Our Stand (46) —
Home-ownership in Nigeria when compared to some countries, is low than what is expected. The percentage of Nigerians residing in urban areas who own their homes can be described as lower than those who don’t. It is true that in the past, housing has always been included in the country’s development plans, hoping that it would be a stimulant for economic growth, like its visible effects would be seen in job creation, thereby, reducing poverty.
However, despite the importance attached to the housing industry through housing development plans like the construction of 300,000 housing units under the National Social Housing Programme (NSHP) which is a housing component of the Nigerian Government’s Economic Sustainability Plan to deliver affordable housing and millions of jobs for Nigerians, these plans are yet to produce the desired effects in the built industry. This may not be unconnected to the usual systemic problem and poor executions of budgetary allocations.
Under this initiative, 300,000 homes are expected to be constructed in all states of the federation including the Federal Capital Territory (FCT), spearheaded by the Family Homes Funds (FHF) as the financier of the project.
The essence of this write-up is to give an analysis of how the housing market fared in 2021.
Aiming to reduce poverty through ownership of houses as stated in the Millennium Development Goal, Nigeria is yet to achieve this goal as the country is still experiencing huge housing deficit which mostly affect the low and medium income earners where demand is critical. The government made promises to Nigerians to ensure housing for all and as at the end of 2021, most of these promises are still at policy level or early construction and planning stages, with no assurance of when the final product will come to be. Access to affordable housing is becoming an unfulfilled dream, with expectations declining from bad to worse.
2021 was not the best of times for intending homeowners and estate developers, as prices of building materials increased alarmingly in volatile business environments across the country, further compounding an already existing housing deficit.
For instance, in Makurdi, Benue State, a bag of Dangote Cement that sold for N3,600 as at October 2021 was sold at 5,000 in December of same year. Though, these increases in the prices of a bag of cement depend on the location.
Furthermore, prices of iron rods per ton – 10mm, 12mm and 16mm, which were sold at N344,000; N330,000 and N330,000 in February 2021 is now priced at N442,200; N446,450 and N442,200 respectively in Lagos’ building materials’ market (Nigerian Tribune, December, 2021).
In addition, prices of imported roofing sheets and ceiling tiles moved to N3,500 per square meter (psqm), while prices of plywood per sheet now cost between N10,000 and N12,500, depending on the part of the country
Also, a pack of floor tiles selling at N2,200 as at early 2021, is currently been sold between N4,500 and N5,000 per pack.
Coming to mortgage sector, going by reports credited to the Nigerian Tribune saying that the apex mortgage bank in Nigeria, the Federal Mortgage Bank of Nigeria (FMBN) had deployed N47.814bn in loan disbursements towards mortgage and construction financing between January and October, thus closing 2021 on a strong note, must be commended also, for its various housing initiatives meant to provide affordable housing for the populace – like the rent to own scheme. However, one is of a modest opinion that engineering calls should be enhanced for its recapitalization, as it would further improve the bank’s efficiency.
The Managing Director of the bank, Arc. Ahmed Dangiwa said that FMBN disbursed about N19.886bn towards the delivery of 2,921 affordable housing units in several locations across the country. “The houses comprise one, two and three-bedroom bungalows and mixed apartment buildings with a price range of N3.6m to N8.6m”, he said. He added that the bank also provided N13.508bn in NHF loans to 1,130 Nigerians to enable them to achieve their home-ownership dream. The loans are payable over 30 years at a single-digit interest rate of six per cent.
Furthermore, hoping for improvements in 2022, lack of accurate data is a challenge among many others, affecting housing development in the country. One could say that as at the end of 2021, there is little or no detailing data covering the number of houses made by private developers and the government across all levels. Citing the 2021 Ikoyi building collapse which was a low point in the real estate sector and claimed several lives including the owner of the building, there is a need to pay attention to standard housing constructions to halt the increase rate of building collapse. It is most likely that there is/are no monitoring team(s) to inspect the quality of ongoing construction works of housing units and keeping an up to date data on them. If there is, it would help in maintaining or upholding the organizational strength of the built industry.
The government should pin-point areas through the creation of a standing committee and act on findings that cause building collapse and find solutions to avert future occurrence.
On the way forward for improving the housing sector in 2022 and beyond, government strategies and policies should support the delivery of social and affordable housing as well as the provision of primary infrastructures. It should not be the responsibility of the private sector or developers to build roads, provide portable water and electricity for residents of their various housing projects. The government must aim at providing an enabling environment for the supply of houses.
They should also find solution that will address the constant increase in prices of building materials, if left uncheck, housing affordability will elude many Nigerians. There is a need to urgently improve local contents in our building processes, especially the materials used. Clay can serve as alternative for bricks as walling and terracotta (clay tiles) as roofing materials.
The government should also support housing finance institutions like the FMBN through recapitalization (as earlier said) and also, look at ways of supporting developers via concessionary loans at reasonable prices.
Most importantly, our Primary Mortgage Banks need to recapitalize and be strengthened for them to effectively and efficiently discharge their duties. Investigations should be carried out on them and closer attention be paid to their activities to ensure greater effectiveness.
Finally, though, time may be short for this administration but, the President Muhammadu Buhari led government must implement its housing policies and programmes so as to fulfill its housing promises made to Nigerians during its campaign, in order to leave a good legacy in the minds of Nigerians, especially the low and medium income earners who make up bulk of the country’s population.