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Nigeria at 62: How Has The Housing Sector Fared?

In a few hours, Nigeria will roll out the celebration drums to once again commemorate its independence, this time, it’s 62nd. However, leadership failure as well as the lack of political will to make and enforce regulations favorable to the built environment has made the sector a shadow of what it should be.

The nation currently suffers from about 17-22 million housing deficit depending on the source you look and although the Minister of Works and Housing, Babatunde Fashola has disputed these figures, built experts have argued that the real figure is higher.

While it is easy to blame the current administration under President Muhammadu Buhari, the present housing quagmire is a culmination of failed policies, promises, lack of regulations from successive government in time past.

Housing is the second basis need of man, coupled with the benefits a booming housing sector can add to the economy, it has always been on the agenda of government since independence but the success or lack of it of housing target by successive government shows that it is not being given the necessary action.

Arguably, Nigeria started out well after independence with forward-looking national development plans that had ambitious housing development components.

The first National Development Plan of 1962 – 1968 saw ‘young’ Nigeria establishing state-owned housing corporation which was for the provision of urban infrastructure and industrial estates in three key areas— Lagos in South West, Port-Harcourt in South East and Kaduna in the North.

The second National Development Plan from 1970 to 1974 saw the establishment of National Council on Housing and the creation of Federal Housing Authority (FHA) in charge of housing Nigerians and the establishment of National Housing Programme (NHP) to construct about 59,000 housing projects. That was when the Staff Housing Loans Board was established.

The third National Development Plan from 1975 to 1980 saw activities of federal government’s direct intervention in housing when about 220,000 dwelling units were proposed. 50,000 units in Lagos, then 8,000 units in each of the then 19 states. At the end, only 15 percent of the projection was achieved.

There were other housing programmes such as the establishment of committee on standardization on housing types and policies in 1975. There was also an anti-inflation task force in 1976.

There was also a Rental Panel in 1976, and then the Land Use Panel in 1977.

As regards housing finance, the Nigeria building society was converted to Federal Mortgage Bank of Nigeria (FMBN) in 1976 with a special capital base of about N20million which was increased to about N150million later on in 1979.

The last of these government housing programmes seemingly ended with the second civilian administration from 1979 to 1983 during which period there was an elaborate national housing programme based on the concept of affordability and citizens’ participation.

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This was the period of low cost housing by the President Shehu Shagari at the federal level and Lateef Jakande in Lagos.

In the 1990-1992 rolling plan periods, about 2,892 serviced plots were provided across various states in the federation. 1993-1995 rolling plans witnessed about 10,474 plots to various categories of citizens.

A proper national housing programme was included in the 1994-1996 rolling plan with the target of constructing 121,000 housing units across the country at the end of the period. Fewer than 2000 of these units were completed by the first quarter of 1997.

N2 billion was allocated to be spent on housing provision in the 1996-1998 rolling plans and over N3 billion was to be spent by the two levels of governments in the 1999-2001 rolling plan.

The government also in 2004 pledged to conduct and fund research related to the manufacture and the use of local materials in the housing sector towards providing 1,000 units per state before 2007. It however gave birth to the 2006 National Housing Policy (NHP) for Nigeria.

The 2006 Policy’s primary goals were institutional change, capacity building, enhanced financial mobilization to the housing industry, domestic production of building materials, and adequate access to land.

 Without a set deadline for delivery, it was also intended to remove the obstacles that prevented the country from achieving its housing goals.

 The strategy also placed a strong emphasis on private sector involvement in housing finance and investment, and one of the short-term actions it launched was the start of a private sector-led house construction program.

It outlines the private sector’s responsibilities, which include participation in the employee housing program, founding the key mortgage banks, and collaborating with all levels of government to provide housing.

 In 2012 National Housing Policy was created to replace earlier housing policies, especially the 2006 policy.

The main focus of the 2012 Policy was the establishment of mass housing with the intention of giving Nigerians access to homes regardless of their financial situation. To accelerate the development of the sector’s infrastructure, it sought to build a million homes a year.

 The importance of the private sector and the government acting as a regulator in the housing sector’s sustainable development was emphasized.

 In an effort to ensure that every Nigerian has a home, the Policy has also introduced the idea of social housing with the intention of providing housing for low-income earners by creating affordable housing in comparison to luxury homes and by making money available to those working in the unofficial sector.

