According to Maslow’s hierarchy of needs theory, shelter is one of the basic needs of man and ranks next only to air, food, water and sleep. This underscores the importance of housing to the well-being of people. In Nigeria there is a housing problem.
It has been estimated that the country has 17 million housing deficit, according to World Bank, UNDP and industry experts as well as those that have done research on the sector. You can therefore imagine the consternation and bewilderment that many received the illogic from the minister of Works and Housing, Babatunde Fashola, that there is nothing like housing deficit in Nigeria.
Speaking in Abuja at the inauguration of the Board of Directors of the Federal Housing Authority (FHA) recently, Fashola argued that the housing deficit claims had no scientific and logical basis. He said,
“There is something out there before we came in that Nigeria has housing deficit; it’s a lie. “Unfortunately, it was a document that originated from this ministry in 2012. It has no scientific basis, nor logical basis; so ignore it.” Fashola said the housing problem was an urban problem, stressing that people who rented houses in the urban centres had empty buildings in their villages. “Whether in Lagos, Kaduna, Abuja or Ibadan, we see empty and unoccupied houses and we need to begin to understand this problem,” he said. He said it was time to begin to think on how to unlock and bring the empty houses into the market. “If we have things that are not used, does it make sense when we say that we have deficit of things available but not used?” the minister asked.
A few days after claiming that Nigeria has no housing deficit problem, the minister contradicted himself when he said that his ministry is involved in construction of housing estates in 34 states of the federation under the National Housing Programme (NHP) among others.
Which begs the question, why construct housing estates in 34 states if there were no deficit in housing stock or is it that the country has no other areas of need that such resources should be channeled to? It was obvious that the minister was speaking from both sides of his mouth like many people in government. Contrary to what the minister of works and housing wants Nigerians to believe there is high housin deficit in the country and not due to a document from 2012 from th ministry of works and housing as claimed by the minister. In the Economic and Financial review publication of the Central Bank of Nigeria issued in December 2019, there was an article with a focus on housing deficit in Nigeria. In this article, housing deficits across six African countries from 2016-2019 were compared and Nigeria had the highest with 18-22 million housing unit deficit as at 2019, while other African states in the comparison table did not exceed a 2.5 million housing unit deficit. This article also shows the trend of housing deficit in the country and its cause. It shows that as Nigeria’s population increases, the housing deficit also increases.
The causes over the years have changed from mortgage inefficiency, slum demolition, urban migration to over population, urban expansion and increased poverty. This shows that it is not a ministry document from 2012 that first indicated that Nigeria has a housing deficit. It is estimated that Nigeria has a deficit of 17 million houses as of August 2012 and requires 700,000 houses annually compared to less than 100,000 currently being constructed (NBS). Ironically the cost of building a house in Nigeria is relatively higher while the average income level is relatively lower compared to global average. This means even when there is a supply of housing units, the price tag whether self-built or off the shelf purchase is out of the reach of majority of Nigerian workers thereby making affordable housing still a dream. The indication of this high housin deficit is that tenants in rented apartments pay as high as 60 percent of their disposable income which is 20 percent higher than what the United Nations recommended. Challenges facing the housing sector in Nigeria include; Land tenure system, high cost of infrastructure, government bureaucracy, inadequacy of housing information system, taxation, high interest rate and inflation, naira devaluation, rural-urban migration, high cost of property development, bribery and corruption and mortgage issues.
A 2018 World Bank report “Nigeria Affordable Housing Project” says the biggest constraints to the country’s housing sector are “access to land, lack of infrastructure and service provision, difficulties with construction permitting, high cost of development finance, high construction costs, and lack of skilled labor.” “On the demand side, major constraints include access to end user financing, lack of disposable income for housing, and the cost and time of foreclosing.”
The report adds that the private sector is critical in making housing available and affordable in Nigeria, as the government cannot do it alone. “The government does not have the resources to close the monumental deficit of affordable housing. Property developers cite the need for public support to address the demand and supply market failures before private capital will come in. Demonstrating a successful (and profitable) model to the private sector will be critical to unlock private investment,” the report noted.
In order to solve the 17 million housing deficits in Nigeria, and achieve sustainable housing delivery in the country, government and stakeholders should adopt some practical measures that include a review and total implementation of the National Housing Policy (NHP). The major aim of housing policy is to solve housing problems. Majority of the Nigerian residents are low income earners that cannot afford housing being produced under the programme. The national housing policy should be reviewed in line with the unique diversity of Nigeria’s cultural inhabitant as well as the financial, human and material strength. The policy when revised should be implemented totally.
A viable mortgage system will strengthen home ownership. For example a mortgage system where rent payment will lead to owning a house. This system will afford the low income earners the opportunity of owning an apartment after many years of paying rent to the mortgage institution. From being a tenant, they become a landlord. Government should therefore come in to provide the enabling environment by encouraging mortgage. The process of building plan approval and issuance of certificate of occupancy should be made faster and less cumbersome. The cumbersom property registration processes are major barriers to housing development and home-ownership, leading to the country’s huge housing deficit.
The revision of the cumbersome property registration process, acquiring land title documents and transfer will bring the needed improvement and growth to both the housing and mortgage industry in the country. Government should consider public housing as a form of social responsibilities considering that the financial arrangement with the mortgage institutions may be beyond the reach of low income earners in Nigeria.
The private sector should be encouraged in housing production with the aid of incentives, loans and subsidies and building land should be readily available and accessible to potential builders. Local building materials should be encouraged and also mass production of building material. This will make the materials to be affordable t the poor. Rental housing are still very relevant and should be incorporated into the housing policy especially based on the demographic and resource pattern of each state either in form of subsidized housing or incorporating social housing into the policy.
Government should make provision of more infrastructures like bor holes, electricity, road connectivity and drainage among others it priority especially within the new housing locations.