Apart from Shehu Shagari who was a ‘low-cost housing champion’, President Muhammadu Buhari, more than others before him, promoted social housing in the country and actually left some footprints on this in a few parts of the country, especially the North.
This effort did not, however, leave any dent or change the country’s sorry story on housing deficit and homelessness among many citizens of the country. A lot of Nigerians still do not have their own houses despite this effort and the president’s promise in 2015 to deliver one million housing units yearly.
This means that Buhari’s best in eight years was neither good nor impactful enough to change the Nigerian housing story. According to the United Nations 2022 estimates, Nigeria has a population of 223 million spread over a land area of approximately 923,000 square kilometres. Less than 10 percent of this land mass has formal title.
The country’s housing stock is estimated at 10.71 million units with the housing deficit said to be between 22 million and 28 million units. About 700,000 housing units are required to be produced yearly to address the deficit, whereas the annual production of houses nationwide is less than 10,000 units.
Mortgage facilities in the country range from minimal to non-existent, meaning that most property purchases are cash-based or through other private funding means. Home ownership in the country is put at 23 out of every 1,000 Nigerians, compared to South Africa, where it is 69 percent and Kenya, where the rate is 75 percent.
The government was able to provide an estimated 8,938 housing units across 35 states and the Federal Capital Territory (FCT).
Babatunde Fashola, minister of works and housing, who disclosed this recently in Abuja while presenting the scorecard of his stewardship, added that the administration also built 9,290km of roads nationwide.
The Family Homes Funds Limited
When the Family Homes Funds (FHF) was launched in 2017 as a social housing intervention programme, its mandate was to raise and invest, within five years, N1.3 trillion ($3 billion) in the development of 500,000 homes for people on low income. In the process, the company was expected to create up to 1,500,000 jobs and enable homeownership through its creative products.
But to date, almost six years after, the FHF has financed the development of about 11,700 homes for low-Income earners across several states in Nigeria including Delta, Ogun, Kano, Nasarawa, Kaduna, Yobe, Bauchi, Borno, Adamawa, and has created up to 64,000 direct and indirect jobs in the process.
The Funds raised expectations on the affordable segment of the housing market when, in July 2021, it successfully completed the issue of N10 billion under the N30 billion Sukuk Issuance Programme, targeting affordable housing development.
The 7-Year 13 percent Series 1 Ijara Lease Sukuk due 2028, was the first ever certified corporate Sukuk issued in Nigeria and it was expected to provide the necessary support for FHF’s goal of providing affordable homes across Nigeria.
Femi Adewole, its former CEO, noted that the Sukuk Issuance would contribute to the FHF’s objective of developing up to 200,000 homes by December 2022, adding: “The landmark event is a major impetus to the Funds’ vision to transform the housing market by making safe and decent housing accessible to Nigerians, especially those on low income.”
Zainab Ahmed, minister of finance, hoped that the Sukuk Issuance would strengthen FHF’s dedication to its core principles and expand its ability to offer wider opportunities for millions of Nigerians who relied on them to realise their home ownership dreams.
“The Series I Sukuk Issuance reinforces the company’s commitment to facilitating the provision of affordable homes and diversifying its funding sources, as well as the resilience of the domestic debt capital market. Family Homes will deploy the net proceeds to finance and develop affordable homes for low-income earners,” the minister said.
Though the Funds has impacted many lives, according to Association of Housing Corporation of Nigeria, especially in the northern part of the country where it has done social housing most, it could not deliver on its mandate of 500,000 in five years which, if done, could have provided homes for more Nigerians.
The National Housing Programme (NHP)
The NHP was another federal government’s intervention in the housing sector which was well intentioned but not implemented with the commitment it deserved. According to Bashir Alkali, the permanent secretary at the ministry of works and housing, the aim of the programme was to provide a scheme that was affordable, accessible and acceptable. He spoke at the launch of the programme in Abuja.
