How to close Nigeria’s 28m housing gap

Nigeria’s homeownership has long faced challenges, with mortgage loans contributing a mere 0.5 percent to the country’s Gross Domestic Product (GDP).

The housing gap is estimated at 28 million, with 47 million people defecating in open places.

However, the soon-to-be-launched MOFI Real Estate Investment Fund (MRIF) aims to transform housing finance and reduce the yawning gap.

At BusinessDay’s PRINVEST 2025 property investment conference, Lanre Olutimilehin, a strategy advisor at Diya Fatimilehin & Co, highlighted the growing housing deficit in Nigeria, which now stands at 28 million units.

He attributed this challenge to the country’s underdeveloped mortgage sector and rising construction costs, both of which make homeownership unaffordable for many Nigerians.

“Despite various government and private sector interventions, the mortgage sector remains underutilised, contributing a mere 0.5 percent to Nigeria’s Gross Domestic Product (GDP). Stringent loan requirements, high interest rates, and limited financial instruments continue to hinder access to housing finance,” Olutimilehin said.

MREIF, however, aims to change this narrative by offering long-term, low-cost mortgage financing at scale. It also seeks to support private developers in obtaining construction finance through off-take guarantees.

The MREIF is a N1 trillion government-supported but private sector-led fund, focusing on homebuyers and developers, aiming to create a more accessible and sustainable homeownership system.

Read also: Growing housing gap requires N5.5trn/yr to close

Unlike its fully MOFI-funded Series 1, Series 2 will actively involve private sector participants, including fund managers, advisers, and issuing houses.

The fund aims to raise N100 billion from institutional investors via capital market channels, strengthening public-private partnerships to improve housing finance.

Speaking at the panel session, Emeka Eleh, principal partner at Ubosi Eleh & Co, outlined three core strategies for making home financing more viable in Nigeria.

Firstly, he emphasised the need to reduce interest rates to make mortgages more affordable. However, with inflation concerns and restrictive fiscal policies, achieving lower rates remains complex.

Secondly, Eleh called for greater liberalisation of development across sectors to curb the rising costs of housing. He argued that regulatory reforms and incentives could help drive down expenses for developers and homebuyers alike.

“Lastly is to bring down the cost of housing so everyone can afford it. This has to do with opening the economy to be very accessible to everyone by implementing good road infrastructure,” Eleh said.