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Liberalising House Ownership Through Equity Financing

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As Nigerians grapple with the problem of mounting housing deficit, hope rises in the horizon for the poor who populate the informal sector with “Build for Nigeria,”- a new local model that runs on very low equity pool and zero cost to government EMAMEH GABRIEL writes.

Access to shelter by the poor and even the middle class is one of the main challenges facing government and policy makers in Nigeria. This follows poor policy implementation or abject lack of it in the housing sector in the face of huge urban migration and uncontrolled population explosion.

For decades, successive governments have been enormously challenged with the provision of affordable human settlements. Though various policies have been put in place to address housing problems, particularly for low in-come earners, but most of these policies have hardly changed anything.

Much of government’s efforts are focused on the provision of subsidised housing in bid to bridge the evet-increasing housing deficit but no one actually builds for the poor and those at lowest rung of societal ladder.

The National Bureau of Statistics (NBS) prijects that the nation’s housing deficit stands at about 17 million. This means that there are about 85 million Nigerians in desperate need of roofs over their heads. Translating to over 50 per cent of the nation’s population of estimated 180 million people.

Shelter is the most important of human needs after food. As such, man pulls together all his efforts to ensure that he gets where to lay his head.

Housing has been identified from various fronts as very important in enhancing the health and social-economic welfare of citizens, translating to the fact that home ownership enhances the sense of self-worth in an individual and ministers to man’s rights to dignity of his human person.

Over the years, there has been half-hearted addressing of the ever-increasing housing cost, limited access to land and housing finance,  regressive land taxation, and low supply of subsidised housing, all of which have pooled to make it difficult for the poor, and low income households to own homes.

Given all of these, experts in the housing sector have argued that private sector housing initiatives remains the way to go.  A peek at Nigerias mortgage policies in over the years equally leaves much to be desired.

At the moment, experts, policy makers, key players and professional bodies interested in housing sector have unveiled a new roadmap that will not only guarantee shelters for the ordinary Nigerians but also provide a vast array of job opportunities for Nigerians.

‘‘The approach changed from government-led approach to housing delivery to private sector-led approach in housing delivery but the problems that inhibited growth in the first approach are still present in the new approach. We have not addressed them,’’ Dr Paschal Onyemaechi, a researcher in public private partnership, PPP and urban housing said during a presentation before the Senate Committee on Works, chaired by former Kano State governor, Senator Kabiru Gaya.

Dr Onyemachi through research propounded a PPP low-income housing model which has  further been developed into a pro-poor housing programme called “Build For Nigeria,”  told our correspondent that “the new model is capable of substanscially addressing the housing challenge.” The initiative is now being leveraged by the Committee of Vice Chancellors of Nigerian Universities-CVC as a suitable model for addressing the challenge posed by student’s hostel accomodation in public tertiary institutions in Nigeria.

“Build for Nigeria” deeply takes into consideration affordability and the informal sector where bulk of the Nigerian population operate.

“The issues are source of suitable and  sustainable housing finance for the low-income and poorer groups in the informal sector and the lack of suitable model that administer housing finance in the informal sector.

The model that will work must overcome these two challenges to be able to tackle affordability and deliver to the targeted group. You will agree with me that the Nigeria’s informal sector is characterised with too many informalities, starting from identity issues, small and irregular income to the uncertianties of informal settlement. These have to be considered before you can offer a workable framework.

“When I say pro-poor housing, I mean pro-poor in all intents and purposes. The  design, financing model, accessibility, participation and so on, not pro-poor with elistic assessment criteria. That method will not achieve the desired result even in the next 50 years . In fact, most of those difficult criteria automatically excludes the poor and pave way for the rich and powerful to strengthen their position in the market and this is why the deficit figures keep growing,” Dr Onyemachi said.

According to him, “The very interesting contribution from this new thinking (Build for Nigera) is that the model does not require funding  from the national budget to operate. It thrives on equity funding.

“I can’t remember any  country that have achieved affordable housing for its poorer citizens through commercial mortgage, none. The lead question is how do we make millions of poor Nigerians own  decent homes without having millions in their pocket?” The answer has led us to the new model. An appraoch that combines a demand and supply side solution.The major objective of the programne is to provide a pool of equity-based fund for implementation of low-cost housing for low income earners in the informal sctor, slum upgrades and provide decent accomodation for students at public tertiary institutions in Nigeria.

“The second objective is to enhance access to housing finance for the bottom 40 per cent of our population. It provides a plartform to effectively and efficiently harness the opportunites in the sector to create an equity fund,” he revealed.

“Build for Nigeria” housing programme is designed to accommodate different categories of low-income Nigerians, ranging from those living in the slumps, to petty traders, market women, okada riders, young start-ups, indigent students  (in the case of hostels accommodation in tertiary institutions) etc.

Dr Onyemachi also revealed that the new model has substantially overcome some of the leading issues in the Land  Use Act that have inhibited growth for too long. “From the starting point we were set to have a model that does not depend on government, that focuses on the groups with critical housing problem and a model that has capacity to overcome the existing challenges. This is what we have today and now it is a challenge to all of us, policy makers, civil society , experts in subject area and so on. That we have a model that can substantially address the housing challenge in Nigeria and improve the living condition of the poorer groups at no financial cost to the government, is one of the best gifts any government can give to its citizens,” he disclosed.

This model, designed to operate on a low-cost, no-cost funding structure to the government has received positive comments from leading national and regional agencies with global mandate in housing and human settlement; especially as it targets vulnerable groups, lowest in the income ladder, young school leavers, start-ups at very low concessions and students in tertiary schools.

More good news is that the initiative also targets more than a million jobs  in building and construction industry, micro finance, ICT, education, energy and so on. Decent and affordable shelter for students will also reduce crime and promote quality output from the university system.

Apart from the Committee of Vice Chancellors of Nigerian Universities-CVC , the ICRC , FHA , UN-HABITAT and Affordable housing institute,  Boston, United States have shown interest in the model.  Though the framework and details of the implementation strategy  of the new framework has been published and presented to the federal government by the CVC , Dr Onyemachi notes that some level of legislative backbone will be required from the National Assembly to operate the model at a scale it would make maximium impact.

“This is an excellent initiative that deserves the support of everyone especially as it will promote better standard of living for the poorer groups, Senator Gaya said. He praised Dr Onyemachi for  bringing forth a research outcome that would benefit the nation.  “This is what we want from our young professionals,  a contribution to national development, the academic rigour you have demostrated in reaching to this level of solution is commendable,” Gaya  added. The senator equally noted that the initiative will require some legislative back ups.





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