Addressing Housing Deficit In Nigeria  

By Lilian Chukwu

By some accounts, Nigeria’s home ownership rate, currently put at 25 percent, is very low when compared with the housing situation in some developing and developed countries.
Available statistics show that Benin Republic has home ownership rate of 63 percent; Kenya 73 percent; Singapore 90 percent; the U.S. 70 percent; South Africa 56 percent, and Libya 41 percent.
Commenting on the housing situation in Nigeria, President Goodluck Jonathan said that the country needed a minimum of N56 trillion to be able to bridge a deficit of 17 million housing units.
He said that the shortfall, which did not cover the cost of providing infrastructure, translated to an average cost of N3.5 million per housing unit.
Housing experts note that the housing deficit has continued to increase; saying that the development indicates that the government’s housing policy is not working as expected.
They note that the deficit rose from seven million housing units in 1991 to between 12 and 15 million units in 2008, while peaking at between 17 and 18 million units in 2012.
They insist that the deficit would continue to rise until the financial authorities are able to bring down interest rates to a single-digit level, so as to enable low income earners access mortgage loans.
Mr Gimba Ya’u Kumo, the Managing Director, Federal Mortgage Bank of Nigeria, said that something urgent must be done to bridge the housing deficit.
“If nothing is done, there will be an estimated homeless population of 24.4 million people in Nigeria by 2015,” he said.
Mr Chudi Ubosi, the Chairman of Association of Estate Agents of Nigeria (AEAN), blamed the poor housing delivery in Nigeria on the short mortgage tenure system in the country.
According to him, only a few primary mortgage institutions in the country give mortgage loans that are repayable beyond 10 years.
Ubosi also described the 17 percent interest on mortgage loans as very high, as against three to five percent charged in developed countries.
“The financial institutions in the country offer loans not mortgages. This is because mortgage tenure, as practised in many countries, is beyond a minimum of 20 years.
“In other countries, mortgage is given out at low interest rate but in Nigeria, those who need mortgage cannot access it,” he said.
Ubosi said that the high mortgage interest rates had discouraged many investors and Nigerians from aspiring to own their own houses.
He suggested that mortgage loans should be given out by mortgage institutions at single-digit interest rates.
However, Mr Olayemi Shonubi, the Chairman, Nigerian Institute of Quantity Surveyors (NIQS), said that government could bridge the housing deficit by encouraging a pragmatic partnership between the public and private sector.
He suggested that individuals and organisations should be encouraged to come together to form housing cooperatives, as part of efforts to boost housing delivery.
Shonubi, however, advised the government to make land available to estate developers across the country in order to accelerate the construction of affordable houses.
Sharing similar sentiments, Prof. Timothy Nubi of University of Lagos identified difficulties in acquiring land as one of the factors responsible for the housing deficit in the country.
He said that the Land Use Act of 1978, which should have been an instrument of addressing land ownership and titles, turned out to be counterproductive.
He stressed that problems encountered in title transfer and registration in Nigeria could be traced to perceptible defects in the Land Use Act of 1978.
Nubi said that under the Act, only the governor of a state had the power to issue a Certificate of Occupancy.
“This would have been okay if not for problems associated with time wastage, expensive processing and endemic corruption which undermines property transaction and investment,” he said.
Nubi also underscored the need to reduce the costs and bottlenecks in efforts to obtain title documents.
“The governors’ consent for transfer of title should not be more than one percent of the value or cost of the property.
“The processing time for title registration and governors’ consent should not be more than 15 days.
“The practice of asking for numerous supporting documents such as tax clearance, development levy, tenement rates, should be entirely removed as a requirement for the processing of title transfer.
“Government should also deploy more human, financial and technical resources to man the processing offices so as to curtail bureaucracy and reduce the level of corruption associated with it,” he said.
All the same, Mr Chucks Omeife, the former President of Nigerian Institute of Building (NIOB), urged the government to check the rising cost of building materials.
He said that the increasing cost of some building materials had discouraged investors from investing in the construction sector and low income earners from building their own houses.
“The development of our housing sub-sector may be hampered if the prices of building materials continue to rise unchecked because the cost of iron rods, window and door frames and other building materials are all escalating,” he added.
Omeife, nonetheless, appealed to the government to subsidise the prices of building materials so as to boost activities in the real estate sector.
He particularly stressed that low income earners would gain a lot from government’s efforts to reduce the cost of building materials.
All in all, housing experts agree that one of the pragmatic ways of redressing the housing deficit in Nigeria is to make building materials affordable to the less affluent members of the society, who constitute the larger percentage of the population.

•Chukwu wrote this article for  News Agency of Nigeria (NAN).