed this on Monday in a public notice signed by Director, Public Affairs Department, Reuben Muoka.

It stated that it granted partial approval for the disconnection of Globacom from MTN Nigeria Communications Plc.

It said, “Globacom was notified of the application made by MTN and was given the opportunity to comment and state its case.

“The commission, having examined the application and circumstances surrounding the indebtedness, determined that Globacom does not have sufficient or justifiable reason for non-payment of the interconnect charges.”

The NCC revealed that at the expiration of 10 days from the date of this notice, “subscribers of Globacom will no longer be able to make calls to MTN but will be able to receive calls.

“The partial disconnection, however, will allow in-bound calls to the Globacom network.”

This is not the first time Glo subscribers will be disconnected from making calls to MTN over the same issue.

In 2019, MTN, acting upon a directive from the NCC, briefly disconnected Glo subscribers over a N4bn debt.

In December 2018, the telecom regulator approved mobile network operators to disconnect other operators over rising interconnect debts and the failure of the affected operators to pay.

The total disconnect fee in the industry at the time was about N165bn.

Interconnect charge is the price that telecom operators pay each other for calls terminating on their networks.

According to a source in MTN, Glo owes the firm about N6bn for interconnect fees.

Efforts to get Glo’s reaction are still in progress as the firm has yet to comment on the issue.

There were 61.39 mobile subscriptions on Glo’s network as of the end of August 2023.

According to the new NCC notice, these lines will not be able to make calls to MTN lines from January 18, 2024.

Foreign airlines were owed more than $700 million at the end of November.

The Central Bank of Nigeria has paid nearly $2 billion in outstanding foreign exchange forwards in the last three months in a bid to clear a backlog of dollars, but forex shortages continue to hobble the country’s naira currency.

Acting spokesperson for the apex bank, Hakama Sadi Ali, in a statement obtained by Reuters on Sunday said the CBN also recently paid $61.64 million to foreign airlines, who sold tickets in the local naira currency but have not been able to get their money out of the country.

Foreign airlines were owed more than $700 million at the end of November.

“In the past three months, the CBN has also redeemed outstanding forward liabilities amounting to almost USD 2 billion,” acting spokesperson Hakama Sadi Ali said in a statement late on Sunday.

“This underscores the Bank’s commitment to the resolution of pending obligations and a functional foreign exchange market.”

“These payments signify the CBN’s ongoing efforts to settle all remaining valid forward transactions, with the aim of alleviating the current pressure on the country’s exchange rate,” Ali said.

Africa’s biggest economy has nearly $7 billion in forex forwards that have matured, a major concern for investors, but the bank has promised to pay up to boost confidence in the foreign exchange market.

Nigeria’s foreign currency shortages have been worsened by declining oil production, which is the country’s largest export, accounting for more than 90% of dollar inflows.

President Bola Tinubu has promised to boost foreign currency inflows into Nigeria by attracting new investment, ramping up oil production and reforming the foreign exchange market.

Jubilee Syringe Manufacturing Limited (“JSM”) located in Awa, Onna Local Government Area of Akwa Ibom state, has clarified that it has not ended its operations in Nigeria.

JSM, which was inaugurated on September 23rd, 2017, by the former Vice President of Nigeria, Professor Yemi Osinbajo, has become the market leader with its top-quality syringes in the country, in addition to creating  employment opportunities for Akwa Ibom people and other Nigerians.

However, despite the huge sum invested in the syringe factory, the management staff have been unable to meet up with its expected target, hence, the decision of the investors to restructure and reorganise the management team and the entire structures of the production lines for better profitability and sustainability.

A statement by JSM investors through the Managing Director of VKS Group of Companies, Mr. Onur Kumral,  dismissed the reports that JSM was ending its operations in the country completely. 

He explained that contrary to reports, the company is only undergoing a restructuring phase, which will only make the company experience a brief break within this period.

Kumral noted that the reorganisation of JSM is a decision of the investors, following the inability of the management to meet up with its expected targets for several years, stressing that the shake-up only affects management staff and the entire structures of the production line, which is geared towards better productivity of the company. 

He assured that the company will return to full operations soon.

The statement reads in part: “JSM is simply undertaking temporary measures to ensure the long-term sustainability of its operations. Restructuring is not new in any given business environment and sometimes you undertake reviews with sustainability in mind.

“When you set up a multimillion-dollar factory such as JSM, it is important to take a critical review of its operations and that of the management staff. JSM is a for-profit business and when expected targets are not met year after year, a shake-up is inevitable,  which is what we have decided to do.

“We want to assure our esteemed customers that there is no need to panic. We are still in business as Jubilee Syringe Manufacturing Limited and we are poised to keep to our commitment to remain as the producer of the highest quality syringes in Nigeria.

“We call on the general public and our esteemed customers to disregard insinuations in certain media outlets reporting a total shut down of JSM operations in Nigeria, we remain in business, and we will come back stronger than before.”