With nearly 200 million people, Nigeria has the largest population in Africa, and it is the 7th in world population ranking. In spite of this huge population, the country has struggled over decades to come up with a sustainable action plan that will reduce the incredible housing gap in the country.
Governments in many countries take the responsibility for the provision of housing through a mortgage financing system that simplifies home ownership for employed citizens, and a social security system for the unemployed. And this is why China with a population of 1.3 billion people has a housing surplus yet Nigeria with a population of about 200 million has a housing deficit.
According to multiple housing surveys conducted since 2011, there is over 20 million housing deficit in Nigeria. Generally, housing has been a major challenge in Nigeria for decades and there seems to be a preponderance of ineffective or motionless housing policies that has led to the inability of government to address the housing challenge.
In 1991 the government of Ibrahim Babangida promulgated the National Housing Policy, which was aimed at making housing affordable for Nigerians. As a result of the ineffectiveness of the policy in completely addressing the issues, a committee was set up in 2001 to provide a new housing policy. The report of the committee culminated in the New National Housing Policy of 2006. Yet, that policy despite the breadth of its input did not solve Nigeria’s housing challenges.
In 2012 the then Minister of Housing, Dr. Ama Pepple presented a new draft policy on housing to the Federal Executive Council. The policy sought to initiate a new paradigm to the existing housing policy.
The new policy proposed the collaboration between federal government and the private sector in the provision of one million houses annually in order to address the housing deficit of the country. In other words, the new policy sought to promote Public-Private-Partnership in housing for all Nigerians.
Although, the new direction encouraged the participation of the private sector in the housing sector, not much was implemented before the expiration of the Jonathan’s administration.
A New Direction with Family Home Funds
It is against this backdrop that the current administration under the leadership President Muhammadu Buhari and the Minister of Works, Power and Housing, Babatunde Fashola introduced new policy measures to address the housing challenges in the country.
The Family Homes Fund Limited is one of such new initiatives. The Fund is a partnership between the Federal Ministry of Finance and the Nigerian Sovereign Investment Authority as founding shareholders.
The Fund is the largest affordable housing-focused fund in Sub-Sahara Africa, leveraging its significant capital (in excess of N1trn by 2023) to facilitate access to affordable housing for millions of Nigerians on low to medium income groups.
Through strategic partnerships with various players in the sector and some of the world’s main Development Finance Institutions, the Fund has an ambitious commitment to facilitate and supply 500,000 homes and 1.5million jobs for the low income earners by 2023.
Beneficiaries of the project will enjoy a deferred loan for up to 40% of the cost of their home. For the first 5 years of the loan, no payments need to be made. From the 6th year, monthly payments will be made to start repaying both interest and capital to assist the purchaser.
The amount paid starts low and increases each year in gradual steps (average 6.5% per annum) in order for the HTB loan to be fully repaid by the 20th year, the same year the mortgage is expected to be fully repaid. To qualify, households will have earnings between N600k to N1.2m per annum and the new home must cost less than N7.5m.
An exception is made in Abuja, Lagos, Port Harcourt and Kano where the cost of a new home can be as high as N9m. Households benefiting from Loan Assistance will not be owners of a suitable home and will include one income earner who is under 35 years of age and does not have to be one of the people applying for the scheme or the loan but must be available to help with repayments.
The fund has recently completed the construction of 400 homes with an average cost of N3.5million in Grand Luvu, Nasarawa State – part of over 4,000 homes under construction in five states namely Ogun, Nasarawa, Kano, Delta and Kaduna.
A further 30,000 homes have been negotiated with development partners and have commenced since November 2018.
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As the new company builds capacity through the ongoing recruitment campaign, it will achieve a program of 80,000 homes by December 2019.
FHF and Creation of New Jobs
Ongoing investments are already making a real difference with over 13,000 jobs created and about 360,000 to be created from current development pipeline. The Grand Luvu Project in Nasarawa State has created about 8000 jobs.
Many young people, especially those who were previously unemployed have been able to obtain training on the Funds Grand Luvu project, acquire valuable skills with guaranteed long-term employment and income to support their families. Same goes for the unskilled unemployed youths who depend on their family until they were employed as masons or carpenters on the project sites.
In Kaduna, the Millennium City project has directly engaged slightly over 200 persons which includes local artisans including carpenters and brick layers. The construction need for accountants, surveyors, engineers, etc. has created a lot of jobs since commencement.
According to officials of the fund “Our focus is to create homes that people, particularly those on low income can afford but beyond that, ensure that we provide opportunity for them to earn decent wages consistently through our investment in these projects.
“We have spent the last year building very strong foundations for a major take off and now we should start seeing the results in affordable homes and jobs for local people.”
Sustaining the Tempo
A noticeable pattern over the decades in such housing projects in Nigeria has been the counterproductive interference of politics, bureaucracy and corruption. Given the current level of performance by the Family Home Funds, and with credible projections for greater success, the wheels can only slow down if the government allows the intrusion of intervening variables that have always shortened the lifespan of housing development.
Government should ensure that its quality control officers are incorruptible and cooperative with the project leaders at Family Home Funds for the sake of harmony and the deliverance of testable results.
The current government has shown a commitment to fighting corruption, and it is the hope of many, especially Nigerians who will benefit from this project that corrupt civil servants and politicians do not have opportunities to exert themselves and their vested interest against the will of the people.
Obviously, Family Home Funds possess the technical and logistic abilities to deliver these projects, it is therefore very important for the government to ensure credible partnership.
Family Home Fund’s Deserved Accolade
For Nigerians who had totally given up hope of ever owning a home of their own, especially because of cost, this is definitely a new era of hope. Times are changing and homes are being built, just as jobs are being created.
Many Nigerians on low income have always been unable to buy a home either because they do not have sufficient savings for a deposit or are unable to meet requirements for a mortgage. The Family Homes Funds intends to set up a Rental Housing Fund to give Nigerians on low income a first step on the housing ladder. When the Fund is launched, eligible beneficiaries will be able to lease a decent home for a monthly cost not exceeding 40% of their household income including an option to buy the home at any anytime.
It is the expectation of many that Family Home Funds do not fail Nigerians. If Nigeria must close its housing gap and catch up with other countries, then Family Home Funds has brought a timely intervention that must be sustained with utmost commitment.
By Ojonugwa Felix Ugboja