Reasons govt policies don’t translate to growth in housing sector
For reasons other than lack of basic infrastructure, high cost of funds, regulatory hiccups, etc, government’s policies and programs in Nigeria have failed to translate to growth of the housing sector, leaving the country with an ever-widening housing demand-supply gap.
Another major issue with housing sector growth in Nigeria is rural housing. Some experts are of the view that housing deficit in Nigeria is an urban problem. Babatunde Fashola, Nigeria’s minister of works and housing, holds this view strong. Fashola believes that there is no housing deficit in this part of the country, explaining that many houses are lying empty in many towns and villages in the country.
But Ayo Iluyomade, chairman, Aimart Realtors International, says the issues with rural housing in Nigeria are not only that rural development is poor, but also because rural housing is of low quality and this spreads across locations, quality levels and value of property.
He adds that rural housing suffers deficiencies in areas of social services like electricity, water supply and transport facilities, leading to what Roland Igbinoba, CEO, Pison Housing Company, calls qualitative housing deficit.
High rate of urbanization and ever-increasing population of urban dwellers are also part of the reasons Nigeria’s housing sector remains in negative growth territory. Lagos, Nigeria’s commercial capital, for instance, is said to have an estimated 20 million people with growth rate put at 3.2 percent per annum.
Iluyomade links the slow growth in the housing sector to these reasons, noting, “housing in Nigeria has not ranked high on the scale of priorities for social spending and this has been clearly reflected in the minimal efforts put into providing low-cost housing both in rural and urban areas.”
He noted further that the creation of the Federal Mortgage Bank of Nigeria (FMBN) in 1977 did not make much impact because, according to him, there have also been such limiting factors as lack of effective planning, uncontrolled private sector participation, weak institutional frameworks, poor research and development in the housing sector, sometimes, inflation, income policy and socio-economic trends.
The realtor recalled that since 1991 when one of the country’s latest housing policies was launched, there have been policies and programs aimed at delivering mass housing as a path to Nigeria’s economic recovery.
“NHF was established in 1992 to nurture and maintain stable affordable housing financing overseen by the FMBN. The current administration has launched the Economic Recovery and Growth Plan (ERGP) to stimulate the economy through agriculture, housing construction, food security, renewable energy, infrastructure, manufacturing and the digital economy to create jobs,” he said
He added that the establishment of the Economic Sustainability Committee (ESC) led by the Vice President in response to COVID-19 effect was aimed to deliver a massive housing programme with a timeline of 12 months and an estimated cost of 317,292,377,973.48 with the expectation that the strategy would create 1.8 million jobs.
“The Federal Ministry of Works and Housing, FMBN and the Federal Housing Authority (FHA) are the government bodies to co-ordinate the delivery of this strategy,” he informed.