Housing is recognized world-wide as one of the basic necessities of life and a pre-requisite to survival of man. Hence, the importance of providing adequate and affordable housing in any country cannot be overemphasized. As at January 2020, housing deficit in Nigeria is estimated to be 22miliion, according to Shelter Afrique. With this high deficit much has not be achieved in the area of housing provision in the country.
However, the Federal Government has been making concerted efforts in housing delivery intervention through various policies and programmes either as a provider in the 70’s and 80’s and as facilitator and enabler in recent time.
The country with a population of about 150 million have more than 50% living in urban centers (UN Habitat, 2008)
An ambitious housing policy was launched by the then military government in 1991 with a slogan “Housing for All by the Year 2000A.D.’’ The goal was for all Nigerians to have access to decent housing at affordable cost before the end of year 2000A.D.
The housing needs in the country as at the launch of the policy was about 8million units designed for both rural and urban centers in response to the United Nations advocacy, which calls for housing for all by the year 2000A.D
This is through adequate involvement of the private sector in infrastructural provision and to serve as the main vehicle for organization and delivery of housing.
The policy estimated that 700,000 housing units are to be built each year if housing deficit is to be cancelled of which about 60% of the houses are to be built in urban centers. The policy re-structured the financial routing of accessing housing loans by way of creating a two tier financial structure, which is the Federal Mortgage Bank of Nigeria as the apex and supervisory institution and Primary Mortgage Institutions (PMI) as primary lenders.
However, in 2007, the FMBN conceded supervisory functions to Central Bank of Nigeria, the FMBN nevertheless was empowered through decree no. 82 of 1993 to collects, manages and administers contributions to the National Housing Fund (NHF) from registered individuals and companies.
The National Housing Fund is the product of the 1992 Housing Policy of the Federal Government of Nigeria. Decree No. 3 of 1992, which was packaged against the background of the National Housing, Policy (NHP), is a legal instrument for mandating individuals and government to pool resources into the National Housing Fund (NHF). The NHF can be seen as the ultimate culmination of the previous efforts of governments in Nigeria at housing provision. The policy establishing the NHF emanated from recognition of the severe housing problems in most of Nigeria’s urban areas Therefore, the policy took cognizance of both the qualitative (existence of substandard housing,) and quantitative (severe housing shortages) nature of the problem.
The 1992 Decree more or less pursued the original objectives outlined in the National Housing Policy; the main objectives of which were to ensure that the provision of housing units are based on realistic standards which the house owners can afford and give priority to housing programmes designed to benefit the low income group to encourage every household to own its own house through the provision of more credit or fund.
Apart from these previous objectives, the 1992 policy aimed at keeping in line with the enabling objective of the United Nations Commission on Human Settlements. Thus, it was geared towards mobilizing resources for effective house ownership by workers while at the same time de-emphasizing the intrusiveness of government in the housing sector. The NHF was initially meant to facilitate the now discarded vision of housing for all by the year 2000A.D. Nigerian workers earning an annual income of N3, 000 and above are meant to contribute 2.5 percent of their salaries to NHF. In order to ease the pooling of funds and facilitate access by the workers, the law empowers employers to remit the mandatory contributions to the Federal Mortgage Bank of Nigeria(FMBN).
Also, commercial and merchant banks were mandated by the same law to invest 10%of their loans and advances into the FBMN, while insurance companies are expected to contribute 20 and 40 percents of their non-life and life funds into real estate development as a means of further easing the housing problem. The Fund covers workers in both sectors of the economy i.e. the public sector and the organized private sector. The law also requires the three tiers of government (federal, state and local) to contribute at least 2.5% of their annual revenues into the NHF. The policy works mainly by pooling resources from both the public and private sectors and thus limiting government’s direct participation. However, the Decree provides for a 4% interest on worker’s contribution to the fund.
