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 .
THE EVOLUTION OF NATIONAL
HOUSING SECTOR AND CAPACITY BUILDING
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 .
MORTGAGE FINANCE AND SUSTAINABLE
HOUSING DELIVERY IN A GROWING ECONOMY.
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 [640sq.km.]
.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.
