The housing market in Nigeria is one of those troubled by a number of issues. As the nation celebrates its 62nd anniversary of independence, the sector does not appear to have expanded to the level anticipated.
Even though it’s one of Nigeria’s busiest and most lucrative industries, some Nigerians are still without a place to live, while others are at the whim of their landlords. There are reportedly 17 million unoccupied homes in Nigeria. Although there has been debate over this number from both sides of the expert community.
The figure had previously been referred to as a fallacy by Babatunde Fashola, the Minister of Works and Housing. The deficits, according to some industry experts, are greater than expected.
Government initiatives to improve the industry
The federal government has experimented with various housing policies and programs over the years to address the nation’s housing issues. The Land Use Act of 1978, the Mortgage Institutions Act of 1989, the Federal Housing Authority Act of 1990, the National Urban Development Policy of 1997, and the Housing and Urban Development Policy of 2002 all include some of these policies.
Additionally, it introduced the housing programs for the Nigerian Army, Nigerian Police Force, and Nigerian Port Authority. However, there is still a significant housing shortage.
As the nation celebrates its 62nd anniversary of independence, a number of issues are found to be roadblocks to its development.
Land use act
All land is managed by the government under the Land Use Act of 1978. The decree’s regulations were intended to benefit the nation and its citizens by promoting efficient land use across the board and protecting the public interest. You are at a disadvantage if you buy land in Nigeria today without getting a Certificate of Occupancy (C of O) from the government because the land is not actually yours.
Due to this, it is impossible to obtain loans or funding to develop such property. In addition to the high cost of purchasing land, obtaining a Certificate of Occupancy appears to be a very laborious process that makes it difficult for individuals or real estate developers to build housing.
The documentation and property registration procedures are too drawn out. This causes people to take shortcuts, and when proper procedure is not followed, it affects housing development.
Additionally, there is the issue of community boys harassing women during property development. If the primary documentation process is adequately pursued, this issue can be resolved.
High cost of construction materials
It is impossible to overstate how expensive building supplies are and how that affects real estate development. The majority of building materials are imported, which drives up their price.
The harder it is for low income earners to buy these materials, the more expensive they are. This translates to incomplete buildings, subpar housing, and high rents, all of which contribute to the housing issues people are facing in the country.
The old and new budgeting
The annual budget for Nigeria’s housing sector as of 2015 was N1.8 billion, which Fashola referred to as a pitiful sum when he held his inauguration. The 2019 budget states that the sector’s annual budget has increased to N30.04 billion, and as of 2022, the ministry of Works and Housing got a sum of N481.964bn.
Similar to this, the Federal Housing Authority (FHA), which had a budget of $5 billion before the current regime took office, has now been significantly expanded.
Reacting, Joshua Egbagbe, Chairman, Value Chain Offtaker Mortgage Affordability Profiling said that Nigeria is at the verge of a major renaissance in Nation building, and a Re-booting of national imperatives to assume regional leadership in Africa, and the world at large.
According to him, irrespective of local ethno-religious differences and partisan political deception, housing remains a critical element in the renaissance and rebooting of Nigeria as an emerging and developing Nation, similar to the Asian Tigers.
“As for which Leadership, and which President will lead the charge, from the front, we pray that the Electoral System will allow for the popular people’s vote to prevail”, he added.
Also, the Chief Executive Officer and Project Director of WAP Ltd, Engr. Harmony Kunu highlighted certain indices indicating areas Nigeria Housing sector failed to grow despite increasing population rate and housing deficit gap.
He stressed the need to set up an Emergency Housing Project Committee, including technical and subject matter experts in urbanization and future housing development with a two-year work plan, as well as developing a 30-year master plan for Nigeria, encompassing necessary building construction procedures, inspections and permits processes that align with global best practices.
Some of the issues that hampered the performance of the sectors in prior years, according to other real estate experts, have not changed. They named some of them as the delay in borrowing approval needed to fund housing programs, a bottleneck with land documentation, and development control; low awareness regarding the access to housing fund and Land Use Act of 1978.
They called for an urgent review of the Land Use Act of 1978 and advised that efforts be made to improve the land documentation processes.
The government was also urged to work with cooperative societies and property developers to provide housing infrastructure.