Addressing Nigeria’s housing deficit
The ruling All Progressive Congress (APC), during its campaigns last year, made it clear that government would intervene directly in the housing sector in order to reduce the country’s housing deficit, currently estimated at 17 million housing units.
At present, Nigeria has an APC-government in place and its policy regarding direct intervention in the housing sector is a complete reversal of government’s policy in the last 16 years not to be directly involved in house constructions.
Indeed, former President Olusegun Obasanjo’s administration sold some government houses, including staff quarters, built by previous administrations.
Shedding more light on the emerging housing policy of government, Mr Babatunde Fashola, the Minister of Power, Works and Housing, said that there would be changes in the extant housing policy.
He said that the changes would start in the 2016 budget, as the Federal Government would spend N10 billion to build low-income housing estates in each of the state of the federation and the Federal Capital Territory (FCT).
“The housing sector presents an enormous opportunity for positively impacting on the economy to promote not only growth but also inclusion.
“There have been a couple of National Housing policies and we intend to appraise the most current one to make changes only if necessary.
“Government will lead the aggressive intervention to increase housing supply, by undertaking construction of public housing and formulating policies that will invariably lead to private sector participation and ownership in order to reduce our housing deficit,” he said.
The minister said that the Federal Government would understudy the housing estate models of former President Shehu Shagari and former Gov. Lateef Jakande of Lagos State, as part of efforts to develop affordable housing units for the masses, while building 40 blocks of houses in each state.
“So for us, consistency is crucial; increase in annual spending is an imperative. We must change the budget for national housing from N1.8 billion in 2015 to something in the hundreds of billions of naira that matches our ambition,’’ he said.
Fashola said that if the government could spend N10 billion on housing alone in each of the 36 states and the FCT every year, it would make a lot of difference.
However, Mr Bashir Haiba, the former Managing Director of Abuja Property Development Company (APDC), urged the government to adopt the Shehu Shagari Low-Cost Housing Scheme model.
He said that one of the main advantages of the Shagari Low-Cost Housing Scheme was its fair spread across the country.
Besides, Haiba recalled that the housing scheme then created a lot of jobs for the citizens, virtually in every local government area of the country.
“Part of the government housing programme should be a replica of Shagari Low-Cost Housing Scheme but it should be executed in line with contemporary realities.
“We should use establishments, technologies and structural systems that are appropriate now,’’ he added.
Nevertheless, Mr Anthony Olowoyeye, a building construction expert, underscored the need for the Buhari-administration to approach housing, not as a brick-and-mortar problem, but as a system.
Olowoyeye, who works with a Local Authority in the United Kingdom, argued that Nigeria was facing a housing crisis, saying: “There is a massive shortage of housing.
“For too long, housing policies, programmes and deliveries of successive governments in Nigeria have failed to meet the aspirations and expectations of many citizens, particularly the low- and middle-income earners.
“In addition, the house affordability problem and slum-housing proliferation continue to constitute major challenges.
“President Buhari represents hope to many Nigerians; hope in economic development, security, education; hope in housing and infrastructure development; and hope in checkmating corruption.
“If the Buhari-administration could approach housing, not as a brick-and-mortar problem, but as a system; then the housing hopes of many Nigerians will not only be realised, they will also flourish,’’ he said.
Olowoyeye, nonetheless, advised the government to avoid taking unnecessary “housing shortcuts’’.
“Delivering good quality housing involves rigorous planning and strategic thinking.
“It involves examining various housing options and working not only with fund managers and financial institutions but also the populace.
“For instance, it is important to understand that the housing needs of people in Lagos may differ from the housing needs of people in Karu, Abuja, or people in Bonny, Rivers.
“The president cannot afford to simply throw money at the housing problem; he would do well to stop the `Jankara Marketisation’ of housing in Nigeria,’’ he said.
All the same, Mr Gimba Kumo, the Managing Director, Federal Mortgage Bank of Nigeria (FMBN), argued that the country’s housing deficit continued to increase because of poor funding of mortgage institutions.
He also alleged that commercial banks and insurance companies had defaulted in payment of their contributions to the National Housing Fund (NHF) for over 24 years.
Kumo made the allegation while briefing the Senate Committee on Banking and other Financial Institutions recently in Abuja.
He said that since 1992, the financial institutions flouted the provisions of the NHF Act which compelled them to contribute to the Fund.
“Section 5 of the NHF Act provides that commercial banks are supposed to devote 10 per cent of their portfolio to the Fund.
“Insurance companies, on their part, are supposed to invest 20 per cent of their life insurance funds and 25 per cent of their non-life funds in the Fund.
“Section 11 provides that where the banks refuse to pay, the CBN is supposed to force the banks to contribute to the Fund at an interest rate of four per cent.
“This has not been complied with since 1992; we have been following up with the CBN but nothing has been done.
“So, this is an area that we need your support to ensure that the law is enforced,” he said.
He said that the FMBN was in dire need of the contributions to enable it to tackle the deficit existing in the housing sector.
While calling for the Senate’s intervention in enforcing the NHF Act, Kumo said that efforts were underway to encourage the non-formal sector to sign up and contribute to the Fund.
He said that the involvement of the non-formal sector would increase contributions to the NHF by 6,000 per cent, while increasing the monthly contribution from N2.5 billion to N3.5 billion.
He called on the Senate to also look into how to use pension funds to finance housing projects in Nigeria.
However, Kumo solicited the recapitalisation of the FMBN, from its current N5 billion capital base to N250 billion, adding that such a venture would further empower the bank to meet the country’s growing housing needs.
“FMBN is supposed to be recapitalised to the tune of N250 billion but as I talk to you today, the capital base of the bank is only N5 billion.
“As regards N5-billion capital base of the bank, it is only the Federal Government that has paid its own share of 50 per cent; the CBN, which has 30 per cent, has yet to pay.
“Besides, the Nigerian Social Insurance Trust Fund (NSITF), which has the remaining 20 per cent, is yet to pay.
“I am happy to inform you that the current Minister of Power, Works and Housing has written to the CBN and the NSITF to pay their contributions immediately,” he said.
Kumo said that the FMBN, through the National Housing Scheme, was on the verge of completing 67,000 housing units, adding that it was currently targeting construction of 72,000 new houses that would be spread across the country.
He said that job creation was one of the major benefits of the housing project because not less than 17 workers would be needed to build each of the 72,000 houses.
He said that the houses would be built across the six geo-political zones of the country, with the major cities getting the largest share of the houses.
“FCT will get 15,000 housing units; North Central will have 5,000 units; South East 5,000 units; Lagos 9,000 units; North West 7,000 units; North East 5,000 units; South South 5,000, while Kano and Port Harcourt will get 8,000 housing units respectively,” he said.
Analysts insist that when all is said and done, the APC-led government will be able fulfil all the pledges it made on the housing sector in the party’s campaign manifesto.
They describe the government’s decision to directly intervene in the construction of houses as a step in the right direction.
They, nonetheless, advise the government to study how the Shagari-administration was able to construct housing estates across the country within a space of four years.