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Driving Sustainable Housing Finance

Housing and financial experts are not leaving any stone unturned in their bid to unlock the potential in real estate sector and bridge accommodation deficit.

For Nigeria to bridge its housing deficit of over 17million units, construction of additional 900, 000 new houses will be required yearly for the next 20 years.

Besides, the nation would require N59.6 trillion to meet the housing gap of low and medium income groups, a huge amount which all stakeholders said would require collaboration of government and the private sector to provide.

However, better ways to tackle these issues and drive sustainable and affordable housing finance in the country were brought to the fore by stakeholders in a forum that took place in Abuja at the weekend.

The forum, themed: “Driving Sustainable Housing Finance Models in the Midst of Global Uncertainties,” saw both local and international stakeholders in the real estate and financial sectors sharing experiences and suggesting practical and alternative approaches to housing finance in the country.

The stakeholders comprised investors, developers, mortgage providers, building materials manufacturers, home builders, policy makers, legislators and other service providers.


After the three-day brainstorming sessions, the experts proffered best ways to tackle challenges confronting housing affordability, mortgage finance, high interests and building cost, multiple foreign exchange regime, access to land, people’s purchasing power and unemployment.

The Nigeria’s home ownership rate is pegged at 25 per cent, lower than Indonesia with 84 per cent, Kenya 73 per cent and South Africa 56 per cent.

Setting the tone, organiser of 13th edition of the Abuja International Housing Show, Mr. Festus Adebayo, urged all stakeholders to seek out alternative approaches to financing the dreams of providing every man with decent and affordable shelter.

He maintained that the forum was a medium to proffer practical solutions to the problems in the housing sector with far reaching effects across the continent.

“We are out to realise a housing sector that will not only shelter man, but contribute to Gross Domestic Products (GDP), provide jobs and economic opportunities,” he said.

Experts’ views

A former Deputy Governor of Central Bank of Nigeria (CBN), Dr Obadiah Mailafia, sought for the repositioning of monetary policies in order to serve the needs of real estate sector.

While canvassing for a new road map and blueprint for diversification of the economy, Mailafia sought for a holistic housing policy that puts families at the heart of the development process.

He challenged the private sector to become the engine of growth and transformation.

To overcome housing challenges, the former CBN deputy director enjoined government at all levels to upscale physical infrastructures.

He called on governments to build industrial clusters, hook up to global digital economy, enhance national competitiveness and fix electricity challenges.

He tasked the national economic team to showcase bold leadership as well as reinvent government as a smart and entrepreneurial developmental state.

Mailafia disclosed that planning and budgeting remained real challenges in the country, adding that the Federal Government’s budget for housing had been declining over the years.

The financial expert pointed out that a sum of N141 billion was budgeted for the housing sector in 2017, but declined to N35.4 billion and N30 billion respectively in 2018 and 2019.

Considering the huge sum of N59.5 trillion to close the housing gap, he said the CBN had been in talks with the National Pension Commission, mortgage firms and other stakeholders since 2018 to boost housing finance.

On CBN conduct of monetary policy in recent years, Mailafia said the apex bank focused on dual mandate, which captured growth and employment, massive intervention schemes, promotion of development financing and repositioning as a developmental central bank.

Some of the challenges in the sector, according to him, include high interest rates, crowding-out the private sector, multiple exchange rates, weak naira and erosion of independence and autonomy.

He said though the real estate has been growing fast and rated the sixth largest in the economy, the Nigeria’s home ownership rate was pegged at 25 per cent, lower than Indonesia with 84 per cent, Kenya 73 per cent and South Africa 56 per cent.


Managing Director, Overseas Private Investment Corporation (OPIC), Debra Erb, blamed lack of market data to plan, limited investment in technical innovation and difficulties in obtaining affordable mortgage loans for Nigeria’s housing problem.

The managing director of OPIC noted that affordable mortgage loans were difficult to obtain given high interest rates and lack of local sources of long term capital.

