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How four years of Buhari government failed to bridge housing gap


Housing still a mirage for Makoko residents in Lagos

The housing sector worldwide, is believed to be the bedrock of the economy of most developed nations, an important tool for stimulating growth.In the advanced countries, the sector contributes between 30 and 70 per cent of their Gross Domestic Product (GDP). Investment in housing accounts for 15 per cent to 35 per cent of aggregate investment worldwide and the sector employs approximately 10 per cent of labour force worldwide.

A country’s ability largely depends on the sector and all government’s economic measures and policies affect it.The housing sector is almost a big elephant in the room, which seems to have escaped the attention of policy-makers, multilateral institutions, and the private sector. In fact, it is somewhat baffling why multilateral institutions such as the World Bank have not spent more time addressing this glaring omission.

“We are good at working on agricultural projects, on health programmes, and anti-poverty initiatives. But somehow housing and construction appear to have fallen on our blind spots,” according to the former Co-coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala.


Nigeria is implementing its second National Housing and Urban Development Policies, since 2012. The two policies are adjudged to be among the best in the international community, in terms of their contents and coherence. Yet the country, especially its 36 states, is yet to develop an effective and sustainable delivery system for affordable housing, of low carbon footprint to poor and low-­income families.

Prof. Mustapha Zubairu, the Project Manager, Niger State Urban Support Programme, Minna, noted, “the seeming endemic weakness in the housing sector manifests themselves much more glaringly in each of the five components of housing-land, finance, infrastructure, building materials and labour.”

The inaction of Nigeria and other African countries in this area can be seen on the economic data. For instance, in the United Kingdom, mortgage finance to GDP ratio is about 80 per cent, in the United States it is 77 per cent. For Hong Kong, this ratio is 50 per cent, across Europe the average is about 50 per cent, and for Malaysia it is 32 per cent.

In Africa, South Africa is the outlier with mortgage finance at 31 per cent of GDP. For many African countries, this ratio is low: it is only two per cent for Botswana, two per cent for Ghana, and only 0.5 per cent for Nigeria.

The potential of the housing and construction sector is huge and enormous and no government has been able to tap into it. Currently, there is still growing housing demand at about 20 per cent per annum in popular cities such as Lagos, Abuja, Ibadan and Kano.

Despite this, Nigeria remains Africa’s largest economy with a GDP of $510 billion. The housing and construction sector still accounts for only 3.1 per cent of rebased GDP. Total current housing production is at about 100,000 units per year, for a country of nearly 170 million. The country needs about 700,000 additional units each year for the next 14 years to address existing 17 million deficit in housing.

For the government to unlock the housing industry, four key issues need to be addressed in Nigeria. One, maintain conducive macroeconomic policies, which provide for stable and low inflation; low interest rates; and stable exchange rates;

Two, improve access to long-term finance, in particular by deepening liquidity of the housing finance market;Three, to simplify transactions in land registration and foreclosure processes; andFour, promote good quality and efficient building and construction at reduced costs. This meant that we had to address the existing supply-side concerns in producing houses at affordable costs; and also invest in the training of skilled labour for the housing sector.

Before the coming of Muhammadu Buhari administration, the previous government established Nigeria Mortgage Re-finance Company (NMRC), which is a public-private sector-led initiative aimed at improving access to finance for Nigeria’s housing market. Shareholders of the NMRC include the Nigerian Federal Government, the Nigerian Sovereign Investment Agency (the Nigerian Sovereign Wealth Fund), development finance institutions (such as the IFC and Shelter Afrique) as well as various primary mortgage banks and commercial banks in Nigeria.

The NMRC is essentially a re-financing institution, which provides the mortgage lending banks with increased access to liquidity and long- term funds. By deepening the available liquidity in the housing finance market, the NMRC will help to bridge the funding costs for residential mortgages in the country.

To finance the NMRC, the government then successfully negotiated a US$300 million financing Agreement between the Federal Government and the International Development Association (IDA) on very concessionary terms. Of this sum, about $250 million will be disbursed in installments to NMRC as Tier II Capital subject to various performance indicators.

Another $25 million was also allocated for the establishment of a mortgage guarantee facility for low- income borrowers, while $25 million will support the development and piloting of housing microfinance products.

Okonjo-Iweala pointed out, “ The lack of a proper mortgage finance market also creates frustration for many honest Nigerians with stable jobs who want to own a home but do not have large upfront funds to purchase a house outright. It leads to a situation where only the wealthy or those with access to illicit resources have enough funds to make upfront payments for new homes. “I am convinced that the quest for funds to make these large payments rather than have them spread over time contributes to petty corruption and governance problems as people squirrel away money to buy houses.”

