It has been 59 years since Africa’s most populous country Nigeria gained independence. On 1st October 1960, the former British colony was established as an independent state – free to pilot the affairs of a promising young nation that was on the threshold of a booming oil industry.
With 45 million people at independence, the United Nations estimates that Nigeria’s population is now set to double by 2050 to around 400 million people – from current 200 million – which would make it the world’s third-largest nation, behind India and China.
In spite of a retinue of housing policies and programs, Nigeria has estimated housing shortage of 22 million units while newly built luxury dwellings are springing up throughout cities – made possible often through the forced eviction of poor communities.
The current housing gap and magnitude of informal dwellings in Nigeria is so bad that the United Nations have even described it as a human rights violation.
A combination of factors including rapid urban migration, lack of adequate funding for housing, political unaccountability, policy breakdowns, high interest rates, cost of building, land acquisition, and many others have left millions of Nigerians almost hopeless about ever owning their own homes.
To compound the situation, Northeast Nigeria has for the last decade been gripped by the insurgency waged by militant Islamist group Boko Haram that has forced around 2 million people to leave their destroyed homes. Because of this, the housing situation in Nigeria has been described by many stakeholders as a ‘crisis.’
Housing Interventions in Nigeria
The recorded history of formal intervention into the housing sector in Nigeria dated back to the colonial administration, after the unfortunate outbreak of the bubonic plaque of 1928 in Lagos. This necessitated the establishment of the Lagos Executive Development Board (LEDB). The Federal Housing Authority was established through the promulgation of Decree No. 40 of 1973 and begins a formal operation in 1976. Part of its responsibilities is making proposals to the federal government on housing and ancillary infrastructural services and implementing those approved by government. In 1977 the Nigerian Building Society metamorphosed to Federal Mortgage Bank of Nigeria (FMBN) which serves as the main engine room for public housing delivery with a dual function of both primary and secondary mortgage institution.
In 1981/82, A National Housing Programme was designed to provide 350 medium and high income housing units in each of the then 19 states of the federation by the FHA. This is in addition to the national low income housing programme embark by the government in all the state of the federation popularly known as Shagari low cost.
A proposed 40,000 housing units were to be constructed all over the federation annually with 2000 units per state including Abuja, the federal capital city. The estimated target for housing delivery under this policy was 200,000 between 1981 and 1985 but only 47,500 were constructed across the nineteenth (19) states of the federation including Abuja, the Federal Capital Territory.
An ambitious housing policy was launched by the then military government in 1991 with a slogan “Housing for All by the Year 2000 AD.’ The National Housing Fund, NHF – a product of the 1992 Housing Policy of the Federal Government of Nigeria which is a legal instrument for mandating individuals and government to pool resources into mass housing delivery – was initially meant to facilitate the now discarded vision of housing for all by the year 2000 AD.
The failure of these policies and programmes to adequately resolve the backlog of housing problems in the country led to the National Housing Policy (NHP) in 2006, but like others, the policy implementation proved deficient.
Under the current government of President Muhammadu Buhari, there are also a number of Affordable Housing Initiatives including The Federal Integrated Staff Housing (FISH) Programme (2016); My Own Home scheme (2017); The Federal Integrated Staff Housing (FISH) Programme (2016); National Housing Programme (2016); Family Homes Funds (2018).
Stakeholders’ Perspective on Housing Crisis and Call for Reforms
While current efforts are commendable, including what Nigerian Mortgage Refinance Company (NMRC) are doing with housing data collation and management, Ugochukwu Chime, the President of Real Estate Developers Association of Nigeria (REDAN) said that there is need for more concerted efforts.
‘’I think that the issue is lack of understanding of the emerging socio-economic trends that drive the housing provision in any clan. A lot of people have different opinions about why we haven’t been able to address decisions on sustainable basis. The reasons differ from who you are asking. Some would say land, some finance, some policies, some would say it is the developers, some would say it is the mortgage people, but I would like to say that it is from all of us in one way or the other.
