Housing: Underdeveloped amid great potential

It may be difficult to sustain an argument that Nigeria’s housing system has not seen any positive change in the past 53 years of independence. However, given the tremendous change in demographics and the startling housing and homeownership situation and statistics in the country today, it could be safely said that the housing system in the country has remained fledgling even in the midst of great potential for growth.

At 53, way above middle age, Nigerians are still living in the open because, as against US 72 percent, UK’s 78 percent, China’s 60 percent; Korea’s 54 percent, and Singapore’s 92 percent, homeownership level in Nigeria is estimated to be a little above 10 percent.

With a growing population of over 160 million and high urbanization growth rate estimated to be in the region of 4-5 percent per annum, housing stock in Nigeria is said to be between 10 million and 11 million units while an unconfirmed record shows that about 25 million households of about six members each don’t have homes of their own, leaving the country with a housing deficit of about 16 million units. This deficit, according to experts, requires building 500,000 housing units yearly for the next 20 years and with a projected expenditure of N56 trillion to bridge.

Growing population and rising urbanization, anywhere in the world, are economic assets with great potential for the growth of the housing system, but in Nigeria these assets are scarcely harnessed due to the absence of a clearly defined policy and governance vision for housing development in the country. For us, it is a sad commentary on the rudderless leadership in this country that policy summersault runs through the entire sectors of the economy and our frustration goes deeper with housing considering that it ranks third in the hierarchy of human needs after food and clothing.

The National Housing Policy initiative which aimed to provide decent and affordable accommodation for every adult Nigerian was perhaps a follow up to the low cost housing initiative of the Shehu Shagari administration which, regrettably, was a colossal waste of the tax payers money as most of the houses were built in bushes and forests only accessible to, and inhabitable by lizards, rats and rodents.

We are totally in agreement with private sector involvement in housing delivery, which is why we commend the subsisting public private partnership (PPP) arrangement by both federal and state governments as a special purpose vehicle for housing delivery.

We are however, miffed that this otherwise laudable arrangement has turned out to a great fallacy as government is only paying lip-service to it. By their definition, PPPs are an arrangement in housing delivery in which government provides the enabling environment such as critical infrastructure and favourable policy instruments that aid the development of housing finance institutions, while the private sector provides the capital and the technical know-how for affordable housing delivery. Because government has always failed in keeping its own part of this arrangement, the private sector is having a field day, making housing development a cash-and-carry enterprise, only accessible and affordable by the very rich. By default, housing has become a privilege and not a right which it is supposed to be.

It is painful to note that achieving quick financial returns is what has been driving property development for residential and commercial purposes and this has been so because of the near-absence of a functional mortgage system in the country. The result is that out of the 10.7 million housing units in Nigeria, 10 percent is self-built, and only about 5 percent is in formal mortgage.

Though we are gladdened by government’s on-going plan to float a mortgage refinancing outfit, we nonetheless have our fears that the implementation and actual relevance may be jeopardized by the monstrous ‘Nigerian factor’ if appropriate care is not taken.

In our view, housing delivery in this country requires better and deeper vision, order, synergy, continuity, implementation and a sustainable pool of mortgage funds with a functional secondary mortgage market. With all these in place, we believe that the country’s mortgage and housing markets would be properly deepened and developed.