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Corporations knock FG over 300,00-unit housing intervention fund

By Chinedum Uwaegbulam
19 April 2021   |   3:02 am
Twelve months after the Federal Government set up Economic Sustainability Plan (ESP) in the wake of the COVID-19 pandemic to provide stimulus package to businesses and critical sectors

Twelve months after the Federal Government set up Economic Sustainability Plan (ESP) in the wake of the COVID-19 pandemic to provide stimulus package to businesses and critical sectors, the Association of Housing Corporations of Nigeria (AHCN) has given a thumbs down on its performance, saying it failed to provide succor to the housing sector.

Under the ESP, the sector was listed among strategic sectors, with a strategy to provide 300,000 housing units yearly. The strategy envisages the creation of 1.8 million jobs starting with the construction of 300,000 homes in the next 12 months and creating 1.5 million homes for families across the country.

The strategy aimed at easing bottlenecks in the delivery of social housing and delivering affordable homes through direct government interventions in housing construction. It involves working with state governments to identify land for housing construction in all Local Government Areas and targets 100 per cent local input for the construction of 400 homes in each Local Government Areas.

The project elements include standardising the design of homes for cost management and industrialisation of the construction process, identifying and selecting delivery partners formed by groups of professionals and artisanal builders as primary delivery channels as well as creating a ‘homes warehouse’ to buy completed homes from delivery partners, in the absence of ready off-takers.

Similarly, there were also plans for encouraging private sector involvement and facilitating maturity of the mortgage market that will cater to the needs of middle-class Nigerians while government addresses the needs of low-income earners and the poor.

AHCN President, Dr. Victor Onukwugha, said “while the inclusion of the housing sector in the ESP is commendable, the actual execution strategies of the project elements were very vague without clear cut plan and roles for execution.”

According to the plan, the first track was aimed at easing bottlenecks in the delivery of social housing while the second track will deliver affordable homes through direct government intervention in house construction.

Onukwugha, who spoke on “Roles of Housing Corporations in Actualising ESP for 300,000 Affordable Housing Units” said: “It is a year now that the plan was rolled out and from what we can all see, not much has been achieved in easing bottlenecks in the delivery of social housing aside from the purported release of N200 million by Central Bank of Nigeria (CBN) for the project. The second track, which proposes to deliver affordable homes through direct government intervention is still hanging.

“While we commend government intervention plan of the 300,000 housing units yearly, the strategy of engaging in direct government intervention will not be complete without the involvement of state housing corporations as drivers of the project in each state of the federation. If the ESP must achieve its lofty objectives, the involvement of AHCN, the umbrella body of state housing corporations is inevitable.”

On why state housing corporations is important in actualising the scheme, AHCN noted that state governments are custodians of a large expanse of land, and easier to allocate land for their state agencies. Moreover, most of the housing corporations have a land bank that could be used for the project.

Two, housing corporations are government parastatals with access to government land, which place them at advantage position to execute affordable housing scheme in all states of the federation.

Three, it is easier for state housing corporations to secure land documentations for such lands allocated to them, and corporations are trusted by the people as a government agency with assurances that their properties are devoid of any discrepancies.

Four, corporations are equipped with experienced professionals in the built environment that can guarantee quality delivery. “It is also easier for funders to deal with government agencies than private developers. It is also easier to package civil servants in the state as off-takers for the purpose of repayment, which can be deducted from source and guarantee prompt repayment.”

Five, incidences of default would be reduced which will give room for good planning and future development as well as easier for corporations in each of the states to assist in the generation of databases for off-takers, which will provide an exit point for repayment.

“Saddling the Federal Ministry of Works and Housing to execute this proposed 300,000 housing delivery as enumerated in the ESP is unnecessary,” Onukwugha said. “Federal Housing Authority (FHA), which is the Federal Government arm in housing provision should be saddled with this task at the federal level because of the enormous plan to deliver these housing units in all the states.”

According to him, affordable low-cost housing is not attractive to private developers because of the low yield from such investment. “It is only state housing agencies that are positioned to bear this low-yield from social housing. With the backing of government through this proposed intervention, it becomes easier for these agencies to function effectively,” he added.