Addressing Housing Deficit in Nigeria:
Issues, Challenges and Prospects
Emmanuel Abolo Moore

I.

I

Introductionn his book, Long Walk to Freedom, Nelson Mandela had this to say about his
house in Orlando West, Soweto:“It was the opposite of grand, but it was my first true home of my own and I was
mightily proud. A man is not a man until he has a house of his own.”
Abraham Maslow identified the following as the basic needs of human: food,clothing and shelter. Housing is one of the best indicators of a person’s standardof living and his/her place in the society. Like food and clothing, housing ranks
first among the three [3] basic human needs. Its availability is very crucial to thewelfare of every human. The performance of the housing sector is one of theyardsticks by which the health of a nation is measured. Housing markets andhousing construction in various economies have served as an engine of growth.
The housing sector has typically played a leading role in the process of
economic recovery from depression. Housing construction has also played an
important role in urban economies of developing countries by creating
employment, especially for unskilled labour. The construction and house building
industries have both constituted a “port of entry” to urban labour markets.
In his work for the World Bank, Grimes (1976) showed that an investment inhousing programmes, especially low-income housing, is critical because it has
the potential to draw large amounts of unused or underused labour into
production. Grimes further observed that housing construction in developing
countries could be used as a strategy to absorb slack in investment andemployment. Studies have also estimated that the construction sector, of which
residential construction usually constitutes about a third, accounts forapproximately 7.0 per cent of the total labour force in developing nations(Moavenzadeh, 1987; Spence et al., 1993).

 Dr. Emmanuel Abole Moore is the Director General, Economic Thinktank Centre Limited,

Lagos.The usual disclaimer applies.

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In most developed economies, the housing sector is seen as an important sector
for stimulating economic growth. In Nigeria, however, access to affordable
housing has largely, remained an unfulfilled dream to the vast majority, mostespecially, the middle and the lower classes of the society. The issue of housing
deficit has been growing from bad to worse and successive governments fromthe time of Nigeria’s independence 59 years ago have been grappling with thisproblem. But it seems that they have just been scratching it at the surface, e-specially as the country’s population has been growing exponentially, making
government’s efforts in this regard seem ineffectual.
The right to adequate housing that is safe, secure, healthy, available andinexpensive is enshrined in the Habitat Agenda with the goal of providing
adequate shelter for all (UN Habitat, 2001). According to Pison Housing
Company (2010), there are about 10.7 million houses in Nigeria, irrespective of
the policies, organisations and regulations which the Nigerian government has
put in place since independence in 1960, there is still a shortage of housing,
especially for the low-income segment of the society.
The Federal Mortgage Bank of Nigeria (FMBN), which is responsible for theprovision of mortgages to low-income earners through the National Housing TrustFund (NHTF), has operational and financial capability restraints that limit its
efficiency. With this, the few low-income earners who own their houses usuallyobtain land and build incrementally with their funds, while the high-income
house-owners buy with money, or mortgage finance, usually pay back over a
maximum period of 10 years (Enuenwosu, 1985; Falegan, 1980 and Akinlusi,2007). A major shortcoming has been with ownership rights under the Land Use
Act 1978, which confers ownership of all lands on the Governors of each stateand is a substantial restriction to housing and housing investment in Nigeria. In
actual fact, this right of occupancy is endorsed with a Certificate of Occupancy
issued to the recipient. This often delays and adds significant costs to theregistration process (Agboola, 1987).
Laos, critical issues affecting housing in Nigeria include; inadequate access tofinance, slow administrative procedures and the high cost of land registrationand titling (Vuyisani, 2003). Other reasons for the glaring deficit in affordable
houses in Nigeria was attributed to some of the following factors: lack ofexpertise; uncertainties in housing policies; inadequate funding; poor motivation
for relevant institutional agencies; political; and selfish gains of some key
stakeholders.
The Federal Government (2017-2020) Economic Recovery and Growth Plan
[ERCG] has proposed the setting-up of a Family Homes Fund (FHF), which isMoore: Addressing Housing Deficit in Nigeria: Issues, Challenges and Prospects

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designed to stimulate the construction sector, while improving access to social
housing. The main objectives are to overcome critical constraints in theconstruction and real estate sectors and increase the availability of financing
for the construction industry. The key strategies include:

the construction of 2,700 housing units in the short-term to create 105,000
direct jobs a year and gradually increase to 10,000 housing units perannum by 2020;
the construction of 20,000 pilot social housing units; andRepositioning of the Federal Mortgage Bank of Nigeria by recapitalising
it from N2.5 billion to N500 billion to meet the housing needs acrossNigeria.