Also, the contributor is allowed to borrow up to five times of his taxable income which is payable over a period of 25 years. While fifty percent of the pool of fund remains with the FMBN, the remaining fifty percent is kept by the Primary Mortgage Institutions (PMIs) for lending to workers. The workers are eligible to borrow any time for building purposes, but where this is not done, the worker contributor can withdraw his savings (including the interest) at the age of 60 or at retirement. The PMIs are empowered by the mortgage Decree to bridge the gap between the FMBN and the contributors (employers and workers).
They are the primary lenders that evaluate loan applications from the individual contributors. The maximum loan allowed for a contributor was pegged by the Decree at one and half a million naira and is to be jointly provided or financed by both the PMls and the FMBN. The loans are given at half or fifty percent of the prevailing market rate.
The 1991 housing policy sought for active participation of all tiers of government, the federal, state and local government and also government agencies and parastatals such as the Federal Housing Authority, the State Housing Authority, Ministries and Departments. Under the National Housing Policy 1994, FHA was mandated to develop and manage real estate on commercial and profitable basis in all the state of the federation, provide sites and services scheme for all income groups, with special emphasis on low income groups in the major cities of the country; and provide low income houses in all states of the federation. To ensure proper and positive implementation of this policy; a committee was constituted, the National Housing Policy Council which is saddled with the responsibilities among others to coordinate all activities relating to housing sector and insure continuous monitoring with a view to determine its performance. During this period the illusionary perception of the government was that availability was not the problem of housing in the country but affordability, a view an expert, Prof. Akinlawon Mabogunje described as a mere illusion.
The government establishes the Federal Ministry of Housing and Urban Development and proposes a housing reform. The period 2000-2004 policy focus was on the private sector to serve as the main catalyst for housing delivery in Nigeria while the government concentrates on the provision of basic infrastructures on the new housing development. Issues in the Land Use Act were equally given attention for review as well as the financial structure such as the FMBN and provision of incentives to developers inform of tax holidays for five years.
This policy recognizes the private sector as the main solution to the housing deficit in the country while the government decided to play the role of an enabler and facilitator in the housing delivery.
However, the inability of earlier policies and programmes to adequately resolve the backlog of housing problems in the country reveals the need for more pragmatic solutions and this form the basis for a review of the 1991 National Housing Policy. Given the importance of housing in the national economy, the federal government of Nigeria set up a 15-man committee on urban development and housing in 2001. One of the responsibilities of the committee was to articulate a new housing policy. The report of the committee as accepted by the federal government was published in government white paper on the report of the presidential committee on urban development and housing in the year 2002. Part one of the report contain the new housing policy, which was subsequently published as draft national housing policy in January, 2004. The draft policy was subjected to critical comments and inputs across the different states of the federation and the New National Housing Policy published in the year 2006. This policy came up with some transitionary strategies in which government made significant effort in partial disengagement into housing provision and encouraged privately developed housing. Under the policy adjustment such as the amortization period which was 25years under the previous policy was jacked up to 30years, interest on NHF loans to PMI’s were scaled down from 5% to 4% while the lending rate to contributors is reduced to 6% from previous 9%.
The new policy aimed at removing the impediments to the realization of housing goal of the nation. The goal of the policy is to ensure that Nigerians own or have access to decent, safe and healthy housing accommodation at affordable cost. This goal is similar to that of the 1991 policy except that the fulfillment of the policy is not tied to a specific period. The scope of the policy objectives has also been widened to include some of the issues put under the 1991 policy strategies.
The policy objectives are to develop and sustain the political will of the government for the provision of housing for Nigerians and provide adequate incentives and an enabling environment for greater private sector (formal and informal) participation in the provision of housing. The policy also aimed to strengthen all existing public institutions involved in the housing delivery at the federal level and encourage and promote active participation of other tiers of government in housing delivery amongst others.
The main policy thrust is on institutional reform, capacity building, and increased financial mobilization to the housing sector, local building material production and adequate access to building land.
