By Mimidoo Patrick
Current research finding has given credence to dominant thoughts amongst experts that the bane of Nigerian housing sector before now was a near absence of good corporate governance in the industry aside lack of transparency and endemic corruption writes Mimidoo Patrick.
The Nigerian housing sector after 60 years is an enclave of bitter tales and tragic hub where virtually every stakeholder has one negative story or harrowing experience to share when encountered.
Regrettably, as Nigeria marked its 60th independence on Thursday, the majority of Nigerians cannot afford functional houses. Many commentators expressed dissatisfaction, saying the country’s housing sector is far below what it should be.
From the picture of 80 percent of Nigerians crawling out of slums in the 21st century to the rising unemployment and general insecurity which result in mass atrocities and uprooting of people from their localities.
Housing development initiatives, apart from being only perfunctory, they end up serving only the high-end. Nigeria now has a medley of very exquisite houses and shacks in the midst of scarcity.
Yet government’s initiatives have not been really helpful. Housing was an appendix of the Federal Ministry of Works. After prolonged talk about housing deficit, it was made a stand-alone ministry. The Muhammadu Buhari government merged it with two other gigantic ministries, Power and Works in 2015. Last year, Buhari dropped Power from the amalgam, leaving Housing with Works.
Speaking on Nigeria at 60 and the housing sector, the director, University of Lagos Centre for Housing Studies, Prof. Olugbenga Timothy Nubi observed that @ 60 Nigeria is not making progress in the housing sector.
Nubi lamented that Nigeria is a country that have been making policies that have not yielded any tangible houses.
“Our success stories are when the majority of Nigerians could live in decent houses otherwise, we in the housing sector need to work harder to achieve housing for all.
He said on the housing finance side, the Federal Mortgage Bank of Nigeria (FMBN) was established in 1956. FMBN provides long-term credit facilities to mortgage institutions in Nigeria and promote the growth of viable primary and secondary mortgage institutions to service the need of housing delivery in Nigeria but that is not a reality today because not every Nigerian can access their services.
He said in some nations, mortgages can easily be accessed by all but that is not what is obtainable in Nigeria.
“Different policies have been promulgated by different governments. The Shehu Shagari-led administration did Low-cost Housing across the federation. Olusegun Obasanjo stepped up involvement of private hands in building of houses in what was tagged mass housing.
“Few years ago, a committee of experts reviewed the housing policy of urban planning and produced the draft of the National Land Policy after meticulous work. That document has yet to be published.
“All these has not achieved the much needed result because the basis for housing a large part of the population was faulty. For instance, cost of building materials remained high. And building materials were imported at high cost or transported across long distances.
Supporting the line of thought, an expert in the housing sector, also lamented that there is no proper planning and opening up of layouts.
He said efforts to construct houses are therefore, thwarted by lack of infrastructures like access to good roads, drainages, potable water and electricity. The expert identify that allotted land by government for mass housing are been sold by developers for quick return on investment.
According to him, “After mouthing off “Housing for all by the year 2000”, the sorry state of housing in Nigeria from precolonial time has continued to be, in the third millennium. Even with the Sustainable Development Goals (SDGs), there is no clear indication that decent housing for the mass of Nigerians is achievable.
“SDGs with target of 2030 took off at the terminal date of the Millennium Development Goals (MDGs) in 2000. Goal one, three, six and 11 of SDGs have a direct relationship with housing. Failure to achieve them means poor housing”.
In its electioneering in 2014, the current government promised to construct a million housing units a year as a way of closing the country’s yawning housing gap. After four years, not even 100,000 housing units can be counted.
Construction is cost involving. No magic can work in a society where a greater portion of the working population lives on a paltry $1,000 a year. Where payment of a minimum wage of less than $100 (N30,000) is contentious, home-ownership is a mirage.
Unless one saves N30,000-N40,000 per month, one cannot get a mortgage. Nowhere does it work where more than 30 percent of net income is spent on home.
