From Our Housing Stand (131)
64 years post-independence. Yes! It’s true that October 1st is a time for introspection about the history and current status of our beloved country. Like most people, we all have questions regarding the occasion since it honours the nation’s history of struggles while also focusing on the present and the future. For a great number of Nigerians, October 1st is more than just a date.
Nigeria, with its rapidly growing population and accelerating urban migration, has long struggled with housing challenges. These range from a staggering deficit in affordable homes to the proliferation of slums and substandard living conditions. For decades, these issues have persisted, exacerbated by systemic inefficiencies, inadequate financing, and a lack of coherent national strategy.
In retrospection of how the housing sector has fared so far, it is imperative to note that, while many Nigerians have plunged deeper into poverty, and homelessness due to economic policies, the housing deficit currently bedeviling the country has reached an all time high of over 28million units. The uncertainties and apparent roadblocks challenging the housing sector, has had a profound effect on the sector, with a clear reflection of the dissatisfaction of Nigerians towards the sector.
Despite multiple schemes implemented by various governments around the country, affordable housing remains elusive to the average Nigerian. Because the situation is comparable to that of other developing nations, it remains a key concern in these countries’ socioeconomic development. Over 52% of Nigeria’s population has been claimed to live in shanties, squatter communities, and informal settlements.
The Nigerian housing sector since 1960, has seen numerous efforts made from different successive governments, through the then National Development Plan. Through these efforts, the then Administration resolved in the creation of interventions.
However, its climax in the proposed interventions was before the year 1999, where the government created The Federal Housing Authority and the Federal Mortgage Bank of Nigeria (FMBN), With the major responsibility of Housing Financing, while the FHA was assigned as the Construction arm of the Federal government.
In another effort to strengthen the sector, former President Olusegun Obasanjo’s Administration in the year 1999 established the Presidential Technical Committee on Housing, the Committee tried to seek ways to inject new ideas into housing delivery.
This Technical committee was also responsible for the appointment of another committee which had the sole responsibility of implementation. The Committee’s then head, late Professor Akin Mabogunje held the strong ideology that empowering the private sector was important in the housing delivery process, due to the Nigerian population. With these factor coming to play, Prof. Mabogunje was given The Federal Government’s Approval to incorporate a scheme in the Federal Mortgage Bank, that sought to grant loans to developers.
Late President Umar Musa Ya’ardua also came with the hopeful preposition of a Land Tenure System in his manifesto, sadly the proposed Intervention Couldn’t come to fruition due to his short time in power.
The Goodluck Ebele Jonathan’s Administration, also came aboard with a mouthful of promises for the housing sector, this pledges led to the Establishment of the Nigerian Housing Finance Company.
The Muhammadu Buhari Administration then came with the strategy of merging the ministries of Works, Power and Housing together, a move many experts in the built industry described as a “mistake”. The Administration later removed power and renamed it, Ministry of works and housing. The then Baba-Tunde Fashola led Ministry of works and housing were bedeviled with numerous hurdles, but managed to deliver on some housing schemes, before a change in Administration.
The Buhari led Administration also introduced the Family Homes Fund (FHF) with the responsibility of financing housing delivery in the country. An intervention that experts claimed, ‘has gotten lost in the wind’
The Renewed Hope Cities and Estates, an initiative of the President Tinubu led Administration aims to provide affordable housing for Nigerians, with hope to achieving this feat, they have begun with the construction of 2,000 housing units in eight states of the federation.
According to the scheme, the Renewed Hope Cities and Estates programme will operate as a cross-subsidy initiative, explaining that 80 percent of the housing units will be sold at commercial rates while the remaining 20 percent will be offered at concessional rates to low- and medium-income Nigerians affiliated with the Nigeria Labour Congress and the Trade Union Congress.
How sustainable is this intervention? Well, time will tell.
The Executive Director, Housing Development Advocacy Network (HDAN) Mr Festus Adebayo has described the Nigerian Housing sector as “not so palatable as at today” He said solution based interventions has never fully been prioritized.
He cited, Land Grabbing, Corruption, Poor access to land, Infrastructure deficit, High cost of building materials, as threats to affordable housing delivery in Nigeria.
“At 64 Nigeria is yet to kick start the production of its indigenous building materials, 80% of building materials in the Nigerian market are imported.
