August 28, 2014


Housing undoubtedly constitutes one of the basic requirements of affordable standard of living .In developed societies and emerging market , it is given top priority in the national policy schemes .Infact ,Abraham Maslow ’s hierarchy of need epitomizes the relevance of human need to universal well being and the kernel of these competing choices and strategic options depicts the significance of human need .It comprises of five levels  mainly –physiological , security , social , esteem and self-actualization .It is certain as earthbound creatures every man is looking for a place called home and a place to sleep Or how to maintain and secure their existing shelter . People with befitting shelter are certain of personal comfort ,satisfied life , and sometimes can boost high life expectancy .This speaks volume of the significance and essence of moral safety and security which cannot be protected by all humanity be it poor or rich unless social safety net is created that values and link the importance of mass housing to social safety and stability .Therefore security is a basic form of necessity that is common to all citizens and vital to promote social esteem , physiological well being and can influence self-actualization .It is a common provision worldwide and Nigeria should not be an exception.
However , we shall look briefly at the Nigerian housing industry and the challenges facing the sector proffering the solution for the dawn of a new era .First , we review its history in a jiffy and the institutions behind the development ., then its funding pattern , the legal instruments and the institutional bottleneck gripping the industry . They can be narrowed down to capacity building problems .
More than 64 Years ago, the Nigerian  building was established as the pioneer housing agency in Nigeria .By 1977 , it was rechristened as the federal mortgage bank of Nigeria 
[FMBN] .It operated alongside a few state owned institutions  like Lagos Building investment Investment corporation [LBIC ] among others .The promulgation of  decree 1989  No.53  however took the Nigerian mortgage sector into a new level and founded two tiered structure and introduce free market private sector participation into the housing finance industry . The emergence of national housing funds Decree No.3 of 1992  consolidated the previous gains three years after .
The national housing fund has been managed by FMBN since inception and the main objectives of the funds is to provide Nigerians with affordable houses through access to mortgage funds ;ensure adequate  loans supply for Nigerians to build , to acquire and to improve residential houses ; and to offer assistance in the development of low cost housing for low income workers .The responsibility of  making deductions of 2.5 percent contribution of eligible worker’s salary to national hosing fund lies with the employer which must be remitted to federal mortgage bank within the month  of deduction with an interest rate of 4 percent applicable to the deduction made .This included also the self employed Nigerians under the similar terms and condition . Active contributors for more than 6 months are eligible to mortgage loans through any of primary mortgage institutions [PMIs ] which means FMBN  doesn’t give loans directly to individuals .It provides long term loans to PMIs to supplement or for on lending to the individual contributions to the fund .
The level of contribution determined the size of loan to be accessed at the point of loan requirement subject to limit of  5 million naira .Anything greater than this limit will be charged to commercial rate of PMIs leading to two separate loan account set up mainly the NHF rate and commercial rate loan .The PMIs are allowed to charge up to 4 percent beyond the FMBN original 4percent .The mortgage institutions currently charge 6 percent for the loan duration. The maximum loan term does exceed 30 year period and can be fully repaid once the applicant reach 65th birthday or will be entitled to a  refund upon  60th birthday if the contributions were not expended or  exhausted on  housing finance  .The initiative or the public scheme  has a good intention to encourage affordable access to home ownership –a far better options than one could get from commercial banks where the blue chip individuals can muster the  advantage of a bigger loan that can be enjoyed only by real estate investors .The fund therefore was mandated to lend at a subsidized rate to the PMIs so that they can now lend on a long term basis to end-users. Be that as it may ,the imperative of housing  in a fast growing economy like Nigeria must be so streamlined with breath taking reforms and  effective strategy for mortgage institutions to deliver on their national objectives .
The Nigerian housing industry has come along way .The  growing demand for housing  in the country shows the need for sustainability in  effective housing delivery and the ability to meet the need for affordable funding options constitutes one of the basic requirements of economic welfare in modern economy.
Within a free market economic purview , housing finance and the allocation of funds is extremely complex due to competing needs . This demand or  its proportion is determined by the  nature and availability of existing funds and the proportion that can be mobilized and channeled to effective housing finance . In 2004 ,  the housing demand in the country in relation to supply and supply gap respectively for housing finance was estimated at 400 billion naira .pr annum .Given the level and magnitude of the inadequacy   , access to mortgage finance indeed is one of the greatest problems militating against the sector . As usually stated , about 16 million housing deficits needed funding estimated at 42 trillion .naira .Though statistics varies ,contrary to world bank ,the federal mortgage bank of Nigeria [FMBN] estimated housing deficit stood at 14 million units requiring 35 trillion naira [$ 270B.] more than the size of  funds shared by all tiers of government in terms of federal appropriation and statutory allocations [2004-05] within a band of five years .It is quite worrisome .
The world bank statistical estimates indicates that Nigeria  requires housing production of 720,000 units to meet MDGs target annually over the next 2 decades to break even in the country . According to available statistics , the federal housing authority [FHA] built only 30 ,000 houses between 1973 and 2006 .From independence  till date total units has not exceeded 50,000 units .The federal housing authority set up in 1973 had developed large residential estates  in Lagos mainly Festac and Ipaja new town of which the former is the largest project with some 15 ,000 units while Ipaja covers 180  hectares in area size with 3044 housing units . Ancillary government housing agencies also  cater specifically for the civil service accommodation need .They extended housing to workers of government parastatals .This included  staff  of CBN ,the army , the navy , the air force , and the police .They built large barracks spreading from Bonny camp , Ikeja  air force base and army cantonment and Ojo military barracks among others  . The number of units were not precisely known .Meeting  annual housing target is a great challenge even to states .For instance the population of Lagos is currently more than 15 million people up from 267 ,000 in 1952 growing faster than national average and haunted by immigration pressure . This increased housing demand .In order to meet up with this demand , 100,000 housing units are required annually and nothing near this target is being built .In 2008 , the Lagos state development and property corporation [LSPDC] planned to provide only 504 in ten estates speaks volume of this lip service towards housing provision .
