Experts score housing sector low, suggest way forward

Adequate housing remains one of the basic needs of man, and the aspiration of every Nigerian. The facts on ground indicate that 53 years after the nation’s independence, housing is still out of reach of the average Nigerian. DAYO AYEYEMI reports.

As government rolled out drums to commemorate the 53 years of Nigerian Independence recently, built environment experts have continued to take critical look at the nation’s achievement in meeting the housing needs of the populace.

By and large in the last 53 years, they agreed that little progress has been made, but a lot more could have been done.

The challenges of housing in Nigeria are numerous but the key problems remain lack of access to land, high cost of construction, political instability, policy summersault, high interest rates, lack of virile mortgage sector, high cost of development permit/approval, inadequate infrastructure development , poor saving culture of the people, job insecurity, poor salary, lacks of enabling environment and political will. Non availability of statistics in the housing sector has also remained a problem.

Till date, it is difficult to obtain the number of houses constructed annually in Nigeria, talk less of knowing their types. Data about the average number of houses required in Nigeria annually range from 75,000 units – 250,000 units.

The statistics needed to help plan and project housing needs not only for the present, but also the future is lacking. Unanimously, many housing experts agreed that the nation is not lacking in terms of formulations of policies since independence to ensure that Nigerian are well housed, but inability to implement the policies has always been problematic.

53 years of nationhood, the mortgage sector is performing at low ebb, building materials sub sector is in shamble due to lack of standards, preference of foreign goods and high cost; while the housing deficit stands between 16 and 17 million units with little or no effort to bridge the gap. The nation has witnessed many seminars, workshops and conferences about housing issues with little or no action to walk the talks.

The available units built by government and developers are beyond the reach of the targeted groups due to high cost, while cash and carry syndrome gained prominence in the nation’s housing market. It is also noted that the retail segment of the housing sector is gaining popularity by the plethora of shopping malls and hotels dotting the landscape of major cities in the country.

But, according to a survey by UNHabitat, between 30 per cent and 70 per cent of urban dwellers in Nigeria live in unplanned or informal settlements also called slums. Immediate past President of the Nigerian Institute of Building, Mr Chucks Omeife blamed lack of political will for the nation housing shortage. Principal Partners, Akin Olawore and Company, Mr. Akin Olawore, noted that at independence, there were fewer people requiring housing in the urban centres and that there was no issue with rural housing.

“There was fewer and manageable population,” he said, pointing out that the then government rose to the occasion and provided housing, access to affordable finance and many other. But today, he noted that the nation’s population has exploded, while existing infrastructure is failing coupled with global inflation and loss of economic competitive edge.

All these factors, he said have combined to overwhelm the government, leading to incoherent policies. He also recalled that though the private investors provided retail housing, but noted that their efforts were only a drop in the ocean. To overcome the problem of housing shortage in Nigeria, Olawore said there is need for political will and love of people to confront the issue.

President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Emeka Eleh, called the Federal Government to carry out holistic reforms of the mortgage sector and enhance land accessibility to achieve the set target of constructing one million houses per year to bridge the nation’s housing deficit Also , other experts lamented that the nation’s mortgage financing is yet to have any meaningful impact on Nigeria’s housing sector.

The sector had not been able to attain its potential of becoming a national income earner as a result of this challenge. Some of the experts in the sector noted that mortgage finance was contributing less than one per cent to the Gross Domestic Product in Nigeria.

This, they said was a sharp contrast when compared with what was obtainable in some emerging markets.. They recalled that the Central Bank of Nigeria (CBN) introduced some measures to reform the mortgage sector in 2006 with the aim of galvanising it over a period of five years. However, they lamented that that the move could not achieve the desired result due to the quantity of funds at the disposal of the operators in the industry.

Proposing way forward, the expert suggested that idle funds such as unclaimed dividends from the capital market could be pooled together to kick-start low interest mortgage financing. The Minister of Finance, Dr. Ngozi Okonjo – Iweala , confirmed recently that the government had established a Mortgage Refinance Company to make it possible for many Nigerians to own their own houses at affordable rates.

The coordinating minister for the tion with a soft loan of $300 million under its International Development Association, IDA, concessionary lending window. Okonjo-Iweala said the Federal Government was also working on mass housing schemes with a rent-toown option for workers to reduce the housing deficit in the country.

According to her, the target of the first stage of the mass housing scheme is to increase the number of completed mortgages from the current 20,000 housing units to 200,000 units in three years. Also recently, a joint delegation of China Export and Credit Insurance Corporation (SINOSURE) and the International Commercial Bank of China (ICBC) disclosed plans to invest about US$6 billion in Nigeria’s rapidly evolving housing sector.

The Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Mr. Gimba Ya’u Kumo, the project was part of the moves by the bank to attract foreign investors into the capital-intensive sector. He said that the bank was promoting Public-Private Partnership arrangement in tackling a deficit of about 17 million houses in Nigeria.

According to him, the loan which would be given directly to Chinese construction companies in the country has a 15 to 20- year tenure, for disbursement in tranches of US$1.5 billion to build houses under the supervision of the FMBN. In order to reduce shortage of affordable housing in Nigeria, the Association of Housing Corporations of Nigeria (AHCN), penultimate week, during its meeting in Owerri, Imo State has called for the creation of Housing Trust Fund (HTF) so that untapped funds lying fallow in pension and insurance funds, unclaimed dividends and other related instruments could be harnessed to the real estate sector.

The association’s president, Dr. Ifenna Chukwujekwu, lamented that the existing funding arrangements for the provision of housing in Nigeria was grossly inadequate, pointing out that when HTF is created, it would complement the National Housing Fund (NHF) to fast track housing development He enjoined the three tiers of government to be proactive and take advantage of the PPP to increase housing stock in Nigeria.

They tasked the government to provide the enabling and conducive environment for a private sector driven housing provision through the concept of PPP for the success of the ongoing housing reforms.

While making case for sustainable strategies that would increase the housing stock for affordable home ownership for the people, the group noted that major problems of housing were rooted in lack of political will and commitment to invest in housing, “and lack of holistic approach to housing matter which give rise to lack of finance, high cost of building materials and high infrastructural development cost.” The association called for re-engineering of the nation’s mortgage system for effective and liberal mortgage loans administration for home acquisition for the people.

Besides, the association also canvassed increased funding into the mortgage market through long term financing from local capital market and external group. With the availability of cooperative housing finance window in Federal Mortgage Bank of Nigeria(FMBN) for provision of mass housing, the association urged all stakeholders in the real estate sector to take advantage of the window to provide affordable housing for the people.

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One Comment

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