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Tackling housing deficits through incentives for developers in Nigeria


New housing estate

New housing estate

Amidst growing concerns over inadequate housing for Nigeria’s population of approximately 180 million people and the controversy over the accurate data of housing deficits, stakeholders in the property sector have advocated policy driven incentives for public developers in order to provide affordable shelter for Nigerians.

Rebate for approval for mass or social housing and easy accessibility to lands are some of the provisions they said should be included in the new policy framework.

Concerns over housing deficits date back to 1991, when Nigeria was said to have housing deficit of seven million units. Since then, the deficits in housing requirements have been growing at 5.8 per cent per annum, which has given rise to a slum population estimated at about 70 per cent.


Twenty-four years down the line, the deficit has skyrocketed by about 250 per cent according to statistics. Investigation has shown that the exact housing deficit figure of 17 million as being bandied by government has lingered for over a decade.

For instance, during President Olusegun Obasanjo’s first term between 1999 and 2003, the deficit figures were put at 17 Million. Today, Government officials still bandied that figure, while experts put the deficit at 23 million housing units.

Also, President Muhammadu Buhari recently said Nigeria would require one million houses yearly to reduce its current national housing deficit and avert housing crisis by the year 2020.

The World Bank’s estimate for tackling Nigeria’s 17 million housing deficit is put at N59.5 trillion. This is not too far from the estimation of the Federal Mortgage Bank of Nigeria which had put it at about N56 trillion to be able to adequately meet the housing needs of Nigerians.

Although, the present government through the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, has revealed that there would be change in the policy direction of the Buhari’s administration in the settlement sector leading to increase in housing budgets, government’s effort at addressing the deficits had only yielded about 100,000 houses per annum, leaving a deficit of 900,000 housing units.

While official statistics seem to be unavailable, information from the FHA suggests government is always directly or indirectly involved in most housing projects in the country leading to doubts on the statistics of housing facilities built by the Federal Government.

This is coming on the heels of the various complaints by citizens and professionals on the problems of accommodation in the country.


The most recent appeal came from the Nigerian Institution of Estate Surveyors and Valuers (NIESV), which expressed displeasure at the low rate of housing development in the country, urging government to make deliberate efforts to house Nigerians because of its socio-economic advantages.

Some built professionals have also argued that thousands of unoccupied houses in mega cities like Abuja, Lagos and Port Harcourt, were constructed by private individuals at exorbitant prices due to lack of support from the government.

Thus, the prices of housing in such cases are usually expensive and apparently beyond the reach of less than affluent citizens.

Also with the recent review of the proposed housing design and mortgage structure for low income groups in Lagos State, stakeholders were of the view that even with the significant efforts at addressing the housing deficits, many of the low-income groups, which constitute a bulk of the national population are often left behind because of lack of efficient mortgage system in the country.

According to them, while affordable housing is unrealistic if left to the government alone, there is need for flexibility in the system especially in certain areas like making lands available for social housing.

Given credence to this, a development expert and Project Director, Arctic Infrastructure, Lookman Oshodi, said lack of policy driven incentives for public developers has led to the high quantum of informal settlement slum within a city order.

According to him, new housing programmes and urban renewals should not only consider the low income group because of their critical mass but should take their interests into consideration.

He also lamented that near absence of mortgage couple with the development of housing types without taking care of the low income has made accessibility to housing very difficult.


In Lagos State for instance, where the government has tried to bridge the housing deficits through its epochal Lagos State Home Ownership Mortgage Scheme (Lagos HOMS), the scheme, which commenced under the previous administration was yet to be fully subscribed, even with the introduction of raffle and other strategies.

In the project, the Lagos State Government is providing subsidized mortgages for ordinary citizens of Lagos, and a pool of houses in which winners can set up their new residence.

Winners of the subsidized mortgages are drawn out of a lottery on a monthly basis. But the state government was later forced to slash the prices of the mortgage houses. With the reduction, two-bedroom flat, which was N7.2 million, was reduced to N3.5 million, while the one-bedroom was reduced to N2.3 million. Also, the room and parlour unit was reduced to N1.5 million.

But Oshodi, an architect, said there is need for a review of the housing types in new housing programmes for Lagos and other states in Nigeria, which should include the enthronement of strong and virile mortgage system as well as easier land acquisition process.

Buttressing the difficulty in land acquisition, Oshodi citing the Eco Village project in Port Harcourt, developed by Mrs. Chinwe Ohazurike, an architect, as a reference point, said the village was taken far from the city because of the land acquisition struggle, which resulted to taking residents away from their homes and work places.

He also identified funding as a problem because there is no clear cut financing mechanism for the interest of low-income group.

Also, the Director of Sustainability West Africa Lead, Ernst and Young and member of the Nigerian Economic Summit Group (NESG) Sustainability Policy Commission, Mr. Opeyemi Joseph Owolabi regretted that investment in government housing is speculative and called for mass approach to meet the housing demands.


According to him, there is need for social inclusion to capture the informal sector that provides 85 per cent of the labour force. He also stressed the need for government incentives for developers by lowering the market entry and ease of doing business, improving time frames for exports and imports and zero tariffs for renewable energy.

Owolabi, who works in Job Creation Unit in the office of the Vice President also aligned with the policies of government in agriculture, power, works and housing, trade and petroleum, stressing that government is creating an agricultural hub and cities, with a whole value chain in order to encourage investment in the sector.

According to him, it is often difficult for a prototype housing programmes in driving affordable housing project in this part of the world. For the Head of Affordable Housing Unit at Lafarge Holcim, Mr. Aurelien Boyer, the expansion of microfinance housing is a pragmatic solution to the explosion in rural exodus.

Explaining how Lafarge is supporting microfinance structure in Nigeria with technical structure and potentials for Lagos, he said the firm’s easy home project launched three years ago in collaboration with LAPO Micro Finance Bank has produced 25,000 beneficiaries across the southwest zone of the country.


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