Buhari and housing
With the coming of the All Progressive Congress (APC) – led government, the party promised to amend the constitution and the Land Use Act to create freehold/leasehold interests in land along with matching grants for states to create a nationwide electronic land title register on a state by state basis.

Buhari also pledged to create an additional middle-class of at least two million new home owners in the first year in government and one million annually thereafter by enacting a national mortgage system that would lend at single digit interest rates for the purchase of owner occupier houses.

Thereafter, the country’s economy was dragged into recession, and the housing industry was the worst hit. A year later, in 2017, the impact in the sector was grievious and developers have to swallow the bitter pills. A lot of them reappraised their investment strategies to remain afloat while others give incentives to would-be buyers.

The recession was exacerbated by the Economic and Financial Crimes Commission (EFCC) which focused attention on the real estate operators to track money laundering in the sector. The concerns halted, what may be the transactions in the highbrow areas, which led to high vacancy rate for luxury properties.

Four years after, there was a lack of political will to make the National Assembly amend the 1979 Land Use Act which stakeholders, see as a cog in the wheel of housing development and converting land resources into individual wealth in the country. Currently, the mortgage system remains a treacherous path for prospective homeowners. There are concerns by contributors to the National Housing Fund (NHF) on the impact of the scheme on providing leeway for home ownership.

But NMRC seems to be providing succour to the mortgage system. The NMRC had refinanced mortgage loans totaling N18billion as at December 2018.This is in line with the company’s mandate to promote affordable home ownership in the country by leveraging funding from the capital market to deepen liquidity in the primary and secondary mortgage markets.

NMRC refinances mortgage loan portfolios of its member primary mortgage lending and commercial banks that comply with its uniform underwriting standards. The Managing Director/Chief Executive Officer of NMRC, Mr. Kehinde Ogundimu, stated that the company was working hard to further boost its refinancing operations.

He said: “The deployment of the N18billion to refinance mortgage loan portfolios of member lending institutions has helped to boost liquidity in the Nigerian housing market, thus enabling mortgage lenders to provide more housing loans and encouraging long-term mortgage loan creation.”

In another landmark move to boost housing development in the country, the Federal Mortgage Bank of Nigeria (FMBN) in conjunction with the Nigeria Labor Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers’ Consultative Association (NECA) commenced the implementation of a National Affordable Housing Delivery Programme for Nigerian workers.


The housing scheme is a product of a strategic collaboration between FMBN and the country’s leading labour unions towards gradually addressing in a structured and sustainable manner the housing requirement of their members currently estimated to be about 3,750,000 housing units.

The pilot phase, which began last year, will deliver 2,800 housing units in 14 sites across the country. This includes 200 houses in each of the six zones in addition to Lagos and Abuja.    The groundbreaking ceremony of the project was held at the 100-unit housing estate for Voice of Nigeria (VoN) in Abuja, Federal Capital Territory. This will be followed by successive launches of the programme in two states: Yola, Adamawa and Umuahia in Abia.

Besides, the administration also launched Family Homes Funds, a Social Housing Programme initiated by the Federal Government to provide inexpensive mortgages for low-income individuals and families across the country.Under the Family Home Fund scheme, which is domiciled in the Ministry of Finance, civil servants who earn a salary of N30, 000 and above can have access to mortgages to own a home.
The Managing Director of Family Homes Fund, Mr. Femi Adewole, said that the programme was set to boost cooperative housing through its rolled out funds. Adewole said that Family Homes Funds which was a special purpose vehicle for financial institutions was primarily to facilitate the production of about 500, 000 homes and over 1.5 million job.

He said that the programme had four pillars of funds to achieve home ownership namely Affordable Housing Fund, Home Loans Assistance Funds, Rental Housing Fund and Land and Infrastructure Fund.The Office of Head of Civil Service of the Federation (OHCSF) launched a Federal Integrated Staff Housing (FISH) programme in Abuja and three states, namely Cross River, Nasarawa, and Niger to assist in solving housing challenges of civil servants.

On December last year, the first phase of 151 housing units in Kuje, Federal Capital Territory was commissioned. ‘‘The overall objective of the FISH programme is to improve the quality of life of civil servants and their families, “ according to Mrs. Winifred Oyo-Ita, the Head of the Civil Service of the Federation.

FISH is to be implemented as an inter-ministerial and public-private partnership project, with active collaboration with state governments and federal agencies. Over 55,000 civil servants have so far subscribed to the FISH programme initiated in 2016. Out of this figure, only 32 of them received their keys in December.

‘‘We believe it will help to foster a multiplier effect on the economy and reduce corruption in the public service, in line with the Federal Government’s anti-corruption drive,’’ she said.Despite all these moves and huge population of Nigeria, provision of housing without a proper policy seems like a drop in the ocean.