With the above strategy, the Federal Ministry of Finance, Budget and National
Planning expects the construction and real estate sectors to grow by 5.4 percent annually (on average) from 2017 to 2020.
The objectives of this paper are to examine the dimension of housing deficit inNigeria, assess government intervention in tackling the problem of house
shortages and proffer solutions that can help reduce the deficit considerably.

II.

Conceptual Framework

Basic conceptual issues relevant to this discussion include: housing, housing
deficit, urbanisation, and housing policy. Housing is defined as a permanent
structure for human habitation. It is also referred to as the house and defined asa home, building or structure that is, a dwelling or place for habitation by humanbeings. The term “house” includes many kinds of dwellings, ranging fromrudimentary huts of nomadic tribes to free standing individual structures(Wikipedia, 2011). Williams (2007) refers to it as a dwelling place, constructed asa home for one or more persons.
It is any type of permanent shelter for man, which gives him an identity (Omoniyi
and Jiboye, 2009). Godwin (1998) defines it as “the space that we can call ourown, that gives us privacy and shelters us from the weather and intrusions of
unwanted people”. Housing in all its ramifications is more than mere shelter. It
embraces all the social services and utility that goes to make a community orneighborhood a live-able environment. Housing has become a criticalcomponent in the social, economic and health fabric of every nation. Its history
is inseparable from the social, economic, cultural and political development of
man.

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December 2019As a unit of environment, it has a profound influence on the health, efficiency,social behaviour, satisfaction, productivity and general welfare of the individualand community. It reflects the cultural, social and economic values of a society
as it appears to be the best physical and historical evidence of civilisation in acountry and a reliable measure or indicator of economic development.
According to the Collins English dictionary, housing deficit is a deficiency or lackin the number of houses needed to accommodate the population of an area.
Housing deficit refers to the number of shelters which do not have adequate
conditions to be habitable, plus the number of housing units that need to bebuilt to shelter all families who currently lack one and as a result, share a shelterwith another household in overcrowded conditions (Carols, 2012). It can also bemeasured as the difference between the number of households and thenumber of permanent dwellings. The deficit can be estimated for a given periodof time (flow), for example, an annual deficit, or it can be at a given date inwhich case it is sometimes referred to as housing backlog (stock). It has been
estimated that 75.0 per cent of the housing deficit in Nigeria is concentrated infamilies earning less than three times the minimum wage (World Bank 2013).
Urbanisation refers to a process whereby human beings congregate in relatively
large number at one particular spot of the earth’s surface. Urbanisation is also
viewed as the process of human agglomerations in multifunctional settlementsof relatively substantial size. The UN-Habitat (2006), describes it as the increased
concentration of people in cities rather than in rural areas. The urbanisation levelof a country is the proportion of its total population residing in urban areas. Put
differently, it is the size of the urban population divided by the size of the total
population. Therefore, an increase in the number of rural-urban migrants results
in an increase in the urban population.
Urbanisation represents the movement of people from rural areas to urban areas
with population growth equating to urban migration and it is one of the majorsocial transformations sweeping the globe. The consequence of the rapid
urbanisation process and inadequate urban planning are increased pressure on
urban infrastructure and resources, growing housing deficits resulting in more
people living in slums, urban sprawl in major agglomerations, and accelerating
loss of agricultural lands.
A housing policy provides a guide which delimits action and sets goals but does
not necessarily specify any defined strategies for achieving the goal other thanbroad strategies. It establishes guidelines and limits for discretionary actions by
individuals responsible for implementing the overall plans of action. In theliterature on housing, researchers have noted that some housing policy decisions(written or implied) express the overall past work of governments, while others

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are goal statement or prescription of elemental rules for the conduct of personalor organisational affairs. Policies are thus considered to be well- reasoned,
carefully-articulated and presented documents.

