AU’s $200m pipeline investment in housing targets mid-income earners

The African Union says it is planning to break the jinx in Nigeria’s affordable housing market with a $200 million investment targeted at the under-served medium and low income earners in society.

The investment which will be executed in partnership with Shelter Afrique, the Union’s agency, will focus on providing the middle class a wide range of affordable homes within the next three years.

“Our strategy will be focused on affordable and mass housing for both the middle and lower segments of the society,” Mouhamadou Gueye, Business Development Director at Shelter Afrique, an agency of the African Union, was quoted as saying.

A large chunk of Nigeria’s growing urban population are un-housed as a result of lack of affordable housing and this population are found in major cities such as Lagos, Abuja, Ibadan and Kano where housing demand surges by about 20 percent annually.

A recent report by global property guide notes that building a house in Nigeria is too expensive when compared to other developing nations, pointing out that this is as a result of high cost of property registration, high construction cost and low access to mortgage facilities.

Ngozi Okonjo-Iweala, Minster of Finance, affirmed at a forum in Abuja that while building a three-bedroom house in Nigeria costs about $50,000, it costs $36,000 in South Africa and $26,000 in India.

According to Gimba Ya’u Kumo, the Managing Director, Federal Mortgage Bank  of Nigeria (FMBN), N56 trillion would be required to bridge Nigeria’s housing deficit, if it costs N3.5 million to build one unit.

Ibiza Adetunji Lams, the developer of Freshland Estates, in an interview with BusinessDay, attributed the high cost of housing in Nigeria to  a number of factors including high prices demanded by native land owners, cost of processing land documents plus internal revenue fees and land bureau charges.

Ibidire affirms that low-cost housing is disappearing from the cities, blaming the trend on the cost of providing basic infrastructure, especially roads in remote and virgin areas.

ODINAKA MBONU