Erb maintained that it would be difficult to efficiently deliver large scale housing in unpredictable macro environment.

She said: “Lack of market data to plan, investment in technical innovation is limited in this sector, municipal utility capacity cannot keep pace with rapid development, affordable housing competes with more profitable segments, overall lack of professional housing developers specialising in affordable- are private sector limitations to housing.”

Executive Director of Brains & Hammers, Ifeoma Okoye, said the sky was wide enough for every developer to fly, urging the need to work on how to bring the cost of housing down for low income group.

“We are all pursuing the same goal of providing affordable housing for low and medium income earners whose demand for homes is obviously high,” he said.

Speaking on “sustainable development in Nigeria housing market – prospects for debt/equity financing through the capital market,” CEO, Exima Realty, Hakeem Ogunniran, maintained that real estate was a financing game and that Nigeria’s money market was largely unsuitable for housing development.

Funding through the capital market, he said, should be the focus, especially through bonds.

He said: “We can’t grow this sector when a significant chunk of the money is going back to government. We need to work assiduously on the issue of security of land titles. We need to also work on our legal and legislation framework. We must have a proper legislation for Real Estate Investment Trusts (REITS) to thrive.”

Affordable Housing and Mortgage Finance Advocate, Mr Kunle Faleti, called for capacity building and technical assistant to mortgage bankers for improved service delivery.

He pointed out that Nigeria’s mortgage bankers were ill-experienced since Nigeria is new to the world of mortgage banking.

President, Real Estate Developers Association of Nigeria (REDAN), Ugochukwu Chime, said that N60 trillion was required as mortgage to address the 17 million housing deficit at an average unit price of N3.5 million.

Chime called for an urgent need to create a national housing council different from the existing National Council on Housing domiciled in the Federal Ministry of Housing and dedicated to enhance the coordination of activities of professionals and organisation involved in the supply side of the real estate industry.

He called on the 36 state governments to enhance the ease of doing business in their respective domains.


The Managing Director/ Chief Executive Officer of Shelter Afrique Kenya, a Pan-African housing finance institution, Mr Andrew Chimphondah, stated the readiness to aid significant growth in Nigeria by investing over $180 million ( N650.9 billion) through lines of credit to financial institutions, issuance of mortgages and providing construction finance for public private partnership (PPP) projects in the next five years.

He said the investment was in line with its 2019-2023 strategic plan that will help in reducing Nigeria’s housing deficit and increase the supply of over 100, 000 housing units annually.

Chimphondah said that though there was housing crisis in Africa, but that professionals needed strategic contributions to reduce the deficit.

As at December 2018, the managing director said that Shelter Afrique’s portfolio in Nigerian market rose to $14.6 million, as the board approved the disbursement of lines of credit worth $16 million to two major financial institutions in Nigeria within the same year.

He assured that as soon as Nigeria’s macroeconomic environment stabilises, Shelter Afrique would commence the process of raising bond for the country, adding that efforts have been on ground to partner the Federal Housing Authority (FHA) on the Affordable Nationwide Housing Project (ANHP), aimed at providing housing units to low and middle-income earners.

Chimphondah maintained that impact of the project in over 46 sites across the country would reduce unemployment rate and create over 460,000 jobs.

The Senate President, Senator Ahmed Lawan, assured stakeholders of a number of housing policy reforms including the contentious Land Use Act.

Represented by Senator Ashiru Oyinlola, he said: “There are critical areas that require legislative intervention like the Land Use Act, the National Housing Fund (NHF), housing regulation, and many more enabling policies. It is in the agenda of the 9th National Assembly, especially the Senate to see to them and all policies required to get us closer to our collective dreams are achieved.”

Last line

Now that the die is cast, members of the organised private sector should collaborate with government and financial regulators to walk the talk.

Source: newtelegraphng

READ MORE:  On Rent Subsidies and Affordable Housing
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