The new policy emphasizes private sector participation in housing finance and investment. In fact, one of the short term measures advanced in the policy is the commencement of the implementation of a private sector lead housing construction programme. Section 3.5 specifies the role of the private sector to include participation in the employees housing scheme, establishment of the primary mortgage institutions and cooperating with all tiers of government in the provisions of houses. The new housing policy as it is consisting of nine chapters. Chapter one is the general introduction including a review of the past policies and programmes. Chapter two has housing policy goal, objectives and strategies. In order to resolve the problem of inadequate access to land, in chapter three the goal of making building plots available at the right time, in the right place and at reasonable prices for people willing to build. It reemphasizes the problem of land use act of 1978 and recommended the immediate amendment to the land use decree. The proposed amendment includes the land use registries at local government areas, review of the composition of the local government land allocation committee to include relevant professionals, amendment of the land compensation law to reflect present day economic value of land and quick payment of compensation, provision of guidelines for fixing ground rent and separation of the land use decree from the 1999 constitution of Nigeria among others.
The policy also intends to improve the procedure for land registration by means of survey and cadastral maps as national system of compulsory land registration. Chapter five of the policy considered the issue of housing finance and advanced proposals for improvements. Other issues considered include building materials and construction cost in chapter six, low income and rural housing chapter seven. It is worth noting however, that the new housing policy meant to address the housing needs of Nigerians. The policy emanates from the recognition of the various impediments to housing policy and programme implementation in the past and an attempt to proffer long lasting solutions. The effectiveness of the policy measure is already manifesting in the housing finance sector as brought about by the recent mortgage finance reforms. However, the success of the policy depends largely on the provision of necessary political will through the creation of an enabling environment for people to own or have access to decent accommodation.
The Nigerian Housing Policy 2006 based on the set goals and objectives is to ensure that Nigerians own or have access to decent, safe and healthy housing accommodation at affordable cost. The policy implementation has proven deficient as the majority of the city`s residents are low income earners which the policy supposed to address but cannot afford housing being produced under the programme. It was also discovered that the policy has not made much contribution to housing provision. The primary mortgage institutions (PMI’s) which are the catalyst of policy implementation are not available in the state and most of the residents of the city are not aware of the policy and its potentials in financing housing. Even where government was involved in the direct housing provision very little was achieved in terms of meeting the target group.
But, in 2016, the Federal Government took the bull by the horn by establishing the Family Homes Funds (FHF) as an intervention to effectively implement the highly demanded social housing scheme meant to provide affordable houses to the low income earners.
FHF established by the present administration of President Muhamadu Buhari has a commitment to put 500,000 families in homes by 2024 and in the process, create 1,500,000 jobs.
The Family Homes Fund Limited is a partnership between the Federal Ministry of Finance and the Nigerian Sovereign Investment Authority as founding shareholders with the aim to address the country’s housing deficit.
Already, they have promised to deliver at least 4000 homes in 2020, a move which could start a major revolution in efforts targeted at reducing housing deficit in the country.
More results are expected in terms of the physical delivery of those houses, following the paper agreements that have been signed.
With an allocation of up to N30 billion for the federal government social housing scheme, Family Homes Funds, is expected to consolidate on already made progress in the provision of affordable housing to low income earning Nigerians across the country.
The Fund is structured as a Real Estate Investment Trust and will be professionally managed to catalyse funds from the private sector, pension funds, insurance funds, multilateral agencies and impact investors.
Many are optimistic that the way (FHF) is being run and managed, providing houses for the low income earners will be realizable.
But much will be achieved, if government involves public participation and consultation in housing policy formation to accommodate issues of cultural and Nigeria’s demographic system.
More so housing policies must not only be formulated but also sustainable in terms of inclusiveness and implementation.
There is the need for government to still consider public housing as a form of social responsibilities considering the financial arrangement with the mortgage institutions the required minimum deductible amount which is beyond the reach of a low income earner in Nigeria.
Rental housing is still very relevant and should be incorporated into the housing policy based on the demographic and resource pattern of each state of the federation. They could do this inform of subsidized housing or incorporating social housing into the policy.
Housing scholars equally opined that there should be cooperative housing model, simple land allocation system and affordable finance option.
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