Of the 6,000 housing projects which the programme initiated in 45 sites, only 2,665 were completed in 35 states and the Federal Capital Territory.
The reality of housing needs among Nigerians dawned on the government when 5,000 housing units of the programme were put on the market and Nigerians were asked to subscribe to them. A portal through which subscriptions were made was unveiled on November 12, 2021 and, in just one week, the houses were oversubscribed up to 7,315 applications.
Perhaps, it could have been more but for two reasons. One was that the conditions were a bit stringent as subscribers were required to provide passport photographs, tax clearance and means of clear identification, N10 thousand application fee amongst others. Secondly, of the 1,2 and 3-bedroom bungalows on offer, the cheapest, which was 1-bedroom, was put at N7 million which made the houses not ‘affordable’ to most of the target audience.
The mortgage challenge
The mortgage system in the country has failed to grow to a point where any Nigerian with verifiable income flow can walk into a mortgage institution and access a loan facility.
The Buhari administration in eight years did little or nothing to address the challenges in the mortgage sector. The Federal Mortgage Bank, which supervises the NHF, the only entity offering mortgage at single digit interest rate, is also crying for recapitalisation.
The Nigerian Mortgage Refinance Company, a private sector-led secondary mortgage institution with the public purpose of dragging down interest rate on mortgage to single interest rate for affordable housing is receding into its cocoon, apparently unable to raise long term funds for mortgage refinancing.
For these reasons, a combination of factors has conspired to make it impossible for home seekers to get a mortgage to either buy or build their own house. An official of Living Trust Mortgage Bank Plc lists high-interest rate, low wages, and corruption as major parts of these factors.
According to the official, if these challenges are not addressed, they would continue to make access to mortgage a mirage for an average Nigerian. “Accessing mortgage in Nigeria is at an interest rate of around 17 percent and above. If the bank wants to give a loan seeker N14 million and his salary is N120, 000 in a state capital like Abeokuta, for instance.
“From that N120,000, his mortgage payment should not exceed N40, 000. What kind of property will he be buying that N40, 000 will be able to service his principal plus interest within a period of 10 years? So, when you look at a commercial mortgage, as it is, you see that it is outside the reach of the masses,” the official said.
The Economic Sustainability Plan (ESP)
At the peak of the Covid-19 pandemic the Federal Government came up with a N2.3 trillion Economic Sustainability Plan, part of which was the N200 billion National Social Housing aimed at delivering 300,000 homes annually for Nigerians on low-income, as well as providing jobs for the local industry.
That programme was able to deliver only 19,478 housing units in its first two years, leaving it with a 280,522 shortfall. At that rate, experts estimate that it would take 14 more years for the plan to meet the 300,000 units which was its target in 12 months.
What experts are saying
Although Debo Adejana, chairman of Real Estate Developers Association (REDAN), South West Zone, and CEO, Realty Point Limited, sees some positives in the Buhari administration’s legacy in the housing sector such as the setting up of FHF; repositioning of Federal Housing Authority (FHA); the approval of 25 percent of pension for mortgage, among others, some other stakeholders think differently.
Damola Akindolire, former managing director of Alpha Mead Development Company (AMDC), told BusinessDay that even though the administration meant well in a couple of places, its policies in this sector were largely uncoordinated, citing the banning of 41 items for importation into the country.
“There was no landmark reform such as land reform; no policy follow-through; building materials prices became a big issue in the construction sector; cement sold for N2,000 when he came but left it at N4,000,” he said.
Olubisi Shaolah, founder/CEO, Grey Finn Project Limited, said that Buhari’s eight years caused a forex crisis; made a lot of people lose their jobs, as unemployment snowballed and the economy crumbled, recording two recessions.
He noted that inflation increased tremendously just as insecurity discouraged housing development. “Apart from lowering output, these also left over 200 workers per project site in the labour market; each project employs over 200 workers including bricklayers, tilers, carpenters, and professionals,” he said.