Worst of it all, Nigeria is a country with a very complex mortgage system. Mortgage institutions lend at about 20 percent with countless hidden charges. Nigerians are therefore, not interested in mortgage.
Workers have always resorted to personal initiatives to acquire home. Many indulge in construction activities by themselves. They either resort to underhand ways to raise funds or take loans from cooperative societies and from friends/relations to build their houses. But not many can get these cooperative loans so many more continue to live in substandard houses – some to their retirement age. A number of them have been duped in their bid to buy land, leading them to needless litigation or very sorrowful life.
Poor and inadequate housing, no doubt it is terribly affecting the security, physical health and privacy of the Nigerian people.
The time is now to empower the middle class through home-ownership. Government should strengthen institutions for delivery of assist-funds and collaboration among relevant stakeholders. The process of getting the Foreclosure Law should be fastracked and it should be done in all the states.
There is also need to deepen partnership with the Real Estate Development Association of Nigeria (REDAN).
However, in view, Dr. Joshua Aloaye Egbagbe the Chairman of Value Chain Project Consultant Ltd, Off-takers Affordability National Strategy for COVID-19 Era Housing Delivery in Nigeria said the current Federal Mortgage Bank of Nigeria (FMBN) under the present leadership of Arc. Ahmed M. Dangiwa has reform to boost access to affordable housing financing to achieve success in the housing sector.
Egbagbe said, “FMBN has been innovating to ensure a proper match between its housing products and the financial capacity of an average Nigerian worker looking to own a home. In the past three years, under the dynamic leadership of Dangiwa, the bank developed and introduced two creative housing products.
“The first is the individual Home Construction Loan. The loan enables NHF contributors with unencumbered land, appropriate land titles and approved building plans to undertake self-construction. The loan provides up to N15million to contributors to the National Housing Fund (NHF) scheme at 7 percent interest rate. Beneficiaries can pay back over a period of up to 30-years depending on their age and number of years left in service.
The second product is the FMBN Rent-To-Own Housing Scheme. The scheme offers an easy and convenient payment arrangement towards homeownership for Nigerian workers. It makes it possible for a Nigerian worker to instantly move into an FMBN-owned housing property as a tenant and conveniently pay towards ownership of the property in monthly or annual instalments over as long as 30 years at an interest rate of 9%!
Another equally interesting and worker-centric affordable home ownership product that FMBN has also up scaled significantly within the past three years is the home renovation loan. The loan provides up to N1million to enable beneficiaries who already own their homes to carry out improvements. In the past three years alone, about 43,000 Nigerians have benefitted from this facility.
This has also revamped its legacy Cooperative Housing Development Loan (CHDL) in line with the initiative of the Minister of Housing, Babatunde Raji Fashola (SAN) to adopt cooperative societies as the channel for the aggregation and delivery of houses to members of cooperative societies.
The Minister launched the National Cooperative Housing Scheme starting with the North Central and North Eastern geopolitical zones in Abuja and Gombe state on 17th and 20th February 2020, respectively.
The FMBN Cooperative Housing Development Loan (CHDL) enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members. Key features include tenors of up to 24 months with a moratorium of 12months and interest rate of 10%. Up to N500million is accessible by qualified cooperative societies under the facility.
It has also strengthened partnership with workers who are the main contributors to the NHF scheme, the bank approved and is currently executing a National Affordable Workers’ Housing Scheme in partnership with the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers Consultative Association (NECA), to deliver affordable houses for Nigerian workers. The first phase of the scheme was launched in October 2018 aimed at delivering about 1,400 units.
FMBN has maintained a trajectory of high performance over the past three years under the Dangiwa-led management with key reforms that are gradually improving service delivery and creating historic impact.
He believes that the current Board and Management should, therefore, be encouraged, and its finances bolstered to enable it to create greater impact as the foremost government tool for social housing delivery and in no longer time from now the result will be visible for all to see.
It is on this premise that Viewpoint Housing Media wish to conclude that as Nigeria marked 60 years there is need a for the government on all levels and the stakeholders to work towards providing decent houses for citizens in the country.