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How Foreclosure Law, Funding Impede Housing Development



CHIKA OKEKE writes that the absence of foreclosure law, special intervention fund and non-utilisation of local building materials are part of the problems militating against housing development in Nigeria.

The provision of habitable, safe and secured shelter is a fundamental human right as enshrined in the Article 25 of the Universal Declaration of Human Rights and International Covenant on Economic, Social and Cultural Rights.

But, the flagrant neglect of town planning laws in Nigeria led to urbanisation with its attendant consequences such as insecure land tenure, poor and inadequate infrastructure, pollution, health challenges, poverty and lack of basic urban services.

However, stakeholders are worried that absence of foreclosure law, funding and land titling are part of major challenges militating against housing development. Specifically, there are concerns that land and titling accounted for about 20 percent of housing delivery costs in Nigeria compared to 8 percent in India and South Africa.

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender, by forcing the sale of the asset used as the collateral for the loan.

While building materials and labour accounted for 25 percent of delivery costs in the country, India and South Africa have 21 percent and 16 percent respectively.

Surprisingly, Nigeria’s land titling and registration system is almost moribound irrespective of its status as the ‘Giant of Africa’.

This is why not more than 3 percent of the nation’s land has been properly surveyed and registered.

Added to this is the fact that Section 43 of the 1999 Constitution of Federal Republic of Nigeria also recognised the right of every citizen in Nigeria to acquire property especially land and its resources.

Notwithstanding the existing right, Nigeria is challenged in the provision of affordable housing for low income earners, that constituted over 80 percent of the workforce.

Though the private sector are gradually building houses across the states but most of the existing structures are hardly affordable for low income earners.

This has been blamed on dearth of skilled manpower, difficulties in land acquisition, substandard building materials, delay in governor’s consent who are the custodians of lands, absence of infrastructure, absence of long term finance, bogus interest rate and among other impediments.

However, Nigeria is battling to address the over 18 million housing deficit given some housing programmes initiated by the APC led federal government.

To this end, experts in the realty sector have pleaded with the federal government to address the mounting problems crippling the provision of affordable housing in 2019.

The chairman of JEDO investment limited, Alhaji Aliyu Oroji Wamakko pleaded with federal government to resolve the absence of special intervention fund in the housing sector, just like it was done in the agriculture sector.

Wamakko believed that the failure of government to provide intervention fund is the reason for high interest rate and high cost of houses in the built sector.

According to him, “With lower interest rate and special intervention fund for housing development, we (investors) will be able to provide houses at a very cheaper price”.

Wamakko who is also the vice president, Real Estate Developers Association of Nigeria (REDAN) requested that federal government should subsidise the prices of its houses for low income earners.

He emphasised that REDAN has always advocated for the enactment of closure to safeguard realty investment in case of default by off-takers.

In his contribution, a real estate developer, Arc Adewunmi Towolawi Okupe said that he least expected any significant increase in the performance of the sector since there is no drastic change in the system of governance in the country.

He emphasised that the value of naira to dollars is too weak for any meaningful development in the country, just as he feared that the Chinese loan might launch the country into the era of slavery.

Okupe disclosed that Nigeria has well formulated policies that are poorly implemented, pointing out that the anti-corruption policy of the present government would have aided in sanitising the system except for the weak legal framework.

He further lamented that federal government is partial in the dispensation of justice.

On the National Housing Programme (NHP), he said that the four key points mapped out by the current minister failed to address certain contents of the past housing policies.

He pointed out that the current policy concentrated more on the housing product without addressing the external parameters that impinged on the cost and provision of sustainable housing.

To this end, he noted that there is a need to harmonise the national housing policy with other factors of development that impinged on housing provision like economic, social, environmental and infrastructure issues.

He wondered why government failed to provide adequate infrastructure to boost affordable housing, adding that good infrastructure and accessible land would significantly increase the housing stock.

Okupe pegged the cost of infrastructure charged to beneficiaries in most private estates at N1.5 million per house, which he said is enough to build a house for the minimum wage earner.

The expert asserted that the lip service extended to the development and utilisation of local buiding materials is another area that required urgent intervention, even as he inquired the number of government owned estates springing up utilised locally manufactured building materials. 

He added, “Even the gate houses in government quarters are never built with such materials, therefore the lack of political will is a major issue towards the implementation of housing policies”

While pointing out that the implementing institutions are very weak, he maintained that the number of houses for each state could neither make any significant improvement in the housing deficit, nor act as a catalyst in the entire housing delivery programmes.

Lending his voice, the former president of Nigerian Institute of Town Planners (NITP), Tpl. Steve Onu pleaded with federal government to be more proactive on planning for human settlement, a situation he hoped would translate to the provision of affordable housing in 2019.

He hinted that affordable housing in a private sector driven environment would not be achieved without subsidy.

Onu emphasised that Nigerians should not be deceived considering that the modus operandi of affordable housing in other countries is incomparable with the current housing programmes in the country.

He linked the success story of Singapore to the election of a strong leader that has vision and political will, saying that the country has well structured institution to implement government policies and programmes.

He pointed out that since the previous government in Nigeria drafted a national housing policy since 2012, that the incumbent minister, Babatunde Raji Fashola was supposed to have studied the policy and compelled relevant agencies to come up with action plans for the achievement of the sectoral goals instead of embarking on a pilot project for a National Housing Programme (NHP) that might not address the housing challenges.

Onu noted that though Singaporean government has private developers that the Housing & Development Board (HDB) is busy building houses for a target group noting that the houses are allocated based on need and not sold in the open market as done in Nigeria.

HDB is the statutory board of the ministry of national development responsible for public housing in Singapore.

The expert asserted that no individual owns more than one public housing in Singapore even as he regretted that Nigeria could hardly make progress since the president or governors do not believe in rule of law.



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