What FG’s N88bn budget for housing means for homeownership, economy

President Bola Tinubu’s N47.9 trillion budget proposal for 2025 and the allocations to various sectors of the economy have been evoking positive and negative comments from concerned stakeholders, including private sector operators and politicians depending on which side of the divide they stand.

Among operators in the country’s real estate space, the N88 billion which the government allocated for housing is a slap on the wrist for a sector where the country has, according to them, disquieting statistics in terms of homeownership, deficit and investments.

For its estimated 200 million population, Nigeria has a homeownership rate put at 25 percent as against Indonesia’s 70 percent, South Africa’s 60 percent and Ghana’s 45-50 percent. Also worrying is the fact that the country has 28 million housing shortage, according to the World Bank.

According to these stakeholders, the low budget allocation is a testament to the fact that the government is not insensitive to the housing situation, but also has little or no attachment to its importance to both individuals and the economy.

They note that given the inflationary situation in the country and its cost-push effects on both building material prices and labour costs, there is so little N88 billion can do for the sector.

“This is why we had said it before and we are saying it again that government has no business in the business including housing development. Its remit, as far as we in the private sector are concerned, is to enable the environment by providing critical infrastructure and coming up with good policies,” MKO Balogun, CEO of Global PFI, said.

“We have a situation in our hands where government tends to be in competition with the private sector – in some cases trying to crowd them out, yet they don’t get it right because it is not their remit,” Balogun added, advising that government should focus on governance and leave the private sector to do the business.

Timothy Nubi, director, Centre for Housing and Sustainable Development, urges more investment in the housing sector, lamenting that, despite the poor state of the nation’s economy and the hardship faced daily by the majority, Nigeria has seen more bulldozers than cranes in recent years.

This, according to him, is a troubling trend that reflects an imbalance between demolition and new construction. He noted that, “between 2022 and 2024, approximately 10,000 buildings were demolished in Abuja alone, representing trillions of naira in lost value.”

Festus Adebayo, director, Housing Development Advocacy Network (HDAN), says the N88 billion budget for housing is “a clear indication that affordable housing for poor citizens is not on the priority list of the present government, stressing that the allocation is grossly inadequate to tackle the country’s housing deficit.

According to him, the implication is that more Nigerians will live without homes as fewer houses will be delivered, recalling that to bridge its housing deficit, the World Bank recommends about Nigeria has to invest N550 trillion while a minimum of 700,000 housing units have to be built annually for the next 20 years to make that happen.

Another implication, he said, is that such insufficient funding undermines the government’s Renewed Hope Agenda, which aims to deliver 20,000 housing units annually. He called for a substantial budgetary increase to ₦500 billion and above, citing the average cost of ₦6 million to N10milion per housing unit required to meet the presidential target.

“Unlike other sectors, budgetary provision for housing is retrievable when houses are sold. The money comes back to the government after creating jobs and boosting economic development. At least 70 percent of the expenditure can be recovered, even if the houses are subsidized,” Adebayo noted further.

He contrasted the housing sector’s potential for economic returns with other ministries such as Works, Education, and Transportation, where allocations are typically sunk costs with no direct financial recovery.

“Government needs to match its talk on housing with action. The Renewed Hope for Housing will not be realized if the Ministry of Housing continues to be starved of funds,” he warned, adding that the reduced budget down from ₦99 billion last year to ₦88 billion this year, does not reflect a serious approach to tackling Nigeria’s housing crisis.

He faulted the lack of provision for key initiatives like the Family Homes Fund Limited, and Federal Housing Authority, calling for a more conducive environment for them to thrive as he commended the establishment of the MOFI Real Estate Investment Fund to be launched in 2025.

“HDAN will be at the forefront to ensure that MOFI’s mandate is achieved and that Nigerians benefit from these initiatives,” he assured.

Adebayo described the housing ministry’s allocation as disproportionate when compared to other ministries, citing ministry of Works which received over ₦926 billion, the Ministry of Water Resources and Sanitation ₦114 billion, and the Ministry of Power ₦531 billion.

He wondered why sectors with significant economic and social benefits continue to be underfunded, stressing that, “this disparity underscores a lack of priority for housing, which is a critical need for Nigerians.”