• Sunday, June 16, 2024
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BusinessDay

The challenges of affordable housing in Nigeria (I)

Lagosians adjust to Okada ban reality

An Instagram post by a famous IG handler features an interesting story on his timeline. The story is about a decent comparison between two homes: one in Texas and the other in Abuja.

The Texas home sits on a beautifully kept landmass with a flowery frontage and a simple but graciously designed walkway.

The inset of the house isn’t clear from the post, but the radiating lights from the house can leave the observer with an incredible sense of beauty and glamour in which the inner compartments of the building are composed. The building costs $1 million.

Right beside the Texas beauty in comparison is an Abuja housing unit, which looks no different from the popular “rich man” house we see in most Nollywood movies: a duplex with two high entrance pillars, tall-inched hinged windows, a terrace with a chandelier on the first floor and an exquisite asbestos roofing.

The entire compound is neatly tiled, but the inset of the building is not visible from the post. This building costs $2 million.

Against the poster’s headline comment reads, “Overpriced rubbish, see (the) difference.” Surely, the poster was referring to the Abuja housing unit.

Quite frankly, it will be okay to agree with the poster since the cost of affordable housing in Nigeria is no longer one that should be taken lightly.

There are reasons for this, no doubt, but the fact remains that Nigeria’s housing default poses a great challenge, especially when it comes to the cost of building or renting homes in the country.

If one was to choose, it would make perfect sense to invest in the Texas alternative with a more luxurious ambience than in the Abuja option with double the price, yet, lacks the reputation of a comparably exquisite design, ambience and luxury.

Why then, one may ask, will the difference in both buildings and the associated cost diverge so vastly and more so to the disadvantage of the (expected) Abuja owner?

Without any reservation, housing is one of the cardinal measures of the state of any economy. The ability of citizens or other individuals to access decent homes at affordable prices is a crucial pointer to how well that country or economy is doing, among other macroeconomic vitals.

Many developed countries of the world have transformed the housing sector to accommodate the increasing need for housing by residents, visitors, tourists, and of course, the needy individuals among the citizenry.

Low-cost building materials as against the more expensive alternatives and the use of converted containers and other more economical structures are now frequently utilised by builders in the quest to provide fast and low-priced housing for the less opportune among the citizens.

At the other end vulnerability divide, expanding services that cover hoteling, motel services, Airbnb and short let housing services are frequently revised to ensure that efficient pricing matches up with quality service delivery, especially for travellers, tourists and other users of the housing schemes.

Countries that run a buoyant housing sector in this wise are regarded as smart, forward-looking and well-meaning towards their citizens and guests alike.

Nigeria’s case is unique in this regard. The housing sector has been plagued by three major ills, which continue to tamper on the promises the sector holds towards contributing to the country’s overall growth process.

Suppose Nigeria must delist from a monocultural economic status-quo. In that case, it must embrace housing as a tool for driving economic development and inclusive, shared prosperity.

Read also: Tax credit, assets conversion seen narrowing Nigeria’s housing gap

With an attendant focus on the three key areas of concern, the country’s housing dilemma could become a thing of the past.

Goal 11 of the United Nations Sustainable Development Goals focuses on member countries’ ability to attain an inclusive-led housing target, including the making of safe, resilient and sustainable cities and human settlements that can accommodate all.

The world’s target by 2030 is to “ensure access for all adequate, safe and affordable housing and basic services and upgrade slums and support least developed countries through financial and technical assistance in the building of sustainable and resilient buildings, utilising local materials”.

However, for Nigeria, unfavourable macroeconomic trends, high population expansion, and high urbanisation rates have continued to dampen local and international efforts towards a more resilient housing sector.

Indeed, Nigeria’s challenged growth has been affected by such factors as massive sovereign ineptitude, which has widened the space for high and rising inflation, unemployment and underemployment, negative investor sentiment and capital scarcity, highly undiversified foreign exchange base, depleted sovereign reserves and so on.

These combined have hitherto challenged the real sector and have consequently stunted the nation’s growth. Badly hit by these is the housing sector as well.

Furthermore, widening infrastructural dearth of the nation’s housing deficit has been exposed, and existing infrastructure has remained inefficient and decayed.

At the same time, there also seems to be a passive private sector activity in that industry.

As a result, it has been uneasy for sufficient investments to channel into the housing space as access to housing finance and land is limited, and the cost of construction continues to soar.

Also, labour and building materials’ hiring cost remains elevated while transportation expenses remain unbearably high. Hence, the desire to achieve low-cost housing in the country remains weak in the face of these pathetic macroeconomic fundamentals.

However, the federal government of Nigeria has made an effort to reawaken the dying sector by launching a 5-year National Development Plan medium-term blueprint.

This plan is set to bring about a renaissance in the country’s housing sector by committing up to N3.53 trillion from 2021 to 2025, alongside an estimated N1.68 trillion on public investment in urban road development.

If invested aright, it is hoped that the country’s current status quo in the housing sector will receive a boost, as over 21 million direct and indirect jobs will be created and an estimated 35 million people will be lifted out of the poverty net by 2025.

If achieved, the housing funds will partly contribute to the federal government’s overall commitment to lifting 100 million people out of poverty by 2025.