THE CHALLENGES OF HOME OWNERSHIP IN NIGERIA

 TRANSFORMATION AGENDA OF THE FEDERAL GOVERNEMENT AND THE CHALLENGES OF HOME OWNERSHIP IN NIGERIA: WHICH WAY FORWARD FOR STATE AND FEDERAL GOVERNMENT

One of the most basic needs of people is shelter but in Nigeria and in sub-Sahara African most people still find housing a major challenge as even the smallest units are out their reach. It is interesting to note that all governments since Independence have always highlighted housing as a major priority. Although, the Federal government established the Federal Mortgage Bank to assist Nigerians in this regards, terms and conditions for mortgage loans have continually made it inaccessible to majority of Nigerians. Many housing developers have emerged in recent years in Nigeria, however the cost of owing such houses have almost made impossible to buy from them

The Federal Government under President YarAdua created the Ministry of Lands, Housing and Urban Development from the former the erstwhile Ministry of Works and Housing and tasked it with the provision of housing across the country; however a lot need to be done to address the huge gap existing in the housing sector.

MAJOR OBSTACLES TO HOUSING DELIVERY IN NIGERIA

In 1978 the Obasanjo regime passed the Land Use Act which vests the ownership of all Land in the government. Accessing the land for both Agriculture and Housing Development became a major problem. On assumption of office the President YarAdua promised to review the Land Use Act to make land more accessible. This pledge of Mr. President was not fully address before he died in 2010

Another challenge facing the housing delivery is the high cost of building materials in Nigeria. There are some restrictions on the importation of some building materials. Cement factories in Nigeria for instance are not meeting the local demand. Also steel which is needed in the building industry is hardly produced locally and since local currency fluctuate against foreign currencies prices of steel is not always stable. It was in need to address the problem of steel import that lead government to establish steel industries but they have not been in operation fully since establishment. With housing deficit hovering around 16 million units of housing, urgent measure should be put in place to avoid crisis in the future. This number of housing units will cost more than N45trn being speculated the way cost of building materials keep changing. Meanwhile in order to provide decent and affordable mass houses to meet the nation’s housing requirement, the Vision 2020 economic blueprint had recommended the construction of 600,000 housing units by the Federal Ministry of Housing. The State governments are not helping in regards to housing provision even in the state where they hold sway.

The high interest charged by financial institutions like banks have made acquisition of houses inaccessible. The government does not provide its workers necessary support to own houses in Nigeria as it is done in other developed economies.

In most cities in Nigeria, government does not have record of its housing stock because record keeping is very poor. Migration records are also very poor and so government does not know the population of its cities beyond the census figures that released. When a government cannot tell its population, it goes to show that hardly will it be able to predict its housing need at the time.

There is lack of basic infrastructure like roads, water and electricity in most town and villages in Nigeria and these are major challenges to providing affordable housing. In most cases developers have to provide the infrastructure which invariably increases the cost of the houses they produce thus making such houses unaffordable.

Registering property constitutes one of challenges facing the housing sector in the country. Streets are not well organized, so property registration is a problem. According to the World Bank report, “Doing Business in 2007 – How to Reform”, Nigeria’s reforms have led to a reduction in the time required to complete the process of property registration from 274 to 80 days, but a lot still needs to be done because it takes only 1 day in some other countries such as Norway and Singapore. We should however note that part of the reduction in time is likely a result of improvements in property registration which has been implemented in Abuja and Lagos. It is pertinent for other state governments to replicate the improvements achieved in the Abuja Geographic Information System (AGIS) and Lagos State’s in their various states as investors are comfortable in environments where registration is automated and procedures are minimal, and will be glad to invest in such places.

The belief that housing will be provided by the government is another problem in mass housing initiative. Government cannot provide housing for its population alone without involving the private sector. Providing the enabling environment to encourage private sector involvement us important if government is sincere.

THE WAY FORWARD FOR HOUSING DELIVERY IN NIGERIA

Before June 2012, Nigeria had not reviewed its housing policy for more than twenty years. What this means is that the country has been operating a policy which had made investment in housing provision and the participation of the private sector difficult. With the approval of a new housing policy by the Federal Executive Council, it is hoped that more investment will be available for housing delivery in Nigeria.

Government need to provide guarantees in the form of mortgage insurance to lenders for loans granted to first time buyers especially those engaged in formal sector of the economy with no credit history and low to middle income families once such mortgage loans meet prescribed underwriting standards. The government should be in position to indemnify the lenders to a prescribed level, when there defaults, to encourage future lending.

Government should encourage local industrialist to establish more industries that support local inputs like cement, iron rods, roofing sheets among others.To bring down the cost of building material and stimulate construction, as well as make housing more affordable to the Nigerian population, government should in the interim reconsider its restrictions on the importation of cement and other building materials.

 Government should encourage research into the use of local raw materials to make housing provision more affordable to the Nigeria people. You must generate internal capacity in terms of building materials and manpower to be able to deliver sufficient products as far as housing delivery system is concerned. Where that is lacking there can be no progress.

The three tiers of government should invest more in providing basic infrastructure like roads, water and electricity, to reduce the burden private investment in such those reducing the housing cost on its populace.

The Federal Mortgage bank should be made more responsive to the housing provision by facilitating housing mortgage loans to those in need of such loans. The Central Bank of Nigeria should ensure the transfer of N1.5 billion housing share from the Central Bank of Nigeria to revive and boost the activities of the mortgage institute as promised by the minister of Housing and Urban Development. No nation has attained sufficiency in housing delivery system if it fails to roll out a virile mortgage institution that is affordable and workable.

There is a World Bank report which states stated that for the issue of housing to be properly addressed in Nigeria, a minimum of one million housing units should be built annually. With the pace housing development is going in Nigeria, even a quarter of the figure is not being met annually. Nigeria still depends on artisans and technicians from neighboring countries like Ghana, Togo, Cote d’Ivoire to cater for installations like tiles, plumbing, electrical and others in spite of the fact that we have a country that can boost of 140 million people. To solve this problem, the country must strengthen its Technical colleges to build capacity which will reduce its dependence on technicians from neighboring countries.

Federal Mortgage Bank in its report on Challenges facing Housing Delivery in Nigeria said that Nigeria requires about N45tn to solve its housing deficit, currently estimated at 16 million units.

Samson Ameh Opaluwah (Ph.D)