Economy awaits FG’S 300,000 housing units intervention 12 months after
Nigerian economy, which is in dire straits at the moment, is still waiting for the Federal Government’s planned intervention in the housing sector as provided for in the economic sustainability plan (ESP) more than 12 months after that plan was inaugurated.
ESP is part of government’s responses to COVID-19 pandemic aimed to provide stimulus package to businesses and critical sectors. Housing was listed among growth sectors and the strategy was to provide 300,000 housing units yearly.
Expectation was that the construction of these houses would generate activities in the economy. The strategy envisaged the creation of 1.8 million jobs, starting in 12 months and subsequently creating 1.5 million homes for families across the country.
But 12 months after, it remains to be seen where these houses, which target low income earners, are being built. As a result, jobs are not being created, leading to more Nigerians falling into poverty.
About 82.9 million Nigerians were in poverty before COVID-19, according to the World Bank. On October 7, 2020, the bank said that Nigeria, with poverty rate of 39.1 percent, has the largest poor population (79 million extreme poor) in SubSaharan Africa, accounting for 20 percent of the total poor in the region.
According to the bank, 10 million Nigerians were forced into poverty as a result of COVID-19, adding that the country’s poor population is set to rise from 82.9 million in 2019 to 90.0 million in 2022 due to natural population growth.
But with the economic effects of the COVID-19 crisis, the national poverty rate is instead forecast to jump from 40.1 percent in 2019 to 45.2 percent in 2022, implying that 100.9 million Nigerians will be living in poverty by 2022.
This is an unfortunate and worrisome situation which, in part, would have been solved by the ESP strategy on housing and other growth sectors if it had been followed through as planned.
The strategy which got N200 billion lifeline from the Central Bank of Nigeria (CBN) is an ambitious one which was why it was hailed by housing sector stakeholders even though the 300,000 housing units, according to them, was like a drop of water in an ocean given a 20-million housing deficit.
“Federal Government’s decision to build 300,000 houses across the country and also to spend N2 trillion on rural roads construction is a welcome development that will positively impact the economy in various ways,” Femi Akintunde, GMD, Alpha Mead Group, noted.
“First, it is a form of reflationary measure that will stimulate economic output through increased spending in housing and infrastructure development. Such investment will create large scale employment, increase the stock of housing and the provision of additional road infrastructure will help to improve connectivity and ease our logistics challenges,” he added.
Among other things, the
ESP strategy aims at easing bottlenecks in the delivery of social housing and delivering affordable homes through direct government interventions in housing construction.
It involves working with state governments to identify land for housing construction in all local government areas and targets 100 percent local input for the construction of 400 homes in each local government area.
The project elements include standardising the design of homes for cost management and industrialisation of the construction process, identifying and selecting delivery partners formed by groups of professionals and artisanal builders as primary delivery channels as well as creating a ‘homes warehouse’ to buy completed homes from delivery partners, in the absence of ready off-takers.
Similarly, there were also plans for encouraging private sector involvement and facilitating maturity of the mortgage market that will cater to the needs of middle-class Nigerians while government addresses the needs of lowincome earners and the poor.
All these underpin the concerns raised so far by housing industry stakeholders on government’s delay and/or slow take-off of the intervention scheme.
Analysts’ views on possible causes of this delay are varied. While an economist who did not want to be named explained to Businessday that government did not have the needed money to build the projected houses, Akintunde blames structural dislocations in the housing sector financing structure.