The Federal Capital Territory (FCT) was conceived by the Federal Government of Nigeria in the 1970s to replace Lagos as the capital city due to the underlying urbanization challenges Lagos was experiencing.
Lagos faced limitations in landmass, a water-locked environment, and increasing vulnerability to external threats from the coastal plain. These factors led the National Security Council to move inward to avert potential threats to national sovereignty.
The Federal Capital Territory Administration (FCTA) administers the entire FCT, while the Federal Capital Development Authority (FCDA) specifically manages the construction and infrastructure development of the region.
The capital city, Abuja, is located within the wider Abuja Municipal Area Council. The territory is currently made up of six Area Councils: Abaji, Abuja, Bwari, Gwagwalada, Kuje, and Kwali. The FCTA was created on December 31, 2004.
The FCT has seven administrative structures called secretariats, each headed by a permanent secretary supervised by the Ministry of the Federal Capital Territory.
Over the past decade, Abuja has witnessed a consistent and gradual rise in population, with an average annual growth rate of approximately 5.3%. The current population of the city is estimated to be around 3.4 million. As a result of the rapid population growth, the housing demand has increased significantly. In reality, Abuja accounts for about 10% of the country’s overall housing deficit.
An alarming trend is the presence of many unoccupied properties in the city center, estimated at 600. This number is much higher compared to other areas in Abuja. While these vacant housing units could help alleviate the housing deficit, their rents remain prohibitively high.
Unfortunately, these homes are out of reach for a large portion of Abuja’s residents, particularly those with low to moderate incomes, due to the exorbitant rental costs associated with them. Additionally, Abuja has experienced a substantial influx of people from both within and outside the region, as individuals seek better economic opportunities. This has added to the housing challenges in the city.
A bill to address the burdensome rent payment system in the FCT has been approved by the Nigerian Senate. Senator Smart Adeyemi, who represented Kogi West in the Ninth Senate, sponsored the bill, titled the ‘Advanced Rent (Residential Apartments, Office Spaces, etc.) Regulation Bill 2022.’
In a press conference after the first reading of the bill, Senator Adeyemi spoke of the challenges many Abuja residents face when it comes to dealing with substantial rent obligations. The proposed bill aims to compel landlords in the FCT to adopt a more tenant-friendly monthly rent payment structure.
“Some landlords always insist their tenants pay for one year or two years’ rent. That is wrong. By this bill, Nigerians, especially Abuja residents, will now pay rent on a monthly basis after the expiration of the initial three months. The law we are proposing stipulates a maximum advance rent payment of three months. After the expiration of the three months’ rent, the tenants are expected to pay monthly. There are many tenants whose salaries are competing with their rents because they live in cities like Abuja.
“Many landlords did not secure loans to build their houses. They are products of free money they acquire from the system. Yet, they make life difficult for poor Nigerians who do not have such privilege of making ill-gotten money from the system and put up structures. The buildings are constructed in such a manner that an average Nigerian would not be able to afford them. Many people are indulging in corrupt practices to get their rents paid while the ladies take to prostitution,” he said.
There are calls from various stakeholders to implement government regulations aimed at reducing the high cost of renting in Abuja. The proposal suggests that the government could establish maximum rent limits that property owners are not allowed to surpass. However, it’s important to note that price ceilings, although well-intentioned, can potentially result in inefficiencies within the housing market. Experts argue that such restrictions can discourage new investments from profit-seeking individuals, ultimately leading to long-term shortages.
In essence, price ceilings can act as a deterrent for investors, creating market distortions due to the artificial reduction in housing supply. This imbalance, coupled with increasing demand, exacerbates the housing market’s disequilibrium and worsens the existing shortage.
