Nigeria’s 30,000 housing units annual output only 6% of MDG requirement

Apparently, the housing situation in Nigeria gets more frustrating with each passing day, more so with a recent revelation that both public and private sector initiatives deliver just 30,000 housing units annually, representing only 6 percent of the 500,000 units Millennium Development Goal’s ( MDG) annual requirement.

Worse still, the 30,000 units annual output is only 3 percent of the 1,000,000 housing units needed annually for 17 years in order to close the 17 million housing demand-supply gap which, analysts say, may have gone beyond that figure given the country’s 2.5 percent annual population growth rate.

Nigeria is touted to be the most populous black nation with a population of over 160 million, growing at an estimated 2.5 percent annually with an urbanisation rate also estimated to be in the region of 4 percent to 5 percent annually.

The country’s housing stock is said to be a little above 10 million units while over 80 percent of this stock is self-built or bought outright from personal savings due to near-absence of a functional and affordable mortgage system.

Though some analysts see the Federal Government’s collaborative effort with the World Bank to establish a Nigerian Mortgage Refinance Company (NMRC) as a new dawn for the housing sector in the country, others have their reservations, describing such effort as an “attempt to cut an iroko tree with a pen knife”.

Whereas Sonnie Ayere, managing director of Dunn Loren Merrifield and one time principal adviser to Nigeria’s Debt Management Office (DMO), sees opportunities and possibilities in the company, especially for the primary mortgage banks, Chike Obi, the managing director of the Assets Management Corporation of Nigeria (AMCON) thinks differently.

Ayere explained at a forum in Lagos that apart from ensuring there is liquidity as well as a strengthened secondary mortgage market, NMRC is structured to lower the cost of borrowing, adding that it is also structured to ensure 13 percent interest rate on a 10-year bond and 10 percent interest rate for a 10-year mortgage just as it would make 20-year mortgage a standard practice in the country.

Etiwe Uwa, the chairman, board of directors of Trustbond Mortgage Limited, also sees opportunities for the mortgage sector through the up-coming mortgage refinance company.

Uwa told BusinessDay in an interview that the $300 million from the World Bank may not be enough, but is not going to be the only source of funds for the company, hoping that when it takes off, there will be other sources of fund.

“Even at that, it is a lot better than where we are currently, where there is no mortgage refinance company in the country, making it very difficult for the mortgage institutions to lend money to home loan applicants”, he said.