III.

Current Level of Housing Deficit in Nigeria

A recent study of housing situation in Nigeria put existing housing stock at 23 per1000 inhabitant. The country’s present housing deficit as at December 2018 isestimated at a staggering 20 million unit which is about 15.0 per cent increase
from the figures in January 2019. About N21 trillion will be required to finance thedeficit. With a population of nearly 200 million, the current deficit is alarmingly
high. In 1991, Nigeria housing deficit was at 7 million and rose to 12 million in 2007,
14 million in 2010 and currently 20 million units. House prices and rents, on theother hand, have grown ahead of general inflation. Making matters worse, thecomposition of houses for sale and rent on the market has been inexorably
shifting towards very expensive houses.
Also, experts believe that it is only 10 per cent of those who desire owning ahome in Nigeria that can afford it, either by way of purchase or personal
construction as against:

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72.0 per cent in USA;78.0 per cent in UK;
60.0 per cent in China;
54.0 per cent in Korea; and92.0 per cent in Singapore.

Table 1 shows the housing deficit of randomly selected six African countries,
including Nigeria.
Table 1: Housing Deficit of Six Selected African countries
S/N

CountryYear

1

Nigeria

2
3
4
5

Ghana
Kenya
UgandaSouth
AfricaEthiopia

6

Estimated Housing
Deficit (2019)2016-2019

Estimated
Population(2016-2019)
185 -200 million

2016-20192016-20192016-20192016-201928-30 million
45 - 52 million
37 - 43 million
56 - 58 million

1.7-2.6 million unit
2 million unit
1.7 – 2 million unit
2.5 million unit

2016-2019

98 - 103 million

1.2 million unit

Source: Affordable Housing Investment Summit-2019

18 - 22 million unit

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The above data reflects the urgent need to craft better strategies for better
housing delivery in Nigeria to stem the rising trend of housing deficit. Models of
housing delivery from developed countries can be adopted with varying levelsof modification to suit the existing political and economic situations of thecountry. Nigeria’s housing deficit trend between 1991 till date is graphically
represented in Table 2 which shows the estimated housing deficit and causes.

Year
1991-19932007
2013-20152017-2019

Table 2: Trend in Nigeria’s Housing Deficit [1991-2019]
Housing Deficit PopulationCause
4 – 7 million
104 million
Mortgage inefficiency
8 – 10 million
145 million
Slum demolition and Urban
Migration
16 – 17 million
178 million
Over population urban expansion
and increased poverty
18 – 22 million
184 million
Increased poverty, overpopulation
and urban migration

The implications of this very high housing deficit is that tenants in rented
apartments pay as high as 60 per cent of their average disposable income, farhigher than the 20-30 per cent, recommended by the United Nations. A WorldBank study projects that the cost of bridging this 20 million housing deficit is N59.5
trillion, indicating the vast and untapped investment potential of Nigeria’s realestate sector.
Currently, our housing and construction sector accounts for only 3.1 per cent of
our rebased GDP, while the total current housing production is at about 100,000
units per year, which is grossly inadequate for a country of nearly 200 million
people. Therefore, we need at least about 1,000,000 additional units each year
to have a chance of bridging this huge gap. In Nigeria, neither the government
nor the private sector provides enough housing units, especially for the masses
that need and demand it. Formal housing production is at approximately 100
000 units per year and this is highly inadequate because at least 1,000,000 units
are needed yearly to bridge the 18 to 22 million housing deficits by government’s
target date of 2033 (if the population continues at its annual growth rate of 3.5
per cent). It is estimated that it will cost US$363 billion to curb the current housing
deficit and the number is expected to keep growing.
The current administration has stated that it would supply two million new
middle-class homes in the first year of its tenure (2015), and one million new
middle-class homes for every following year. This would be coupled with four
million lower-income houses and homeowners by the end of his first four-year

