THE sum of N21 trillion required to solve the housing deficit in the country can only be sourced through “seed funding” and not from federal government’s budget, a housing investment expert, Ayo Ibaru, has said.
The Bank of Industry (BoI) had stated in its latest research report that Nigeria needed N21 trillion to close its housing deficit gaps.
But as Ibaru posited, Nigeria might not be able to close the gap since it largely depends on borrowing to fund its budget.
The 2023 Federal government’s budget is N21 trillion, to be funded largely by borrowing.
The housing investment expert pointed out that the Federal government had been struggling to plug the housing deficit loopholes, but had really not maximally explored available seed funding options.
Ibaru said on the Arise Television programme ‘Business’ today that “the burden of addressing housing deficit should not be left in the hands of the government alone without seed funding support.
Seed funding is a form of securities offering involving a start-up company in which an investor put in capital in exchange for an equity or convertible stake in the company.
“We need a seed grant of solving the housing deficit problems. Ghana has taught us that this is doable,” he said.
He emphasised the importance of affordabe housing, noting that the government must have a long-term strategy to enable local manufacturers produce locally.
“You cannot have affordable housing when cement, land, and other materials are not affordable,” he said.
Ibaru further said that the first thing to do with the concept of affordable housing was to deal with delays in the housing processes.
The government, he emphasized, must begin to think of letting go its tight grip on land by signing land titles early enough.
The Federal government, through the Minister of Housing and Urban Development, has commenced a housing scheme for civil servants in the Federal Capital Territory (FCT).
However, those knowledgeable about the sector said it is difficult to close the funding gap without joint partnership with the private sector through enabling policies.
The Project Director, WAP Ltd, Rwanda, Harmony Kunu, held that available and new alternate building materials technology were not widely published and deployed to developers.
According to Kunu, lack of government’s support with the necessary infrastructure and incentives also discouraged mass housing projects.
“There is no formalised and published construction permit approval in place, and where some states government do have some sort of approvals, most are wrongly evaluated with respect to cost of securing approvals.
“Only in Nigeria do they cost the number of houses and number of floors to secure a construction permit for an estate project,” he said.
Source: International Centre for Investigative Reporting