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Opinion, Real Estate

Making Good Campaign Promises on Housing

Because Nigeria is a country where, it seems, anything goes, it is easy for politicians to make spurious promises and never fulfil them. Housing is one of such promises.

Muhammadu Buhari as the presidential candidate of the ruling All Progressive Congress (APC) promised, during his campaign, to provide one million housing units every year as part of efforts to fix the housing problem in the country.

That promise remains unfulfilled four years after and may remain so for another four years simply because government has never tackled the problem the right way. Experience in Nigeria shows that, in matters of delivering mass housing, government is not a good “business man”. The government’s approach to housing as encapsulated in the minister’s blueprint tends towards welfarism which, in our view, does not work. It is difficult to determine how many people government has to build houses for, and which state needs houses the most.

Government’s interest in housing should be focused on developing a housing policy which will assist millions of citizens to obtain mortgages at decent interestrates. This is how most citizens acquire houses in countries with successful housing policies such as Singapore, South Africa and Malaysia.

The housing situation in Nigeria is dire. There is a supply gap of over 20 million units and the level of home ownership is a little above 10 percent as against about 30 percent in South Africa, over 60 and 70 percent in US and UK respectively.

Singapore, a once poor island in Southeast Asia, evolved from a third to first world economy between 1965 (when it gained independence from the British) and 2000. Under Lee Kuan Yew, the country’s first Prime Minister, the government transformed huge swathes of urban sprawls and slums into well-planned cities that spurred economic dynamism and growth.

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The country changed its housing story by simply creating a pool of funds into which everybody contributed monthly and from which everybody borrowed to buy flats or houses. That model succeeded not by magic, but because the government was determined, through a deliberate policy, to make it work. Government is expected to “top up” these contributions with, at least, N10 billion every year.

A pool of funds into which all workers must contribute 20 percent of their salary and from which they can also borrow to buy houses could be the impetus for 20 to 30-year low interest mortgages in Nigeria.

As things stand the president risks being remembered for overseeing the descent of Nigeria into the poverty capital of the world. This narrative can be changed with policies that enable private estate developers build more houses and, by so doing, generate jobs for unemployed Nigerians.

Sani Abacha is on record as a maximum ruler in Nigeria but he made a mark with the take-off of the Nigerian Liquefied Natural Gas (NLNG) which contributes today about 4 percent to the GDP.

Despite his undemocratic antics as president, Olusegun Obasanjo as was responsible for telecoms revolution, pension reform and the Fiscal Responsibility Act as well as reduction of foreign debts, among others. Goodluck Jonathan as president was adjudged clueless but he kick-started the privatisation of the power sector.

What mark, therefore, should Nigerians expect Buhari to make on the economy, beyond the minimal strides in power and infrastructure? The Buhari administration can replicate in the housing sector what Obasanjo did in the telecoms and pension sectors. But he must allow the private sector lead the way.

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Source:  Businessdayng

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