“At 64 Nigerians can’t boast of any house, built from locally sourced materials” he lamented.
Mr Festus said the Nigerian Housing Private sector must be commended for thriving in the midst of the hurdles.
Most Housing Interventions, he said, are more like competitors, seemingly created as mere repetitions, without actions.
“We demand that the sector must be regulated, we demand that there must be political will, we demand that the sector must be reviewed, the outstanding bills should be reviewed, The real estate profession ought to be regulated, so as to separate professionals in the Real Estate sector from bystanders. The Laws used 10 years, cannot be relevant at this time. Mr Festus remarked.
Mr Adebayo also called for the establishment of a separate court to sentence real estate offenders, he said 75% of court cases, are real estate offences, and thus necessitate the immediate need for separate courts to try such cases.
Real Estate Expert, ESV Nuel Osilama, who is also V. P. Redan North Central, has also expressed his dissatisfaction with the sluggishness of the Nigerian real estate sector, 64 years’ post-independence. These are his submissions.
ESV Osilama said the Nigerian mortgage system, despite its original intent, has fallen short of its potential due to several significant challenges which he listed as:
* Inadequate Funding: The system lacks sufficient capital to support widespread demands on homeownership.
* Consumer Lack of Awareness: Many Nigerians are unfamiliar with mortgage options and processes.
* Mortgage Provider Accountability Issues: There are concerns about transparency and reliability among mortgage providers.
When asked to access the numerous Interventions from both past and previous governments to mitigate the housing deficits and boost the housing sector, Osilama said, an attempt to describe all the various government interventions as complete a failure will be unfair to some of the successive governments, who may have good intentions at the formulation of each of their policies but ended up like others. In His words “ I would say bad implementation of government policies are the bane of all our mortgage problems, i will mention a few of them.
“Land Tenure Challenges: The Land Use Act of 1978, while intended to streamline land ownership, has instead created complexities and hindered homeownership.
* High Cost of Land: The prohibitive cost of land, often exceeding 30% of a completed home’s value, this makes mortgage financing difficult.
* Bureaucratic Land Title Processes: Obtaining land titles is often time-consuming, expensive, and fraught with bureaucratic hurdles.
* Rising Building Material Costs: The increasing cost of construction materials has led to abandoned projects and higher housing prices.
* Forex Crisis: The devaluation of the Naira has made imported building materials more expensive, further impacting housing affordability.
* High Mortgage Interest Rates: Current interest rates are too high for many Nigerians to afford, limiting mortgage accessibility.
* Lack of Social Investment: The government has not fully embraced housing as a social investment, hindering its ability to provide affordable options for Nigerian workers whose minimum wage cannot afford a mortgage equity contribution.
According to ESV Osilama, to address these challenges, several key reforms are necessary, including:
* Land Tenure Reform: Streamline land ownership processes, reduce bureaucratic hurdles, and promote land use planning, and this is only possible by reviewing the land use Act through National Assembly.
* Mortgage Refinancing: Establish a more effective mortgage refinancing system to provide liquidity and lower interest rates.
* Government Social Investment: Prioritize affordable housing as a social investment, implementing policies that support low-income homeownership.
* Building Material Production: Promote local production of building materials to reduce costs and ensure quality, by encouraging NIBBRI.
* Forex Management: Implement measures through CBN to stabilize the Naira and reduce dependence on imported materials.
* Public-Private Partnerships: Foster partnerships between the government and private sector to increase affordable housing supply.
By addressing these issues listed above, Nigeria can create a more accessible and sustainable mortgage system that enables more citizens to own their homes.
Conclusively, Given the scarcity of affordable housing in Nigeria and the rate at which it is dwindling, it is becoming increasingly important for the Nigerian government to urgently incorporate actions to their numerous interventions. Though the government has made previous attempts, these efforts have been insufficient, particularly for low-income and middle-class families, and the objective has not been realized since many individuals in need of housing are unable to afford it
The United Nations estimates that Nigeria’s population will reach 400 million by 2050.
However, for Nigerians, especially the middle-to-low-income earner, what is important is a streamlined sector that makes it possible to own decent homes that provide shelter, safety, and dignity, with funding opportunities that are sustainable and affordable.
