When Nigerian housing sector professionals, experts and sundry stakeholders gathered in Abuja for the just concluded four-day International Housing Show, the focus and centre of discussion was on innovative and sustainable financing model that could lift Nigeria out of the abyss of housing deficit.
The housing show, which saw about 500 participants from different parts of the world, is an annual event, already in its 13th edition, organized by a housing sector promotion and advocacy firm, Fesadeb Communications Limited.
The show has become a veritable platform for provoking thoughts on solutions to the myriad of housing problems and challenges in Nigeria. Festus Adebayo, convener and CEO, Fesadeb Communications, said in his opening remarks that the show provided opportunity for stakeholders to proffer practical solutions to familiar problems.
“We are out to realize a housing sector that will not only shelter man, but also contribute to GDP, provide jobs and create economic opportunities for those on the demand and supply sides of the housing value chain,” he said.
Consistent with the theme of the event, ‘Driving Sustainable Housing Finance Models in the Midst of Global Uncertainty’, expert opinions, ideas, insights and possible solutions were offered on how public and private capital could walk into the sector to deliver decent and affordable housing.
Finance, it is said, is the bedrock of housing anywhere in the world. Besides the private equity and debt from lenders, co-operatives, public and private partnerships which have not fared well in Nigeria due to policy inconsistence and trust issues, other finance and funding models were highlighted.
Institutional funding and Diaspora remittances are also other major finance sources and models for delivering housing with reduced risk and cost. According to the experts, there is a direct correlation between the availability or otherwise of financing for housing and risk.
Diaspora remittances into Nigeria is quite huge and has increased significantly in the last couple of years. Robert Honsby, Co-founder and CEO, American Homebuilders of West Africa (AHWA), estimates Diaspora remittances into Nigeria at $24 billion. It is also estimated that only 10 percent of this figure is deployed into real estate.
Hornsby noted that risk in Sub-Saharan Africa was generally over-priced relative to market fundamentals, pointing out that those who understood that could earn outsized returns. According to him, public sector, bilateral and multilateral donors, NGOs, resident citizens and the Diaspora all wanted solutions to the housing sector.
“Private sector actors who can deliver quality and value, and build a trusted brand will find significant opportunities for decades to come. Diaspora investors hunger for a partner to trust with their money and they dream of a home in the land of their birth,” noted Hornsby who spoke on ‘Diaspora Housing and Financing: Opportunities and Challenges’.
Micro-finance is another model that the experts considered to be of potential help. Debra Erb, MD, Real Estate Project Finance at Overseas Private Investment Corporation (OPIC) raised hope in this connection when she disclosed that they were already seeing more attempts to adopt that model to the lowest income housing needs and incremental demand, particularly in live and work developments.
Significant hope was also raised on institutional funding. It is expected that over the next five years, about $180 million will be invested in the sector by Shelter Afrique. The continental housing finance institution will be disbursing this money through credits to financial institutions, mortgages, construction finance for public private partnership projects.
Andrew Chimphondah, the CEO, who disclosed this also revealed their intension to assist Nigeria to raise bonds as soon as the country’s macro-economic environment stabilized, adding that the institution was planning to partner with the federal housing authority (FHA) on affordable housing for low income earners under the Affordable Nationwide Housing Project (ANHP) scheme.
To create an enabling environment for all these to happen, the Senate has assured of legislative intervention in the housing sector, disclosing that the land use act and the national housing fund (NHF) were captured in the legislative agenda of the 9th Senate.
“The importance of housing cannot be over-emphasised,” noted Ahmed Lawan, the Senate President, adding, “our needs are enormous while resources are lean. But the good thing about the future is that it comes one day at a time. Today presents us with the opportunity to consolidate on what we have built and to start new projects where necessary.”
Continuing, Lawan said, “I am aware that there are critical areas that require legislative intervention like the Land Use Act, the National Housing Fund (NHF), housing regulations, and many more enabling policies. It is in the legislative agenda of the 9th Senate to see it that all policies required to get us closer to our dreams are achieved.”
Both the land use act and NHF are major impediments to housing development in Nigeria and it is hoped that the intervention by the Senate, if it sails through, will improve housing accessibility and affordability, and ultimately lead to the growth of the sector and the economy at large.
CHUKA UROKO
