• Monday, February 26, 2024
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Addressing Nigeria’s 21st century housing needs

FG unveils key changes to National Housing Programme

Amidst the myriad of problems facing Nigeria, housing stands out. According to the Central Bank of Nigeria in 2019, only 10 percent of Nigerians who desire to own a home can afford it, compared to 72 percent in the United States and 78 percent in the United Kingdom. This estimate is inadequate for the size of our economy, indicating that only two hundred thousand people can afford a house out of a population of over two hundred million and still rising.

This issue is exacerbated because, even with this revelation, governments have not deemed it expedient to declare an emergency in the housing sector of the country’s economy. The post-civil war housing challenges persist, with no concerted efforts made to address the debilitating homelessness experienced by many Nigerians at the Federal, State, and Local government levels.

However, it is pertinent to state that the Federal government and state governments have, from time to time, embarked on the provision of low-cost housing. Still, it is obviously never sufficient, as what they do is merely the tip of the iceberg.

Speaking statistically, with a population of over 200 million, Nigeria is the largest black country in the world. According to Rice University Research, Nigerians rank as the highest-educated immigrant population in the United States. The country has a huge youth population, unemployed, unemployable, illiterate, and uninformed, especially in the North, which has become a catchment area and recruitment ground for terrorism and banditry laced with religious extremism.

Consequently, the housing problem in Nigeria is undoubtedly a pandemic of immense proportions. According to the International Human Rights Commission (IHRC), more than 28 million Nigerians lack access to decent and affordable housing. The Federal Mortgage Bank of Nigeria (FMBN) estimates that Nigeria will require about 28 million housing units to address the housing deficit in the country.

Housing deficit in Nigeria

Attempts in the past, largely by the federal government and in some instances state governments, to address the housing deficit in Nigeria can be compared to a proverbial drop in an ocean. Instead of reducing, the housing gap keeps increasing, evidenced by astronomical rents, especially in urban areas.

Unfortunately, even the issue of high rent is not being addressed by the government, apparently, because it lacks the moral rectitude to do so. The provision of affordable housing has been an insurmountable problem for the government itself, and its failure to provide enabling environments for public sector participation in the housing sector exacerbates the situation.

Nigeria’s post-civil war housing deficit and the unavailability of affordable housing have increased tremendously. Recent data shows that in 1991, this grew from 7 million housing units to 12 million in 2007, and progressively shot up from 14 million in 2010 to a whopping 28 million housing units in 2022. The reasons include rural-urban migration, population explosion, multi-dimensional poverty, galloping inflation, lack of a mortgage system, unemployment, high construction costs due to inflation, and lack of political will by the government, among others. The question from stakeholders, especially professionals in the construction industry, is, “How will access to decent housing be made available to the average Nigerian household?”

Read also: UPDC plans job creation as means to tackle Nigeria’s housing crisis

Affordable housing in Nigeria

Despite the debilitating housing deficit in Nigeria, this tide can be turned around given the country’s immense natural and human resources. Given the huge resources required to meet the Federal Mortgage Bank of Nigeria (FMBN) estimate of N21 trillion to address housing needs, the government need not do it alone. Experts have suggested a Public-Private Partnership (PPP) Initiative where the government provides the enabling environment like land, tax holidays, and other basic infrastructures, while the private sector brings in funding, including foreign direct investments (FDIs).

Housing needs can be addressed in Nigeria using the following Public-Private Partnership (PPP) initiatives:

Build – Operate – Transfer (BOT)

A BOT model is generally used to develop a discrete asset rather than a whole network, for example, a toll road.

Build – Own – Operate (BOO)

This is a similar structure to BOOT (below), but the facility is not transferred to the public sector partner.

Build – Own – Operate – Transfer (BOOT)

The private sector builds and owns the facility for the duration of the contract, with the primary goal of recouping construction costs (and more) during the operational phase.

Design – Build

The contract is awarded to a private partner to both design and build a facility or a piece of infrastructure that delivers the performance specification in the PPP contract.

Design – Build – Finance

The private sector constructs an asset and finances the capital cost during the construction period only.

Design – Build – Finance – Operate (DBFO)

Similar to BOOT, DBFO is more used in the UK for PFI (Private Finance Initiative) projects.

Design – Build – Finance – Maintain (DBFM)

Design – Build – Finance – Maintain – Operate (DBMFO)

Similar to BOOT, DBFO (and its variations) is more used in the UK for PFI projects. The private sector designs, builds, finances, operates an asset, then leases it back to the government.

Design – Construct – Maintain – Finance (DCMF)

This is very similar to DBFM. The private entity creates the facility based on specifications from the government body and leases it back to them.

O & M (Operation & Maintenance)

In an O&M contract, a private operator operates and maintains the asset for the public partner. The payment for this contract is either via a fixed fee or a performance-based fee.

Read also: Housing deficit: Scarcity in the midst of plenty in Abuja

Innovation and construction style to reduce the cost of building in Nigeria

In the 1980s, a commendable effort was made by the late Alhaji Lateef Jakande in Lagos to address housing needs using the Low-Cost Housing Model. This worked for that time, using multiple floors and a good space economy. Even though many criticized it, that housing project was a novel approach that made many middle-class Nigerians become instant house owners.

Subsequent governments, however, have not matched the passion with which these low-cost houses were built. Attempts should now be made for cheaper low-cost housing to address the housing needs in Nigeria. Dry building construction with materials such as cement fibre boards, galvanized profiles, wood, particle boards, and other cheaper sources of building materials should be experimented with, moving away from the traditional cement and sand materials.

Nigeria has all it takes to meet its housing needs given its enormous resources; however, there has to be the will to pull it out of the housing doldrums it is presently in.

Abegunde PMP, Mniqs, Fnimn is the CEO, Rusteve International Limited, a building construction and real estate company