Addressing Nigeria’s housing challenge
Despite the Federal Government’s promise in 2016 to address the nation’s housing challenge through mass housing, not much has been done in that direction. President Muhammadu Buhari had at the time said his government would build 5,000 housing units in every state, every year for the next three years, for the use of public sector workers. Nigerians are waiting for the fulfillment of that promise.
In August last year, the government announced that it had commenced mass housing projects in 33 states across the country. Since then, not much has been heard or seen of the houses. In the 2018 budget, the Federal Government earmarked N35.4 billion to address the housing needs of its workforce under the National Housing Programme. With the enormity of the nation’s housing problem, the 2018 budgetary allocation to housing is inadequate. Whatever the 36 state governments budget for the sector is also not likely to make much impact on the housing gap.
Statistics on housing show that Nigeria, with an estimated population of 170 million people, has housing deficit of 17 million units. The World Bank, in 2016, projected that it would cost the country about N59.5 trillion to address the deficit. About 108 million Nigerians are estimated to be homeless, based on an average family of six people per housing unit. While Nigeria needs to build about 700,000 housing units every year to bridge the housing gap, the country barely builds 100,000 such units per year.
Apart from being a basic need of life, housing is a right of every citizen. It is one of the three necessities of life. In fact, Article 25 (1) of the Universal Declaration on Human Rights to which Nigeria is a signatory clearly states, among others, that: “Everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing, medical care and necessary social services.”
Many Nigerians are denied this right to standard housing. A situation where some Nigerians live under bridges because they have no place to lay their heads is unacceptable. It is interesting that China, with a huge population of over 1.3 billion people, makes deliberate efforts to ensure that all its citizens are provided with adequate shelter. It is a sad commentary on governance in Nigeria that virtually all our successive governments made promises to solve the nation’s housing problem but failed to do so. Good housing is necessary for good health and sanitation. It goes a long way in raising the living standard of the people. Nigeria should borrow a leaf from other developed countries on how they tackled their housing deficits. Government should stop paying lip service to the problem.
One of the factors strongly militating against mass housing for Nigerians is the lack of an adequate mortgage finance system. Housing statistics show that Nigeria’s mortgage finance industry (as a share of Gross Domestic Product (GDP)) is gravely low at 0.5 per cent when compared with other countries such as UK (80 per cent), US (77 per cent), South Africa (31 per cent), and Ghana (2 per cent). Sadly enough, housing and construction sector accounted for only 3.1 per cent of Nigeria’s rebased GDP in May 2016.
Also, the rate of home ownership in Nigeria is reportedly the lowest in Africa at 25 per cent. Available statistics show that Nigeria’s home ownership rate is much lower than those of countries such as Singapore (90 per cent), Indonesia (84 per cent), Kenya (73 per cent), US (70 per cent), Benin Republic (63 per cent) and South Africa (56 per cent). Interest rates charged by banks on real estate mortgage range from 20-30 per cent, with a short tenor. It is also reported that property developers can hardly access any loan from commercial banks at less than 28 per cent.
To resolve the nation’s housing challenge, bank loans for housing should be single digit, with longer tenors. Government should also prioritise the construction of affordable housing units for the masses. Most of the current housing schemes in the country are designed for affluent Nigerians who can pay deposits running into millions of naira. There is the need to embrace the Public Private Partnership (PPP) model in solving this problem.
Former Lagos State Governor, Lateef Jakande, left an indelible legacy in affordable mass housing that is worthy of emulation by today’s leaders. Government should overhaul the nation’s mortgage system to make it suitable for the funding of massive housing projects.
Author: Uche Atuma