I was concerned when not allowed to use the Ikoyi link bridge after closing hours on November 1, 2021. On further enquiry, I realized it was as a result of the collapse of a building under construction at 44 Gerald Road, Ikoyi Lagos. Having been the CFO of the Real Estate firm that built the first high rise on the Lekki corridor over a decade ago, I have a fair idea of people who must be counting their losses now and that’s why I am not comfortable with introducing politics to this unfortunate situation which has exposed the leprous nudity of players in the Real Estate sector of the Nigeria economy.
Lagos State Government (LASG) also got us confused by indicating initially that what was approved was 15 floors; 24 hours later, we were told the developers actually got approval to go up to 21 floors. Of course, many think this is to cover up the negligence of government officials who were not compelled to say they approved only 15 floors in the first instance.
It would be good if people of integrity in the police, state internal audit etc. can go round and confirm that developers of high rise buildings in particular build according to approved plan so as to prevent the terrible losses some of which I highlighted in this write up. If the foundation of a building is planned for 5 stories, building 7 stories is an invitation to problems. It is in this part of the world that someone would want to build in areas that are relatively swampy without calling soil professionals to do soil test. The excuse of some developers that multiple demands of the government compel them to cut corners in order to remain in business is not acceptable given the evil consequences of such. I have enough experience in real estate to know how poor or no feasibility studies, bad accounting, unrealizable expectations, poor workmanship, inadequate supervision and the strongest of them, greed, can lead to a downfall of a thriving Real Estate firm.
It is a sector that needs regulation just like banking if we are to stop more calamities.
Who are the losers in this sad story?
• Those who died. This is an irreparable loss which 1001 grammar can’t repair. Most if not all of them would be men, bread winners to their families
• Destiny of their wives and children, siblings and possibly aged parents left behind are already thwarted.
• People living or working in the neighbourhood of the collapsed building would suffer adjusting to the sudden transformation of their cool den to a place of convergence of all manner of people. Pollution, physical, environmental, social, spiritual would compel many to leave that area if only temporarily. There are agonizing voices of the trapped that are better not heard and packs of body bags that are better watched on the TV.
• The governor of Lagos State and his team are already facing huge embarrassments. This is a dent to their goodwill if you ask me. It is unfortunate that the news of another building collapse in Lekki filtered in as I write!
• The attention of LASG officials are diverted from other noble causes and the people of Lagos State would bear the brunt of neglect of such responsibilities. For example, medical officials would partake of the stress and may not be able to attend to some other patients who may die as a result!
• The people who were supposed to monitor the project as far as I am concerned have lost their jobs and reputations. Even if they were bribed, the money collected may have finished and even if well-stocked somewhere, according to the Bible, the bread of deceit eventually turns to gravel in the mouth. (Prov 22:17)
• Off-takers who deposited their equity contribution or paid directly to the developer have thrown their funds into a bottomless bag.
• A project of this magnitude would have consumed a lot of OPM (other people’s money). Conservatively, not less than Ten Billion Naira would have gone into it. The bankers who loaned money to the developers are in trouble. Those who provided mortgage facilities to subscribers would be affected. This means the affected banks would declare less profit/dividend and investors in such banks will have lower returns on their investment! Who knows, it may cost some board members their seats.
• What of suppliers that may not have been paid? Their capitals may have been buried in the building. If they borrowed money from banks, they may have to run out of the country when the collaterals are seized by the sharks in our banking system. Family and friends who may have supported with some amounts also have to mourn in silence.
• The “professionals”, architects, engineers, builders, project managers etc. have lost their certificates, reputations, etc. If they had insurers covering them, that industry is also not spared.
• Death has covered the shame of the developer having died along but his employees who were not killed under the rubbles have lost their means of livelihood and they had better delete the name of the company from their CVs if they hope to get another job.
• People who have bought apartments from the firm in the past have reasons to worry. Aside from the fear that they may be living in a building that could kill them, they should expect some harassment from government officials who would now want to show they are working. Integrity tests would have to be conducted on their buildings and they would have to pay!
• Other real estate developers in Ikoyi, Banana Island, Lagos Island, Ebute Metta, Lekki etc are in trouble as they would have to face a lot of gra-gra from LASG officials aside from the fact that subscribers would now be circumspect in paying them. Would be off-takers would hold on. Salesmen would need to make more efforts in wooing customers. Interests would accrue and some of the Real Estate firms could even go bankrupt as bankers would also be more careful in the continual finance of the Real Estate Sector. Bearing in mind that these areas attract the largest investments in Real Estate in the whole of West Africa, this is a serious setback.
• The law firm hoping to make money from the preparation of agreements has lost good income. The auditors have no company to audit again, journalists who would have had some fun on the opening day of the building may also have lost something. Aside from brown envelopes, no more advert income for media owners who would have made some gains from leasing their platforms to lure people to buy into the project.
• We can see that the ripple effects would touch employment. There may be a need to downsize as a result of liquidity issues since many can’t even make the projected profit while fixing selling price for off-takers as a result of rising costs of construction.
I can go on and on. This calls for sober reflection. Instead of throwing stones, it would be good if we all look inward and consider the ripple effects of our actions and inaction in everything we do daily and the good things we refuse to do.
May the Lord convert the womb of every vision that would lead to multiple woes to its tomb while we trust Him to comfort all the bereaved family and everyone of us who have to partake of the pains emanating from the negligence of a few.
- Olatona is a Lagos based chartered accountant and social critic.