How A Young African Leader Plans To Fix Nigerian Affordable Housing Shortage
This article is one in an AFKInsider series that follows some of the young African leaders chosen to participate in U.S. President Barack Obama’s Young African Leaders Initiative (YALI). The initiative is a U.S. effort to invest resources in the next generation of African leaders and entrepreneurs. Each year 500 young Africans are chosen to visit the U.S. and receive mentoring at top U.S. universities. Here’s the story of one of them.
Nigeria, population 173 million, is short an estimated 17 million houses, although some think that’s a low number.
But here’s a much higher number to get get your head around: about 95 percent of the Nigerian population cannot afford to rent or own a home, according to Nigerian entrepreneur Amaka Osarieme Nwaokolo.
Nwaokolo’s startup, Blue Tower House Services, aims to meet the demand for affordable housing in Abuja, the Nigerian capital.
Through innovative building technology, Nwaokolo says she can reduce the cost of building and in the process, lower rental rates. She plans to introduce flexible monthly payment plans.
Her ideas and efforts landed her a spot in U.S. President Barack Obama’s coveted Young African Leaders Initiative.In 2014, there were 50,000 applicants and 500 accepted, according to the YALI website.
Nwaokolo earned a bachelor’s degree in mass communication from Bowen University, Osun State in southwest Nigeria. She had five years of experience working in Nigeria’s building and construction sector when she founded Blue Tower House.
The mentoring she received in the 2014 Mandela Washington Fellowship program at Yale University helped her to expand the business and become, in turn, a mentor to other young Nigerian entrepreneurs.
Blue Tower House is piloting a 300-unit housing development in Abuja. Nwaokolo’s goal is to provide affordable housing with flexible payment plans for low- and middle-income earners in Nigeria using alternative building technology.
A one-bedroom apartment outside the Abuja city center rents for an average of $250 a month, according to research and data site Numbeo. Blue Tower House rental rates will start at about $85 a month, Nwaokolo said.
Amaka Nwaokolo talked to AFKinsider about her experiences in the Young African Leaders Initiative, and how they helped her grow her business and solve local problems in Nigeria.
AFKInsider: How did you get into YALI?
Amaka Nwaokolo: I had just begun to focus on building an affordable-housing startup in Abuja when I got to know of the fellowship opportunity while doing some research online. Despite the application deadline being really close, I applied with my affordable housing idea, went through the interview stages successfully and had an amazing time in the U.S. I was on the business and entrepreneurship track at Yale University, New Haven, Connecticut.
AFKinsider: What did you get from the experience?
Amaka Nwaokolo: The Mandela Washington Fellowship gave me an opportunity to gain knowledge, expand my network, and access mentoring and a six-month internship opportunity. It was my first time in the USA and it was great experiencing the American culture. I gained a lot knowledge which I found useful in my personal life and in business.
I also had the opportunity of meeting other young African leaders doing great things on the continent. Today, I have friends all over Africa because of the Mandela Washington Fellowship program. I was also paired with a mentor in the U.S. who provided guidance on putting my business plan together.
I was placed on a six-month internship program at FATE Foundation in Lagos, Nigeria, when I got back home (the nonprofit was created in March 2000 in response to the challenges of the Nigerian business environment). At FATE, I got to work on research and policy advocacy around entrepreneurship in Nigeria which is the newest focus area for FATE. The leadership sessions at Yale were a great learning experience.
AFKInsider: Were the things you learned in the U.S. transferable to the realities of Nigeria?
Amaka Nwaokolo: A lot of the basic business and leadership principles were definitely transferable and adaptable to the Nigerian context. I particularly found the leadership sessions very deep and powerful and useful back home as these sessions focused on developing me as an individual and influencing my interactions with community positively. However, there were some sessions that I felt were disconnected from the African and Nigerian reality. The beautiful thing about such sessions though was that they became learning experiences for the facilitators and everyone present. It was shocking to see how little was known of Africa but it felt good changing and shaping perceptions at such sessions.
AFKInsider: Was there anything in particular that happened that was unique for you?
Amaka Nwaokolo: A unique experience that I think I took away from my fellowship experience was the mind shift I had after a few visits to some places in the U.S. I have always admired Americans for their forward-thinking approach, their problem-solving skills and drive for excellence. I still do but after my visit, I left with a more balanced perception of the U.S. It became obvious to me that the U.S. also faced similar challenges as we do back home. For instance, when we got to the U.S., communication was quite difficult because the phone lines we were given seemed to belong to more than one person. The situation was however, resolved within the week. The difference I see in the U.S. is the leadership in place which works strategically to fix problems while also reaching out to invest in the youth on the African continent.
AFKInsider: How and when did you start your company?
