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Affordable Housing

Affordable Housing: Using the Rwanda Model

If it is to go by the way of policies of successive governments on provision of affordable housing, Nigerians would have been the most housed in the world.

However, years after, these policies are still gathering dust, while homelessness among Nigerians has assumed a frightening dimension.

From 12 million housing deficit in 2007, the country’s accommodation shortage is estimated at between 17 and 20 million housing units in 2018 with a potential cost of N6 trillion ($16 billion) and a 900,000 annual unit deficit increase.

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Reasons such as lack of access to land, high cost of land and money, unfriendly interest rates, low income, lack of enabling environment, high cost of infrastructure, lack of virile mortgage institutions, lack of political will, bottleneck procedures associated with building approval/permits and title are among the factors reeled out by professionals and home seekers as major challenges to affordable housing in Nigeria.

While Nigerians and government are still trading blames, cheery news from Rwanda, a country trying to recover from the genocide of the mid-1990s, showed that the country has moved ahead others in Africa in the area of affordable housing for its citizens.

Rwanda’s housing programme

According to the Chief Executive Officer (CEO) of Workers Affordable Properties Limited (WAP) Rwanda , Mr. Kunu Harmony, there are factors responsible for Rwanda’s awesome performance and exploit. He pointed out that the goal was to achieve affordable housing for low and middle income earners.
To achieve the goal, he said that government, financial institutions, private developers and the home beneficiaries played major roles.

According to him, there is an housing policy, which defines expectations of affordable housing with government roles and what the developer’s roles are, adding that the authorities also set maximum cost and what the size of housing should be.

In a chat with Nigerian professionals in the real estate sector on Housing Development Group’s whatsapp platform powered by Festus Adebayo-led Fesadeb Communication Limited, Harmony said there was also a mandatory requirement for government to provide certain facilities once the project is approved to have met affordable housing programme in Rwanda.

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“The purpose is to ensure that cost of these facilities is not added to the cost of the housing units in order to keep the price of the housing units within the affordable range,” he said.

Example of such government support, Harmony said, included all external and major internal roads for the estate, water supply pipeline, electricity lines with transformers and fibrer optics, among others.

“However, if this is done by government, not everyone in the country qualifies for affordable housing units. Five conditions are provided in Article 8 of Rwanda’s law for government support for affordable housing,” he noted.

To qualify for the housing units, the CEO of Workers Affordable Properties Limited (WAP) explained that such a person must be a citizen or permanent resident of Rwanda and must be above 21 years of age.

The individual or her spouse, if married, must not have a house already within Kigali if the project is in Kigali and must be within certain salary range as set by prime minister every two years.

Also, the beneficiary cannot sell the house within 10 years, but can rent it out from date of purchase.


The developers noted that most times, affordable housing process was abused in many forms, pointing out that technically, the initiative has seven basic assessment criteria that must be tested country by country or region by region if the country is very big.

The criteria for assessing affordable housing, he said, must ensure that 85 per cent of building materials is sourced locally; beneficiaries have access to fund, application of technology, project financing interest rate, project management capacity ‘access to land and cost of land, and government policy supporting affordable housing.

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“If this is not done as initial assessment, obtaining affordable housing objectives for the targeted group may be difficult to achieve,” the CEO of WAP said.

On beneficiary’s access to fund, he noted that the World Bank and UN had defined affordable housing to target low and medium income earners, adding that the expectation is that not more than 45 per cent of salary should be spent on house need per month.

Another professional, Mr. Olatunde Adetayo, said that every sector in Rwanda was functioning well and properly regulated.

“The people understand where they are, what they have and equally what they lack. These are basic ingredients for planning,” he said.

According to Adetayo, the housing sector does not work in isolation; it works hand in hand with other government agencies to determine beneficiaries of housing units.

He said: “The key thing we must learn from Rwanda is that you should not attempt to bribe anyone to influence things or change records for undue favour.

“Let it also be known that Rwanda does not joke with its tax policies as it cuts across every sector, including land,” he said.


Talking about access to funds, Harmony listed two categories, which involve mortgage or construction loan programme from bank and government housing fund.

In Rwanda, he explained that mortgage loans were given for a near or finished house, why the grant of construction loan is different.

He said: “The construction loan interest rate is usually little higher than the mortgage loan interest rate. Some banks are still doing eight years repayment period while the banks we had alignment with have moved to 20 years repayment period.

“The interest rate for both mortgage loan and construction loan range from 15.5 per cent to 17.5 per cent, depending on the applicant risk level.”

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On government’s housing fund, Harmony explained that the loan was being provided to prospective homeowners through the commercial banks at a much lower interest rate that is less than 10 per cent for a period of 20 years with zero down payment.

“Target is low and middle income earners. The origin of this loan is from the World Bank to Government Investment Bank, which then disburses to the participating commercial banks,” he said.

Local material

To attain affordable housing for the populace, the developer enjoined Nigerian real estate experts to explore opportunities in clay.

He said: “One big aspect I think we can look for affordable housing materials is the large deposit of clay we have in Nigeria . Most houses in Europe and United State are made from fired bricks produced from clay.

“The fired bricks with the right technology produce very strong and beautiful bricks in different colours. One can also produce other house finishing items for roofing, tiles and others from that if you have the right equipment.”

He hinted that his company was currently in phase three of acquiring some production equipment, targeting production of over 150,000 bricks per day in Rwanda.

Last line

When there is will, there is a way. Nigerian government must show the way by providing the enabling environment for private sector to thrive in the provision of cheap houses.

Source:  Dayo Ayeyemi

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