‘’As a nation, we are in deficit of understanding and appraising the truth of our situation and what we really can afford. Those in positions of authority do not know exactly what the people need and how to address them. As a developer and as someone who has been in the industry for quite some time, I think the greatest problem we have is lack of political will to drive the system through, and insincerity on the part of those who have been in governance over the years. The greatest defaulter in terms of the challenges we had in housing provision has come from the government angle. A case in hand is how lands under state governments are being administered in a way that does not serve the population,’’ Chime said.
Similarly, Professor Charles Inyangete, the CEO of Integrated Risk and Investment Solutions Limited, and Former MD of NMRC agrees that data is not available sufficiently to drive policy.
He also blames Nigeria’s housing problems on lack of continuity.
‘’We are too short term in our perspectives. We take very short term perspective of things which leads to a lack of continuity even when we have a good policy. Successive governments do not see the good or the bad in the previous regime and look to improve upon them. We like to wipe the slate and start afresh and that lack of continuity means even good things tend to be abandoned regarding housing.’’
Inyangete believes that in spite of Nigeria’s economic benefits over the years from her resources, there is little to show for it, especially in the lives of the citizens.
‘’So we need to begin to look at our policy from the way it affects our people and we need to also be forward thinking in the way we design our policy. There should be the realisation that we are not building for today, but for the next generation.
‘’We also need to do that in a sustainable manner. We need to look at the impact of climate change on housing. Our coastal communities are being washed away. So we need to begin to design in ways that allows us to adapt favourably to climate change.’’
59 years after independence, Nigeria’s Housing Sector, according to the MD of Family Homes Funds, Femi Adewole, remains significantly underdeveloped.
According to him, even though recent interventions like the establishment of the NMRC offer hope for the future, the sector still lacks critical capacity across almost every part of its value chain.
‘’Regulatory environment is very weak, transaction costs are high and unpredictable, delivery capacity is poor and we are still largely building today in the same way we built almost 60 years ago – almost like technology never happened,’’ he bemoaned.
Given her potentials and resources, Nigeria boasts of the largest housing market in Africa, yet the most underserved. The mismatch between demand and supply has proven a great challenge to bridging the country’s housing gap.
One of the suggestions from Prof Inyangete is the need for Nigeria to embrace a digital economy. ‘’In today’s world,’’ he said, ‘’there are systems that can help you visualize the development of a house even before the first brick is put in. And I am not just talking 3D images. You can actually wear the IT gadget and see the various designs before you can make the adaptation for building and even its renovation. That’s the future of housing. Housing itself will no longer see the regular brick and mortar construction. We should start looking at modular development. The construction is faster, pre-fabricated and easier to standardize. We are seeing more and more of that happening around the world.
‘’Also, what is required now is for housing to be driven as a focal point. I’m advocating that we create a housing commission that will allow us to evolve policies for housing that address issues of the neediest group in our community which is the first time home owners. We are not doing much for them because of the affordability of housing. So if we have policies that specifically address first time home owners we will begin to drive down the impact of housing on the community and on society by making it more and more affordable.’’
Both Prof Inyangete and Ugochukwu Chime agree that some policies – notably foreclosure law, land use act and others – need to be looked into properly like many stakeholders have clamoured.
This opinion is also shared by the CEO of Abuja International Housing Show, Festus Adebayo. According to him, his experience as an industry operator gives him the conviction that there is a strong connection between strong policy frameworks and housing development.
If stakeholders can speak in unison, and with the will to imbibe the spirit of professionalism, as a complimentary role to a government that is genuinely committed and transparent, Adebayo believes that things could change sooner than later.