Amaka Nwaokolo: Prior to founding my startup, I worked in building construction and finishing for about five years and learned of the housing crisis in Nigeria. Having experienced the housing challenge personally, I began to dig deeper to find out what the problems were and possible solutions. That was the birthplace for my startup, Blue Tower House. Our solution is to adopt innovative building technology that could reduce the cost of building and significantly reduce the amount of money to be paid in rent while also introducing flexible monthly payment plans. Our target market is the lower end and lower-middle class in Nigeria.
AFKInsider: How did you fund the startup?
Amaka Nwaokolo: I applied for the Nigerian Government’s YOUWIN Women business plan grant competition. The grant I won in addition to personal savings became startup fund for Blue Tower House. We currently have a block of five one-bedroom apartments in Abuja, Nigeria, for which we are fundraising to complete and which will go on the market by the last quarter of 2016.
AFKInsider: Did you face any obstacles being a young entrepreneur?
Amaka Nwaokolo: In trying to pilot my affordable housing idea, there were challenges of funding, overcoming hurdles in accessing land at affordable rates, accessing innovative building technology and setting up a team of qualified personnel. I still face challenges in these areas but strategically work around them.
AFKInsider: How does your company work?
Amaka Nwaokolo: We buy land and build from the ground up. I work with a qualified team comprising engineers, architects, and surveyors with over 35 years’ industry experience who are registered with relevant building and construction regulatory bodies in Nigeria. The team ensures we are able to deliver results.
AFKInsider: What is the housing shortage like in Nigeria?
Amaka Nwaokolo: The housing shortage in Nigeria is widely estimated to be 17 million requiring 60 trillion naira (about US $200 billion) to fix. Many argue that the deficit is way more than this. The Nigerian government’s 2014 mid-year report put the shortage at 23 million. The government plans to build houses across Nigeria thus: Abuja, 15,000; North Central, 5,000; Southeast, 5,000; Lagos, 9,000; Northwest, 7,000; Northeast, 5, 000; South, 5,000; Kano, 8,000; and Port Harcourt, 8,000. This comes to 67,000 units. While this plan is laudable, the work to be done is enormous and the government can’t do it alone.
AFKInsider: What is considered affordable housing in Abuja and how do your homes compare?
Amaka Nwaokolo: Typically, a one-bedroom apartment comprising living area, bedroom, with toilet and bath, kitchen in Abuja would go for between N450, 000 (US$1,500) and N500,000 (almost US$1, 700) in peri-urban settlements (areas located between the city and countryside). It is higher within Abuja metropolis.
Blue Tower House apartments consist of living area, bedroom, toilet and bath, kitchen and storage area going for about 25, 000 naira (about US$85 a month) up to 300,000 naira (US$1,000) annually.
AFKInsider: What makes your company unique?
Amaka Nwaokolo: Against the norm in the property industry in Nigeria, we are working to use environmentally friendly and innovative building technology with the (goal) of reducing the cost of construction while also introducing flexible monthly payment plans. Our target is the lower end and lower-middle class in Nigeria.
AFKInsider: Explain the alternative building technology you are using?
Amaka Nwaokolo: We are experimenting with new methods of construction like aerated blocks (a lightweight, precast, foam concrete building material) which have significant advantages over traditional brick and mortar. It reduces the time spent in construction by over 50 percent and saves more than 15 percent in construction costs. It also reduces environmental waste in construction. We are also experimenting with mud-fired clay which can be sourced locally in Nigeria.
AFKInsider: What are your business goals for 2016?
Amaka Nwaokolo: Top of the list is to complete our ongoing pilot project in Abuja and get the houses on the market and into the hands of those who truly need them. Also planning for the next phase of construction which will be in Lagos. We are also looking to build partnerships as we look to scale up.
AFKInsider: What do you like the most about your business?
Amaka Nwaokolo: Access to decent housing at affordable rates impacts significantly on the quality of life and well being of people and improves productivity with consequent impact on economic growth. It gives me joy to contribute in some small measure to achieve this end.
AFKInsider: What has been the biggest surprise since starting your company?
Amaka Nwaokolo: I am constantly appalled by the number of developers in Nigeria with the wherewithal to do more in the affordable housing space but who choose to cater solely to the high-end and/or upper-middle class in Nigeria.
AFKInsider: Can you tell me more about the Fate Foundation and your involvement?
Amaka Nwaokolo: Fate Foundation is a business knowledge and enterprise support provider with a mission to foster wealth creation by promoting entrepreneurial development in Nigeria.
Fate was established in 2000 and has over the past 16 years trained about 4,200 entrepreneurs and encouraged over 60,700 Nigerian youths on the path to entrepreneurship. Fate recently expanded its focus to include research and policy advocacy focused on promoting the development of an enabling business environment for small and growing businesses in Nigeria.
Upon my return from the U.S., I took on an internship role with Fate, facilitated by the Mandela Washington Program, and became the pioneer staff coordinating the activities of the research and policy unit.
I concurrently handle this role and provide oversight for my startup.