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 The 2012 Housing Policy was a solid policy, adjudged to be among the best in the international community, in terms of their contents and coherence, however despite its commendable programs, it only exists on paper because it did not have the desired real-world effects on the average person.

In terms of affordable housing finance and mortgage, 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 2000 A.D.

The housing needs in the country as at that the lunch of the policy stand at about 8million units including projection in meeting the policy target in both rural and urban centers in response to 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 60percent of the houses are to be built in urban centers.

The policy restructured 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 as primary lenders.

However, in 2007 the FMBN conceded supervisory functions to CBN. Nevertheless, FMBN was empowered through decree no. 82 of 1993 to collects, manage and administer 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 provisioning. The policy establishing the NHF emanated from recognition of the severe housing problems in most of Nigeria’s urban areas 

With the emergence of President Muhammadu Buhari, the All Progressive Congress (APC) led government promised to amend the constitution and the Land Use Act to create freehold/leasehold interests in land along with matching grants for states to create a nationwide electronic land title register on a state by state basis.

The President also pledged to create an additional middle-class of at least two million new home owners in the first year in government and one million annually thereafter by enacting a national mortgage system that would lend at single digit interest rates for the purchase of owner occupier houses.

Years on, the lack of political will did not allow the National Assembly amend the 1979 Land Use Act which stakeholders, see as a cog in the wheel of development of houses and converting land resources into individual wealth in the country.

Minister of housing, Fashola has said the administration had delivered on its promises, saying that there is no part of the country that the federal presence is not felt, adding that the pilot National Housing Programme which is second in the history of the nation has led to a nationwide housing construction currently at various stages of completion in 34 states of the federation, where landed properties were provided.

Aside from the building construction, the minister also disclosed that the ministry in its bid to tackle backlog of issuance of Consent and Certificates of Occupancy on Federal Government lands, explaining that a total of 1, 417 applications for Consent to Transfer Interest in land and 2000 Certificates of Occupancy were approved and signed.

 “For the housing sector, our short term objectives were to get people back to work and currently, we are building in 34 states and concluding plans to start the second phase.

“The conversation before the inception of President Buhari government is that, there is no Federal Government presence in some states, but today, no state can say it has no Federal Government presence,” he said.

Despite these words, built experts say housing issues are deepening.

Some of the issues currently bedeviling the housing sector according to stakeholders are: The Land Use Act of 1978 which puts all land under the management of the government; process of documentation and property registration which takes too long making people cut corners and when due process is not followed, it becomes a problem to housing development.

The high cost of building materials and how it affects property development cannot be overstated. Most building materials are imported leading to their high cost; lack of enabling environment for business due to poor infrastructure and insecurity and of course finance.

Stakeholders notes that these challenges are not new and that there are availability of policies and programmes enacted by various governments to tackle the problem, but effective implementation had remained a persistent dilemma.

As Professor S. Ibi Ajayi opined, housing deficit is a global problem that is not peculiar to Nigeria, however the nation is laden with a number of anomalies, which, if not sorted out will continue to widen the deficit of the housing sector.

Proffering solutions to the crisis, he said in the Central Bank of Nigeria (CBN) report, “In order to discover the potentials of the housing industry or more appropriately to unlock the housing industry from the corner to which it has been locked up, the following can be of assistance.

“First and foremost, it is necessary to maintain a conducive macro-economic environment which entails the maintenance of low inflation, low interest rates and stable exchange rates.

“An economy that is dependent on imported goods even for its housing needs will be buffeted by rising cost of materials. If the interest rates charged are generally high, it will affect the payment on mortgages.

“Second, there is need to deepen the housing financial market as and well as liberalising access to it on a long-term basis for all categories of income.

“Thirdly, there is need to simplify transaction costs in all areas of housing such as land allocation, and registration of titles etc. One of the problems of housing is the cost in administrative processing which can be drastically reduced.

“Fourth, it is necessary to make available all the information on the procedure for obtaining financial assistance from all quarters by government.

“Fifth, building materials and others in Nigeria are always very expensive. There is need to ensure that time and money are adequately spent to ensure the availability of locally produced building materials in adequate quantity.”

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