Concerns mount over low budget allocation, private sector engagement
With existing strains on available housing and huge deficit put at over 17million, professionals in the sector have expressed grave concerns on the workability of the N715 billion allocation to the ministries of Power, Works and Housing.
According to them, the N26.7billion 2018 allocation to the national housing programme might not provide the succor Nigerians need for improve shelter if poorly implemented.
The National Assembly had on May 16 passed the appropriation bill after spending about six month with the Legislature before it was signed into law by President Muhammadu Buhari.
Regrettably, Nigeria’s population keeps growing and more people moving into urban areas forcing more pressure in the demand for housing, and the result is burgeoning areas of informal housing, overcrowding and slums.
Statistics on nation’s housing deficit paint a grim picture, with data from the World Bank and the National Bureau of Statistics agreeing that Nigeria has an estimated housing deficit of over 17million units while the United States of America (USA) has projected that by year 2050, the country would have overtaken the West African region in population strength as well as becoming a global economic power.
Speaking on the issue, the National President of the Nigerian Institute of Town Planners (NITP), Luka Bulus Achi said the allocation for the sector shows an improvement stressing that it is quite commendable but expressed fears that if government is to fully carry out the construction by itself, the money might just be a drop in the ocean.
“It’s a major effort in trying to address the housing need in the country especially for the low income-earner. Our fear is that usually those in the high political terrain will take over those houses by buying it up from the poor Nigerians and then begin to give them some other places”.
According to him, with the current market realities in the real estate sector, to construct a two-bedroom flat aside from the cost of titles on the land, you need between N3, 000,000million to N4million to have a reasonable house.
He said, “If the money is shared out, that is not what it is because you find out that infrastructure might take the total 50 per cent of the cost. If you take between 40per cents of the N4million and share it into N4million or N5million, the number of houses who would get is not really much when Nigeria has over 18million housing shortage. There is no way that amount could solve up to one-tenth of that need. In essence, the effort is good, but may not show significant improvement in meeting the housing need in the country.
Achi, a town planner, emphasised that the danger of low a budget for housing, is like scratching the surface of a problem thereby creating more problems than solving them and leaving the people more frustrated in an attempt to get their needs resolved.
“I will suggest that maybe that effort with another combined activities by states to argument what the federal government is doing, get Public/private partnership (PPP) plus engaging the Non-government organizations (NGO’s) that have concerns for housing. Government should give them some form of supports like we are giving support for those in the agricultural sector. We should get NGO’s some helps for them to be able to build houses for the low income earners and that would ensure an effective spread of housing across the country”.
The President of Nigerian Institute of Building, (NIOB), Mr. Kenneth Nduka said no amount of money will be too big for spending on the housing sector with the reality of existing huge deficit in the country.
According to him, the major concern of professionals is the type of house that is to be constructed for Nigerians. He said what Nigerians need are homes that affordable for the low-income earners which are in the majority.
“If you allocate all the budget for housing, it would not be enough going by the role of shelter in the well being of the people. There are house all over the place, but the question we must ask ourselves is that do they satisfy the needs of the people and the niche population that need them. That amount is not enough and the greatest challenge is how it would be implemented. Would it get to poor Nigerians or be hijacked by the powerful Nigerians”.
Nduka explained that low budget to housing will continuously widen the deficit in housing if government don’t make a definite statement on the industry which are targeted toward improving the process, quality and the economy of housing in the country.
“As a way to avert the danger of low budget, we need quick access to title, reduce inflation in the country, commit more funds to housing and see it as an emergency and encourage public private partnership to improve stocks”, he said.
Also speaking, a former President of Nigerian Institution of Estate Surveyors and Valuers (NIESV); Mr. Emenka Eleh said When there is a low budget, there will be low productivity and poor result noting that the number of housing units that have been earmarked would not be delivered.
“ What the government must do is for the private sector to be the engine room for driving the housing. I have a view based on our antecedents in Nigeria that the government has no business being in business. It should leave what could be done by the private sector to be done by the private sector. If government wants to operate on the basis of housing provision for low income earners, that is fine but the high income, middle income and even the low income could be run by the private sector”
He said government must get its house into order in the areas of land titles, which would enable mortgages to thrive at very low percentage and allows people to use their assets for collateral.
“A country where you draw mortgages at over 20 per cent is wrong. Government could help in the area of research into building materials if mortgages are right, interest rate at low rate, inflation reduced and government is able to invest in infrastructure The largest cost of any estate goes to infrastructures like roads and power supply among others will often times increase the cost of the house. The legislature must be more inclined in passing bills relating to the development of the industry. They must urgently do something to address things that affect the growth of the sector”.
In Lagos, for instance, he said, consent fees is about 15per cent could takes about three months to eternity, in some other states, it may be shorter or longer but these are issues that could be resolved. He noted that in Rwanda that just came out of war, it has advanced from zero titling to 100 per cent but Nigeria is still about three per cent. “In fact we learnt that on your phone you can check the title on any land to know the owner in Rwanda. This is part of what government could do. Even if government has trillions for housing, it might not be able to deliver quality housing efficiently. The right institutional framework must be put into place across all sectors including real estate”.
On how the budget should be implemented, the Chairman of Nigerian Society of Engineers, (NSE) Apapa branch; Dr. Ombugadu Garba said over time, a major problem in the sector is lack of full implementation of allocations meant to cater for the needs of Nigerians.
Garba said; “If you look at where we are coming from, how much in last years’ budget was allocated for housing sector and how much of it was implemented? It is not all about budgeting, but about implementation so that people will have value for whatever they are getting. If you look at the current housing gap in the country, the amount is grossly inadequate and this is for sure. My thought is that if you budgeted for instance N26billion, how much of it will be implemented”.
He stated that government must ensure that all the budgetary allocations for infrastructure totaling N715billion for Power, Works and Housing, are duly implemented to add value to the lives of Nigerians. He lamented that the housing deficit in the country was a cumulative effect of under-budgeting over the years stressing that low budgeting will further increase the housing deficit and gap in the country.
“How can you have development when most of your citizens don’t have houses to live? They government would sustain and properly utilize the amount budgeted, then we can be sure that the existing gaps in housing would be bridged or else, budgeting would just be like a ritual”.
On how workable the budget will be, he said, “Government projects go through procurement process and as it is the tradition, they would take most responsive bidder and at times where the system is not water tight, people could explore an avenue where they can just be the only responsive bidder and what that means is that whatever they approved, bided for and the amount is higher than what you are going to do, you will have the budget. We are can’t really tell therefore, how far or how workable the budget might be. Let the money be transparently channeled to improve the sector”.
“We have to know what kind of housing government wants to build, design, the prevailing market situation at that area and every terrain has its own challenges. The houses you are going to build in Bayelsa or the South-South for instance might not be the same if you are building in a village in Nassarawa state. We also have to think in terms of where the materials for the buildings will be sourced. The factors of foreign components might also come in and when you import, it will be determined by the value of prevailing dollar rate”.
To him, the ministries of power, works and housing are central to the fabric of Nigeria and advised that to change the negative experiences of Nigerians on the sectors, there should be more commitment in terms of funding and proper implementation even on yearly bases.
“We have heard about what was committed in the past to power sector about $16billion but what was the result; darkness. Was there any value or effect on the people? Yes, there is an increase in budgetary allocation but the point is, we need to let this budget have values to the lives of the people and bring about infrastructural development and economic growth”, he stated.