HOUSING DEFICIENCY IN NIGERIA BY SAMUEL, UGOCHUKWU DANIEL
The right to housing is a universal right of which everyone is entitled to. It is quite unfortunate that the desire to amass wealth by private individuals and the underperformance of national governments on the need to adequately provide housing services to its citizenry has deprived majority of individuals to access this right. The idea of capitalism in most countries of the world brought in the idea of private enterprise and ownership including in real estate. This is not just limited to the capitalist economies but also to economies of a mixed setting.
In 2015, the World Bank estimated Nigeria’s population to be 182.2 million, by 2020, Nigeria’s rose to about 2.2 million accounting for over 47 percent of West Africa’s population. Nigeria is rapidly urbanising: about half of the population already lives in cities and this is anticipated to increase to 75% by 2050. In 2019, about 40.1% of Nigeria’s population lives below the poverty line. Poverty remains highest in rural areas and moderate in urban areas. These Indicates the need for more cheap and affordable housing both in rural and urban areas.

Unlike the developed nations where the cost of building is fairly stable, the cost of building in Nigeria is rising. For example: in 2015, the price of cement rose from ₦1, 500 – ₦1, 600 to ₦2 200 – ₦2, 400 while in 2020, it increased to ₦2,550-₦2,800 on retail. This increase in cost of building equipment has also spread to other equipment thereby increasing the price of housing. Anthony Chiejina, group head of corporate communications at Dangote, indicated that the increase is largely due to the acute shortage of forex, devaluation of the Naira, and an increase in the energy price of gas.

In Nigeria, it is noteworthy to say that we lack quality housing infrastructure at least for the greater population. Best and well-spaced houses are built in selected areas of cities thereby creating a divide between the rich and the poor. Home prices in such selected areas had so gone up that the common or middle income Nigerians cannot afford them. It is also noteworthy that majority of Nigeria are within the low and middle income brackets thereby making them less opportune to afford such luxury houses. Imagine a scenario whereby a family man with say three kids and parent earns barely ₦30, 000-₦50,000 per mouth (which is usually the case of large portion of the total population) in a setting where the least affordable house rent per year is ₦250,000 for just a single room and parlour with little space. This has left most citizens with the option of seeking other alternative such as moving back to the rural areas (which is likely to cost him his job) or settling for what is called “face me I face you” (a single room apartment with no space).
The 2007-2009 financial crisis was caused by the bubble in the housing prices. This stands to tell you how financialized the housing sector has become. The private sector (rich investors) has seized the opportunity of the under supply of housing to amass excess capital for themselves thereby neglecting the basic need of humanity which involves the right to shelter (good housing facility).
The idea of mortgage is more practiced in advanced nations of the world but it is still a new and upcoming idea in less developed and especially third world nations, Nigeria too. But the business of real estate especially residential estate has taken a huge space in the Nigerian economy. Among other things, the mortgage sector is affected by lack of trust between parties engaged in such an agreement making it subject to default, the poor economic background of most applicants has also made them less liable to get mortgages thereby leaving it for the rich.
The Nigerian real estate sector is growing fast and is now the sixth largest sector in the economy. The National Housing Fund (NHF), is an initiative of the Federal Government of Nigeria managed by the Federal Mortgage Bank of Nigeria (FMBN), which offers loans for the purpose of building, purchasing or renovating a house. The applicant for this loan, must however be a contributor to the NHF for a minimum of six months. An applicant can only receive a loan up to N15 billion (US$48 million), which may not equate to more than 90 percent of the cost or value of the property. A borrower must contribute 10-30% equity for a loan ranging between ₦5 billion and ₦15 billion. The real benefit of a NHF loan is its low interest rate – promised to not exceed six percent, with a maximum repayment period of 30 years. However, its capacity to serve its contributors effectively is limited. The Affordable Housing Scheme, for example, can only provide about three percent of the required housing stock, therefore insufficient and as such giving space for profit conscious investors to amass excess capital regardless of the need for house for all.
As pointed out by Leilani Farha (2017), “Global real estate represents nearly 60 per cent of the value of all global assets or $USD 217 trillion – with residential real estate comprising $USD 163 trillion or 75 per cent. This represents more than twice the world’s total GDP”. It is quite unfortunate that though residential real estate occupies 75% of the total value of global real estate yet, the low and middle income earners cannot afford such houses and hence, they are either forcefully evicted or opt to live on the street or in a cage kind of house without space.
The government of most nations are not doing enough to protect the interest of the poor (rural and urban poor). It all seem like those rich investors have aligned and compromised with legislators to pay less attention in terms of regulation of real estates. This among other things discriminates against the poor, reduces the quality/standard of living and also widen the gap between the rich and the poor.
To correct these errors and shortage of housing available for the lower income bracket of the population, the national government should intervene in the pricing and cost of housing in both the national and subnational levels. To do these, the government should establish more housing schemes, build cheap yet quality housing for its citizens and also advise rich investors in real to set out plans to provide affordable and quality houses to the lower income masses. There should also be public-private partnership programme on housing. The government in both the national and subnational levels can collaborate with private investors in real estate to provide affordable and quality houses for citizenry. Policy makers in underdeveloped and developing countries should encourage diversification polices that will increase the export base of the country so as to stabilize and appreciate the value of local currencies thereby making the importation of building material cheaper as well as increase the income per capita of the masses.
If effectively implemented, these strategies will not just give everyone asses to quality housing but will also bid the housing prices down while also closing the inequality gap.