The Housing Challenge in Nigeria


By Lakinbofa Goodluck

The famous Abraham Manslow’s Hierarchy of Needs places shelter as a basic need of every human. In other words without shelter man is less bothered about social activities, self-esteem or any other offerings of the society. If a man wanders all day, at some point in the dark hours nature would make a request for him to rest his body, except the man belongs in the association of chronic insomniac. Sadly, what should have been a basic provision has become a luxury in Nigeria. According to the 2011 housing survey there is a 17million housing deficit in Nigeria. Generally, housing has been a major challenge in Nigeria for decades and there seems to be a preponderance of ineffective or motionless housing policies that has led to the inability of government to address the housing challenge.

In 1991 the government of Ibrahim Babangida promulgated the National Housing Policy, which was aimed at making housing affordable for Nigerians. As a result of the ineffectiveness of the policy in completely addressing the issues, a committee was set up in 2001 to provide a new housing policy. The report of the committee culminated in the New National Housing Policy of 2006. Yet, that policy despite the breadth of its input did not solve Nigeria’s housing challenges. In 2012 the then Minister of Housing, Dr. Ama Pepple presented a new draft policy on housing to the Federal Executive Council. The policy sought to initiate a new paradigm to the existing housing policy. The new policy proposed the collaboration between federal government and the private sector in the provision of one million houses annually in order to address the housing deficit of the country. In other words, the new policy sought to promote Public-Private-Partnership in housing for all Nigerians. Although, the new direction encouraged the participation of the private sector in the housing sector, not much was implemented before the expiration of the Jonathan’s administration.

The current administration under the leadership of Babatunde Fashola as the Minister of Works, Power and Housing, has also introduced new policy measures to address the housing challenges in the country. The foregoing shows that Nigeria has never been starved of policies in the housing sector, yet we are confronted with a high housing deficit. To provide a comparative perspective to the challenges facing Nigeria it may be instructive to examine the situation in other climes. For instance, China with a population of 1.3billion people has a housing surplus yet Nigeria with a population of about 200million has a housing deficit. Governments in many countries take the responsibility for the provision of housing through a mortgage financing system that simplifies home ownership for employed citizens, and a social security system for the unemployed.

However, housing in Nigeria has been characterised by weak land administration system, lack of access to funds and absence of a well implemented and holistic policy. In most states of the country owning a land is a cumbersome process that discourages many. In Lagos, which is the commercial nerve centre of the nation and arguably the most populated State in the country, the menace of “Omo Onile” has become a headache for prospective home owners. Although the challenge created by these land grabbers has also led to the increase in the patronage of real estate firms as those who could afford the realtors prefer to avoid the land grabbers by buying ready homes.

Available data shows that there are currently about 35 Primary Mortgage Banks (PMBs), and 19 registered banks offering mortgage to customers at an interest rate of between 11 and 27 percent. Many of the commercial banks demand a down payment of 25 percent of the value of the mortgage with a repayment plan of between 10-20 years. When this is compared with China where interest rates are below 5% it is understandable why Nigeria has a housing deficit while China has a housing surplus. As a result of the high interest rate many Nigerians are compelled to own homes through personal savings or loans provided by employers. This scenario means that individuals that lack good employment cannot save for a house nor access loans to acquire a house. The weak social security system in the country also means there is currently no plan to provide homes for the poor in the society. Interestingly, housing units built for the poor in Nigeria cost between N5million and N20million. How many poor people can truly afford N500, 000 talk more of N5million to own a house in Nigeria?

The Nigerian Mortgage Refinance Company (NMRC) established in 2013 was conceived to raise funds for housing in the country. The NMRC has been able to disburse funds to some mortgage institutions to finance the construction of housing units. However, the process of distribution and ownership of the relatively cheap housing units is still entrenched in some form of corruption. Apart from the high cost of owning the supposed low-cost homes, the distribution process does not completely ensure equity and fairness. In a country like Nigeria, whilst a powerful and well connected individual can obtain allocation of five units, the poor man on the street may not even be aware of the process needless to mention owning a unit.

According to the World Bank’s Doing Business 2016 Report, Nigeria ranks very low globally, positioned at number 169th out of 189 countries for registering property. This report is reflective of the process it takes to obtain a land title in Nigeria. In actual fact, many of the houses in Lagos and neighbouring states do not have titles not necessarily because the owners of the houses are not willing to obtain titles but because the process can be cumbersome and frustrating. In addition to the difficulty in land acquisition, building materials in the country are also expensive. Again, the high cost of building materials produced in the country such as cement is also representative of the prevailing business environment. For instance the cement manufacturing companies are also faced with issue of gas shortage to power their independent power plants; they are still faced with bad roads and a non-functional rail system, which increases the average transportation cost on every item produced. This is a pointer to the fact that the infrastructural deficit in the country affects virtually all sectors of the economy. Until there is a deliberate effort by the government to intervene in this regard, affordable homes may never be a reality for many Nigerians.

There is urgent need to review the Land Use Act to make it relevant in addressing the contemporary housing issues in Nigeria. The Senate President did indicate at the beginning of the 8th Assembly that the repeal of the Land Use Act will be prioritised in the current assembly. Sadly, the just concluded constitutional amendment fell below expectation for many in that regard. The Act needs to be repealed to alter the statutory ownership of land in the country. The current structure does not promote innovation and debilitates the growth of the housing sector in the country.

Beyond the promotion of collaboration between public and private sectors, the government also needs to ensure adherence to quality in the houses that are constructed. The 2012 housing policy that culminated in the introduction of measures aimed at promoting private sector participation has led to the upsurge in real estate firms across the country. The Lekki axis of Lagos is a testament to this increase. New estates are springing up on a daily basis. However, the weakness in our housing policy is also evident in the ill-regulated nature of some of the buildings that are daily sold to unsuspecting buyers. Many of the housing units are replete of plumbing and electrical defects. There have been cases of building collapse primarily owing to substandard materials that are being used in the construction of homes. For those buildings that make it to the finishing process with attractive exterior, not many will be aware of the possible defects of such houses. If the housing policy does not take into consideration the quality of the houses built, we may be preparing ourselves for unprecedented rate of building collapse in the years to come.

Finally, the country cannot leave housing in the hands of the private sector. Many sectors of the economy can be private sector driven but home ownership cannot be left completely in the hands of the private sector. This is because there is hardly any economy that can be completely free of the poor. Private investors cannot provide homes for the poor in the society; this is the government’s responsibility. In the same vein, Nigeria’s population has been projected to exceed 300million by 2050 making it the 3rd largest in the world, the question we should be asking is “what housing plans do we have as a nation for this huge population?” If the government fails in this regard, then we should expect to see increase in the rate of homeless people in Nigeria and especially urban cities such as Lagos.


Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to as the source.