Amid all these concerns, the then Minister, Power, Works and Housing, Babatunde Fashola believed the government is on the right path to achieve sustainable growth in the provision of housing.The minister said public buildings like the federal secretariats in Zamfara, Bayelsa, Nasarawa and Ekiti and the Zik Mausoleum in Onitsha had now been practically completed, pointing out that the pilot National Housing Programme (NHP) had led to a nationwide housing construction being undertaken in the 34 states where government had received land.

He said that construction at these project sites was an ecosystem of human enterprise where artisans, vendors, suppliers and craftsmen were direct beneficiaries as well as contributors to nation building.“No less than 1,000 people are employed on each site apart from the staff of the successful contractors,” he said.

Fashola said that parastatals like the Federal Mortgage Bank of Nigeria (FMBN) and the Federal Housing Authority (FHA) were also contributing, while policies like the reduction of equity contribution from five per cent to zero per cent for those seeking mortgage loans of up to N5million, and reduction from 15 per cent to 10 per cent for those seeking loans over N5million were helping to ease access to housing.

“We are at different stages of construction in different states, and we have recommended these designs to FHA, without imposing them. Our decision is informed by the evidence of previous housing initiatives that people did not take up and empty houses that still abound in almost every state of Nigeria.

“These houses that are not taken and the deficit of housing, suggests to us that the houses not taken are either unacceptable or unaffordable or both. We see housing as a product, and we take the view that before they can be delivered to market, we must know what the people want and what they can afford. When our pilot is fully completed, these answers will become self-evident and this is when we can mass-produce.

“There is certainly nothing that stops FHA from undertak ing other designs of housing if it can find a market for them, and it can deploy the income to cross-subsidize and make mass housing more affordable. According to the minister, the ministry was also tackling the backlog of issuance of consent and certificates of occupancy to Federal Government’s land, adding that a total of 1,216 application for consent to transfer interests in land application and 1,300 certificates of occupancy have been approved and signed respectively as at October 25, 2018.

“With careful thinking, planning, and a dedicated team of public officers, we have a firm foothold on our way to the top. Our policies have shown what is possible with critical sectors recording growth.“What remains is time that it takes for the full harvest of the fruits of our policies in plenitude and prosperity of our people. We cannot go back to the bottom of the mountain when the plateau is now within reach,” he said.

For the experts and developers, it is not yet uhuru for the housing industry. Former President Nigeria Institute of Builders (NIOB) Chuks Omeife told The Guardian that “except government changes its focus and align with the existing housing policy not much will be achieved by the administration in terms of housing for the Nigerian people.” Making impact on the issue of housing will be based on government’s deliberate plan, determination and commitment to provide Nigerians with what are now tagged dividends of democracy.

“While housing is a critical constitutional provision, successive administrations have continued to pay lip service to this all important human need covered by the United Nations pronouncement on government responsibility to provide a decent and affordable housing to their people.

Although the Chairman, Board of Trustees, Real Estate Developers Association of Nigeria (REDAN), Oluseyi Lufadeju said the issue of housing and urban development was not clearly articulated in the party’s manifesto beyond the mention of one million houses to be delivered yearly, he submitted that “ in the last four years a lot has happened in the sector. The government has done well in consolidating progress in strengthening the FMBN and NMRC. The establishment of the Family Home Fund was a welcome news to estate developers because of its special attention to the low and medium income people.

“Most importantly, the Central Bank of Nigeria, in collaboration with REDAN and other institutions laid a solid foundation for the National Real Estate Data Collation and Management Programme.  This is a major achievement for the administration.  After 59 years of independence, we can now be sure of accuracy of data and information on housing conditions, prices, funding, local variations etc all over the country. This will enable the government to have a better and more efficient and informed basis for planning during the second term of Buhari administration.”


Lufadeju stressed: “The Ministry of Power Works and Housing made efforts to develop housing all around the country. While appreciating these efforts, they were not enough to reduce the housing shortage. In the new dispensation, it is strongly recommended that government should not go into direct construction of houses but should assist, encourage and facilitate the private sector, especially REDAN to deliver houses all over the country. The government should concentrate on providing and improving infrastructure and services.

“Serviced land should be made available in order to reduce the growth of slums and squatter settlements. Deliberate efforts should be made to rid all our major towns from being surrounded by slums and poorly maintained settlements. The issue of the Land Use Act should be finalised in response to needs of bankable documents in the housing sector.”

Zubairu advised that Nigeria implement a comprehensive training and certification programme for artisans. “Cognisance should be taken of new emerging building materials and technological development in tools for building construction such as electric mortar application machines,” he added.


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