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Revamping Housing Sector To Bolster Economic Growth



CHIKA OKEKE writes on the need for governments at all levels to join forces with stakeholders in order to bolster the housing sector as a major source of revenue for the country.

Infrastructural development of any nation’s suggestive of the extent of its growth. From North America to South America, Europe to Asia, the housing sector has contributed immensely to the growth of national economies of continents.

While the housing sector in the United States contributes 36 per cent to the Gross Domestic Product (GDP), South Africa had 30 per cent but in Nigeria, its five per cent. This could be linked to the mirage of problems bedevilling Nigeria’s realty sector like unskilled manpower, difficulties in land acquisition, incessant building collapse due to use of substandard materials, delay in governor’s consent, absence of long term finance, bogus interest rates among other longstanding impediments.

Surprisingly, the shortage of liveable and affordable housing has continued to weaken the sensibility of low and medium income earners who constitute over 80 percent of the workforce.

With a housing shortage of over 17 million units, there is a need for federal government to evaluate various housing policies formulated by past administration that are already gathering dust if the housing sector could act as the mainstay of economic growth. Despite the pitfalls, realtors have suggested that an energised housing sector would revamp Nigeria’s economic recovery strategies.

President of Quantity Surveyors Registration Board of Nigeria (QSRBN), Mallam Murtala Aliyu said that building, construction and real estate sector of the economy are amongst the most strategic sectors of any economy, noting that its impact could be seen in all sectors of the global economy. 

He pointed out that the capacity of the building and construction sector to generate employment on a massive scale, its multiplier effects in the overall economy and its vital contribution to the country’s fixed capital formation and investment makes it an important sector.

While describing it as a strategic sector that would economic growth, he stated that no country would achieve sustainable economic growth and development without engaging its teeming youths in viable economic activities.

Aliyu emphasised that Nigeria and Africa must save the resourceful youths from moving to Europe for demeaning engagements, adding that many lost their lives in the Sahara or the Mediterranean Sea before arriving their destination. He assured that President Muhammadu Buhari led administration is evolving a strong policy to make remaining at home more attractive, saying that the building and construction sector is the target of the policy.

In his contribution, a real estate expert, Mr. Victor Mayowa regretted that federal government is yet to understand that a virile housing sector is critical to economic recovery. He asserted that federal government’s partial interest in agriculture and solid minerals is a fundamental error in visioning even as he wondered if the two sectors could spur economic growth.

“We have seen projects like the National Housing Programme (NHP) all over the place all the time. What is the philosophy behind it? How does it fit in within the overall housing delivery strategy in the short, medium and long terms? Is the housing delivery architecture sufficiently reconfigured and strengthened to guarantee the sustainability of the project?” he queried.

Mayowa lamented that the mortgage sub sector is virtually dead, stressing that it is impossible to create virile housing sector without vibrant mortgage sub sector. He emphasised that there are Nigerians with vested interest in government and the Central Bank of Nigeria (CBN) that have refused to allow the sub-sector to utilise its full potentials.

The expert stated that the 2.5 percent contribution to the National Housing Fund (NHF) cannot create adequate number of mortgages given the low salaries paid to workers in the public and private sectors.  Mayowa hinted that the 30 year roadmap which the former minister of housing, land and urban development, Mrs. Amal Pepple unveiled during her tenure addressed all the burning issues in the sector.

He pointed out that Union Homes Savings and Loans Limited and several mortgage institutions are in a state of comatose, stressing the need for the present administration to prioritise housing.

Lending his voice, former president of Nigeria Institute of Town Planners (NITP),  TP Steve Onu asserted that the problems in the sector is majorly from the ministry of power, works and housing who failed to initiate programmes for implementation of the provisions of the policy.

Also, the Convener of Abuja International Housing Show, Barr. Festus Adebayo said though the minister of power, works & housing, Babatunde Fashola informed that the NHP is currently on going in all the states that Nigerians are yet to know the actual beneficiaries of the project. He disclosed that Nigerians are still wondering if such houses would be purchased through NHF or outright sale and the cost of each unit of the houses.

The convener said, “If the present government is interested in National Housing Policy document of the previous administration, they would have looked into it and adopted it other than starting the NHP that only focused on building of few housing estates in each of the states”, he said

Adebayo revealed that it is only the minister and his team that would provide useful explanation on how they resolved to build about 70 units of housing in each state, adding that the project would be abandoned soon. Irked by over 17 million housing deficit, the federal government has revealed that Nigeria needed about N80 trillion to unlock huge investment potentials inherent in the housing sector.

Managing director/chief executive of Federal Mortgage Bank of Nigeria (FMBN), Arc. Ahmed Musa Dangiwa however appealed to all levels of government and stakeholders to consciously promote and sustain efforts aimed at boosting development in the country.

Dangiwa pleaded with local and international investors to tap into the potentials, saying that such potentials would transform the economy and propel national development. He said though all current indices are negative but the opportunities for growth and national development are unquantifiable, noting that housing promotes socio-political stability.

He asserted that the quantum of housing deficit opened up huge potentials for mobilisation of investment  into the sector particularly Foreign Direct Investment (FDIs), saying that FDIs would boost the economy and expand access to housing finance.

He disclosed that access to mortgages by Nigerians would be enhanced through the consequential availability of mortgage-able assets. Dangiwa confirmed that in most developed countries, that the housing sector is the bedrock of the economy and an important tool for stimulating growth.

However, the minister of power, works and housing, Babatunde Fashola emphasised that Nigeria recovered within one year of economic recession due to heavy investment in the construction and building sectors.

Fashola revealed that the National Housing Programme ( NHP) of the current administration is the second in the history of Nigeria as an independent country, saying that the project has created not less than 14, 000 direct jobs and 40, 000 indirect jobs for builders, petty traders, food vendors and among others. 

The minister described the construction sector as one of the most important sectors in any economy, noting that apart from generating employment that it has multiplier effects on other sectors.