Moribund laws, stunted capital market worsen Nigeria’s 17m housing deficit

Moribund laws and a stunted capital market have been identified as major barriers militating against accessibility to affordable housing in Nigeria, thereby worsening the nation’s bad condition of a 17 million housing deficit.

This is because such housing laws and their implementation in affordable housing development become ineffective, making it necessary to consider their possible amendment or outright repeal for alternative laws.

“Housing laws in Nigeria have become moribund and can no longer stand the test of time, thus call for proper amendment. The Land Use Act of 1978 should be repealed, it has outlived its usefulness and has been a major constraining factor in housing development in Nigeria and its repeal is therefore long overdue,” Osita Izunaso, a former senator, who was speaking at the recently held Abuja international housing show, says.

The other laws in question, he says, include the National Housing Fund Act, the Federal Mortgage Bank of Nigeria Act, the Mortgage Institute Act, the Federal Housing Authority Act, the Investment and Security Act, the Insurance Act, the Nigerian Social Insurance Trust Fund Act as well as the Trustee Investment Act.

The National Housing Trust Law, for example, says that an average Nigerian worker both in the public and private sectors that is earning at least N30,000 per annum is mandated to contribute 2.5 percent of his or her basic salary to the Fund.

“However, even an average worker that earns as much as N30,000 contributing 2.5 percent of salary to the Fund will barely contribute N750 per month, and if that is multiplied by 12 months, which is one year and multiply it by 10 years, that will only amount to about N90,000, and that cannot build a house in Nigeria,” Izunaso says.

He also calls for the amendment of that particular aspect of the Act in order to push contributions from workers to at least 15 percent or more.

He notes that such legislative actions will create further access to funds and land, while stimulating growth in sustainable growth in the housing sector, as funds and access to land have always been seen as the two major problems militating against affordable housing in Nigeria.

The Nigerian Stock Exchange (NSE) has about 180 listed companies with a total market capitalisation put at N10.16 trillion.

According to the former senator, “new sources of funds must be developed in order to access money from the capital market through large-scale portfolios of mortgage security, as well as housing and mortgage insurance, which have been the engines of growth in housing financing mechanism in developed countries.”

This is because developed countries all over the world have addressed housing deficits through effective mortgage systems, government policies, enhanced technologies, private participation and, in the process, have created more jobs for their citizens.

Bukola Saraki, president of the Senate, also speaking at the 10th Abuja international housing show, says the Nigerian Senate is working on a number of bills in order to make it easier for Nigerians to have access to and acquire property.

Saraki notes that the United Nations, through articles 2 and 17 of its Universal Declaration of Human Rights, classifies the right to property and the right to own property as fundamental human rights to all people, and that the government considers it important to work towards the attainment of access to affordable housing for all Nigerians.