Challenges of Nigeria’s housing sector: The way forward
THE housing challenge in Nigeria has been endemic. Although we possess all the key factors for real estate investment and growth, such as a burgeoning middle- class population, growth in consumption, rapid urbanisation and a young demographic, the housing sector in Nigeria, for obvious reasons, has not been able to contribute positively to the nation’s Gross Domestic Products ( GDP) over the decades.
The crisis in the sector is not in isolation of challenges in the other sectors of our economy though. But narrowing our national challenges down to housing, you will identify several daunting, but surmountable challenges. It is either the challenge is one of unavailability of serviced plots or plots of land that are not ready for housing development, lack of necessary basic infrastructure that will facilitate smooth development or a good title that will enhance the marketability of the land, especially after one might have to develop or build houses on it, they are not difficult to resolve.
A major impediment to housing provision and delivery is finance. Housing development is capital intensive, no matter the standard and scope of work you want to do in housing development; you need quite a lot of money to accomplish it. Unfortunately, housing has received very little in budgetary allocations in comparison to other sectors such as health, defence and agriculture. While about N2. 98 trillion, N1.17 trillion, N288.4 billion, and N1.08 trillion were proposed for the Defence, Health, Agriculture and Education ministries respectively in the 2023 federal budget, the Housing and Urban Development ministry got a paltry sum of N300.3 billion. The same trend has always been recorded in budgetary allocations in the previous years. To compound the challenge of finance is the absence of an efficient, comprehensive and organised mortgage finance system that would have granted easy access to housing. Thanks to the initiative of the Central Bank of Nigeria in collaboration with the World Bank to set up the Nigeria Mortgage Refinance Company Plc ( NRMC) which is expected to boost mortgage financing and home ownership schemes in the country. Someday, I hope that the generality of our people will be able to access mortgage facilities. Nigeria’s level of development is another challenge. We are still glued to the traditional way of mortar and bricks, which takes a long time and does not take cognisance of the high rate of population and urban growth. In other words, the technology and expertise required for the construction and development and, technology required for mass housing for the teeming population are lacking. We lack the capacity, the technologies and system constructions that can throw up a lot of housing units within the shortest period.
Going forward, the housing sector must be properly regulated and its activities coordinated to address low- quality housing development and the absence of mass and affordable housing. There should be regulations. We must checkmate infiltration of the sector by land speculators and non- professionals. There is a need to identify professional real estate developers just as it is being done in other climes such as the United Arab Emirates, America and the United Kingdom. Failure to do these is dangerous to the sector and might even put the practitioners in confusion.
The Federal Government needs to embark on research and development and come up with a sound policy on housing. The government must create an enabling environment for professionals and the private sector to drive the sector and also allow the local governments to complement housing. Until the real estate sector becomes an industry, we will not solve housing problems and challenges.
A major hindrance to housing development which we all know is the Land Use Act. That is why the Nigerian Institution of Estate Surveyors and Valuers has been calling for a review of the Act, and this cannot easily be done until it is removed from the Constitution. In the interest of Nigeria and Nigerians, we need to review the Land Use Act.
The challenge of ineffective housing finance must be sorted out in as much as it would be impossible to segregate finance from housing. We must address the fundamentals of the poor economy.
The government need to strengthen its legal and regulatory framework for mortgages, including property rights, land registration, and foreclosure procedures to enable a virile and robust mortgage system. Unambiguous property rights, fast land registration processes, and well- defined foreclosure procedures can give lenders and borrowers better security, perhaps leading to additional mortgage lending.
Last line
There is no waiting for a better time to deploy technologies into housing construction and development. It is time to embrace innovation, time to embrace and prioritise transformational technologies if we are truly desirous of building for the future and desirous of anchoring sustainable development in the housing sector. The prospects are there for the industry to thrive, there are huge opportunities for development within the real estate sector , but those opportunities can only be realised by conscious efforts of government, professionals and private sector commitment to realising them.