Speaking at the Inaugural Lecture of University of Lagos, Professor Timothy Nubi stated that a diagnostic review of the Federal Housing Authority (FHA) was conducted by KPMG – an international consulting firm in 2005 focusing on FHA’s mandate and operational framework. ‘’On the recommendation of KPMG report, a new mandate was approved by Government for FHA to henceforth, focus on social housing provision for low and middle income groups and special groups, e.g. physically challenged, elderly, widows, youths etc. The proportion of less privileged population with no shelter at all and the percentage of inhabitants living in slums and squatter settlements justify this. This number will continue to grow in the years ahead unless urgent remedial measures are taken to stem the trend. This informs the need for a viable option for mass housing provision in the country and this has been my research focus for the past 25 years,’’ he said.
The President of Nigeria Institution of Estate Surveyors and Valuers, NIESV, Roland Abonta who spoke with Housing Development Program believes that the most sustainable approach to fixing housing, like many other failing sectors in Nigeria is through strategic and proper planning. According to him, policies alone do not result to housing except they are backed up by strict adherence and purposefulness.
In spite of the challenges the country faces, a sense of optimism still rings in the tone of Inyangete, Adewole, Chime, Nubi and Adebayo.
Inyangete said that he sees a lot of new breed of developers who are really sensitive to the climate impact of what they are doing and the impact of sustainable development and the need for it. ‘’I also see the next generation, the millennial defining how they intend to live and these developers today are more inclined to the digital aspects which I see playing a critical role going forward, and Nigeria is by no means left behind. We have intelligent people who will be critical for running that process.’’
Femi Adewole believes too that there is strong hope for the future. ‘’There is a growing realisation,’’ he said, ‘’that housing and the construction sector can be a major catalyst for growth. We must do everything possible to support the Government in holding fast to this belief. One key development to look forward to is the development of institutional affordable rental housing. For that to happen I expect to see more collaboration and joint working between various market players.’’
Ugochukwu Chime assures that there is a very bright future for the real estate industry in Nigeria.
‘’We have come to see that working in silos is not going to help us. Collaboration is key. Through collaboration we have been able to establish the real estate data collection and management programme. Such collaborations reduce the cost for an individual or a single institution. Government too has also come to realize that policy and its execution are different things. That it’s better for them to remain in the realm of policy and leave the execution to technical experts with years of experience.
‘’A lot of things have happened and also Family Homes Funds have come in and they are moving quite well. We have Federal Mortgage Bank also moving in, and we are now taking the battle down to the states.
‘’So I believe we have a very good future where the hope of massive home ownership is there; the hope of using housing for employment, economic growth and for the general well-being of Nigerians,’’ he said.
Also, the MD of NMRC, Kehinde Ogundimu while speaking at the send-off of outgoing CBN Director Tokumbo Martins in Lagos, said that in the mortgage area, a lot of successes have been recorded, notably the mortgage interest drawback fund; the global standing instruction that will prevent non-performing loans from happening because there is now a hunting system that will go around to pluck incomes and funds from various accounts; Uniform underwriting standard and many more which he believes are a foundation to build upon
‘’As a nation. I think we are beginning to get things right as related to mortgage finance. Many states are beginning to either look into or adopt model mortgage and foreclosure law. Many states are beginning to even partner with NMRC and other stakeholders in the industry to push the mortgage agenda. In fact, the Governor of the CBN has now made mortgage finance one of the cardinal focal points of his five years agenda. So I see a lot of good things happening in the mortgage industry from now and going forward.
‘’As a nation, the main challenges that we have are still the high interest rates which makes mortgages unattractive, but the government is working on that and hopefully when we get the macro economic situation right, that will come down.
‘’The next thing is the enabling environment, especially the legal enabling environment which is the land titling system and the foreclosure law. We are the champions of that and we are glad states like Kaduna have passed that. Lagos is at the forefront. We are talking with Enugu, Edo and a few other states. So in the next few months, we will see a lot of things happening in that sector.
‘’So overall, I think the foundation has been laid, and from now on we will just be going forward in high speed that will make Nigerians able to afford mortgages to get their own homes,’’ he said.