For a long time until 1991 Lagos was a federal capital benefited from federal housing allocation in addition to the provision of housing by Lagos state ,its companies ,and partnership with organised private sector and informal sector have contributed immensely to the provision of housing in the state .The Lagos executive development board [LEDB] which became LSPDC in 1972 is the agency in care of housing provision in the state taking the responsibility of providing a massive low cost housing for low income earners .The LEDB African housing policy scheme  was responsible for creation of housing estate in Yaba  and the new town in Surulere founded in both 1950s to early 60s now a prominent part of Lagos Though is better than none under it since 1972 ,  it had generated almost 10 ,000 housing units .The Jakande government that came in 1979 took the industry to a new height with the recognition of the need for mass provision of low cost housing all over the state . Even before federal government realized the important partnering with private sector , the then government was the first to make the move infused with the belief this partnership can be instrumental to mass housing provision in Nigeria .
With this unprecedented housing ideology , about 17,000 housing units were  provided by 1992 .For instance in Abesan [4,272],Amuwo Odofin 2,968], Ijaye [818] , Iba [ 1,674 ] , Ijeh [ 500] , Isolo [ 3 , 632 ] ,Ojokoro [528 ] .Also meddle income flats such as — Ijaye [492] , Omole [ 100] , Alapere [60] and another for upper middle class income flats , duplexes and luxury flats Dolphin estate [ 1057] units , Herbert Macaulay [578] .The establishment of New own development authority came to pass in 1980 .This provided framework ensuring provision of site and organized service schemes  vital  to provide housing for middle income earners . The federal housing authority also provided some low cost housing units at Abesan and Iyana Ipaja in Lagos here This giant stride also included Lekki housing scheme 1 and 2 , Amuwo Odofin and Isheri north .
Moreover ,we must not fail to remember the efforts of the private and informal sector .
Although local government have not being empowered to participate effectively in the housing policy scheme ,the informal sector and the private sector have contributed immensely .The organized private sector in partnership with local land owners did very well . LSPDC in  collaboration with HFP built dolphin estate , Ice flats and Victoria Garden city [VGC] on corporate account .The effort of other companies and property developers such as UACN Property , Intercontinental Properties and Grant properties among others including smaller operators cannot forgotten ,targeting the upper medium income class though relatively small .The informal sector of course is the largest provider of housing in the country , providing social amenities alongside housing construction after undertaken the risk of untitled land purchase from so called omo  oniles.They built the almost all the entire houses in Lagos like every other state in the country .The list is tiring : Shomolu , Anthony Village , Mushin , Agege , Oko Oba ,Masa masa , Ire Ikari estate, Ajegunle and majority of Ikotun , Ijegun Igando ,among others. The combined effort of government agencies over these decades have produced still less than 100 ,000 units .By using Lagos as a case study , we can not get a better picture than elsewhere across the federation –an indication of poor housing policy and ineffective market strategy in Nigeria .
Whereas in contrast to Nigeria , the housing development board [HDB] of Singapore –  that has similar origin to LSDP in Lagos has been able to house almost all citizens in  Singapore -a country roughly the size of Victoria Island [] .In 1960s ,was our peer but today has been able to house 85 percent of its people in owner-based occupied flats as opposed to 73-75 percent of Lagosians living in rooming houses even though LEDB was founded 40 years before housing development board [ HDB] in Singapore In 1960 , 9 percent of Singaporeans lived owner occupied flats compared  84 percent in 2009 .The improvement trust of Singapore was rechristened like LSPDC as HDB WITHIN THREE YEARS provided 21 ,000 units/flats , by 1965 provided 54 ,000 flats ,reaching a whooping 800,000 units in year 2000 in which  housing for every one, water for all ,  food for every one among other slogans were undertaken  in Nigeria …It is all about strategy they got it right in Singapore .
There is indeed a wide gap between demand and supply deficits  in The Country. If virtually all successive governments since independence  that have highlighted the imperative of this social need are truly serious we wouldn’t have had this hydra headed problems . The gross underperformance over the years is a reflection of the level of this lip service by leadership and poor institutional framework   put in place to achieve the magnitude .Creating an enabling environment for mortgage finance in a growing population and growing economy is a fundamental challenge that must be surmounted to meet the MDGs housing target .We have contended briefly there is no access to  long term fund in Nigerian economy which is the reason why the funding mechanism and structural inadequacy has refused to heal .
We shall also examine in a cameo , other critical factors militating against mass  housing provision in the country such as barrier posed by Land use act decree [1978] ,the issue of capacity building from  skilled labor to institutional framework and policy inconsistency cannot be forgotten in the policy sustainability and economic strategic impact . We have observed the absence of long term funding due to the short term nature of banking facilities of roughly 90 days and at least a year .It necessary to also contend the viability and reliability of proven statistics in the industry for predictable planning and highly accelerated development.The industry practitioners are beginning to question or critque the the notion of 16 or 17 million housing deficits in the country .There are sundry issues that must be looked  into if the dream of housing for all is to be achieved.