The Central Bank of Nigeria, CBN, and stakeholders in the housing sector of the economy have agreed to develop mass and affording housing with a view to abridge the 17 million housing deficit confronting the nation.
The stakeholders, who reached the agreement during the 2018 Mandatory Continuing Professional Development, MCPD, in Abuja, pledged to work together towards ensuring development and growth of housing sector in order to grow the economy and prevent the nation from relapsing into recession. Recall, a former Deputy Governor of CBN, Mr Godwin Emefiele, recently warned that the weak economic fundamentals currently being shown by the economy were putting the nation’s exit from recession under fresh threat. Speaking at the MCPD seminar organized by the Abuja chapter of Nigerian Institution of Estate Surveyors and Valuers, NIESV, with the theme “Post economic recession in Nigeria-harnessing the potentials of real estate sector for a sustainable economic development”, the stakeholders collectively resolved that housing sector has important role to play to strengthen the country’s economy.
In his remarks, the Deputy Governor, Corporate Services, Central Bank of Nigeria, Edward Adamu explained that the bank as part of effort to increase access to affordable housing and address the 17 million housing deficit has in the recent past set up a National Housing and Mortgage intervention fund. Adamu noted that “In addition to its core mandate, CBN has taken up a developmental role in the economy.
All the intervention institutions and programmes are aimed at channelling resources to sectors that are vital to the strategic economic development of the country but are either not served at all or are under-served at a prohibitive cost by financial institutions because of perceived high risk or long gestation period. He said, “There is a huge housing deficit of 17 million units. The demography tilts towards the youths – 42% of population is 14 years and below. 75.2% are less than 35 years of age and high rate of urban migration – 50% and growing. He said the reason for the intervention is because of the present low contribution of Mortgage to GDP (less than 1%), against the Ghana’s 10%, and South Africa 40%. Adamu while enumerating potential to unlock the housing production value chain, said the process would guarantee employment, wealth creation and social stability.
In his presentation, the Chairman Premium Pension Limited, Arc. Yunusa Yakubu, said the Nigeria’s real estate sector is evolving at a remarkable pace and there is a growing awareness at all levels of the role of real estate development in the growth of the economy.
According to him, “As at the second quarter 2018, the Nigerian real estate sector accounted for 6.83 percent of the country’s gross domestic product. “Available statistics reveal that Nigerian housing deficit is estimated at between 17 to 20 million units, increasing annually by 900 000 units, with a potential cost of N6 trillion (US$16 billion). With a population of almost 190 million, annual population growth rate of 2.8 per cent, annual urban population growth rate of 4.7 per cent according to data from the United Nations, we need to stop talking and start building. “Nigeria’s abysmal ranking on the mortgage finance scale shows that the several mortgage financing initiatives by successive governments in the country have not really produced the desired results. “Clearly, the government needs to buckle up in order to meet it stated annual production of one million standardized affordable housing units. Nigeria has a low home ownership rate of 25 percent, lower than that of Indonesia (84 percent), Kenya (73 percent), and South Africa (56 percent).
“The real estate sector is full of opportunities and access to finance remains a significant challenge. Page 3 of 5 Prospect of Pension Funds as a New Vista in Real Estate Finance Experts in the real estate sector have argued that to bridge the gap in the housing sector, investors need to move beyond focusing on short term drivers to long term funding.” In his presentation, Abubakar Abdulkadir, an estate surveyor and valuer, noted that there is need for reform of laws regulating real estate or property cannot be over emphasised. He explained that, “This must be done if we want the real estate sector of Nigeria’s economy to develop and contribute positively to the nation’s GDP which will ultimately improve the quality of lives of the citizens of this country.”
Source: Chris Ochayi
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