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term. This was to be rolled out with longer mortgage payment structures.
However, given the myriad of economic challenges the country faced overyears, housing has not been high on the political agenda. There was also to bea National Infrastructure Development Bank, capable of providing nominal
single digit interest rates, but this has also not been implemented.
The rapid population increase and rural to urban migration have contributed tothe shortfall of housing in Nigerian urban centers. The unresolved tenurearrangements, cost of building materials, access to infrastructure, deficiency of
housing finance arrangements, stringent loan conditions from mortgage banks,
time to process legal documents and inadequate government housing policies
are also major issues affecting housing delivery in Nigeria.

IV.
Review of the Past Governments’ Interventions in Housing Delivery
in Nigeria
In this section, we take a brief look at past and present housing policies andprogrammes in Nigeria with focus on four periods of government intervention.
These include the colonial, post-independence, second civilian administrationand post second republic periods till the present date.

IV.1

The Colonial Period

Government intervention in housing in Nigeria started in earnest right from thecolonial era. Housing policies and activities in Nigeria during this phase of official
intervention were mainly centered on the provision of quarters for expatriate
staff, as well as, selected indigenous staff in some specialised occupations likerailways and police, a situation that led to the emergence of the Government
Residential Areas (GRAs) in Nigeria.
The underlying idea in the establishments of the GRAs was to create conducive
environments for the expatriates, comparable to the living conditions in theirrespective countries. Their housing quarters were well planned, with all thepossible comfort, services and amenities: including water, closed sewers,
electricity and abundance of open space and recreational areas. The idea of
housing reservation was thus initiated and implemented in Lagos and in regional
and provincial capitals throughout the country.
The Surulere Housing Scheme in Lagos, which was established in the late 1950s,
was partly designed to provide temporary residential housing for the displaced
people from the slum areas of Central Lagos. The Scheme, however, became
permanent housing for such families as a result of problems associated with there-allocation of redeveloped land in Central Lagos. The need to clear the slums

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in Lagos gave birth to the Central Lagos Slum Clearance Scheme in 1995, which
opened up Apapa and later Victoria Island as high and low-density areas ofLagos.
The Lagos Executive Development Board (LEDB) in a bid to find solution to the
public housing problems in the Lagos metropolis, established the following
schemes:

Akinsemoyin and Eric Moore Housing Estate, Surulere;
Freehold Housing Scheme and Site and Services Estate at Surulere,
Apapa, Southeast and Southwest Ikoyi, Lupe and Isolo Estates;
Workers Housing Estate and Re-Housing Estate; andWorkers Housing Estate (Phase (II), Surulere.

In 1958, housing corporations were established by the Western Regional
Government, an act that was soon emulated by other regions. The primary andmajor functions of the housing corporations were the construction of housing
units for sale to members of the public and the granting of loans to whoever
wished to build their own houses on their land.

IV.2

Post-Independence Era (1960-1979)

Emphasis in official intervention in the housing sector during this period was laidon the five-year development plans as instruments for economic growth. In thefirst two plans (1960 - 1970), the situation in the housing sector worsened as theplans were poorly implemented. This was further compounded by the outbreakof the civil war, especially in the war-affected areas. The third plan, whichspanned 1975 to 1980 spilling over to the second civilian administration,
witnessed some improvements. Within this period, government recognised the
housing problems and saw the need to increase the provision of housing
infrastructure to a substantial level through government participation.
The Federal Government’s housing interventions through some of its agencies
include:




IV.3

The Nigeria Army Housing Scheme;
The Nigerian Police Force (NPF) Housing Scheme; andThe Nigeria Port Authority (NPA) Housing Scheme, etc.

Second Civilian Administration Era (1980-1983)

This era saw a steady increase in public sector involvement in housing delivery
and ushered in an epochal recognition by government of the importance of theMoore: Addressing Housing Deficit in Nigeria: Issues, Challenges and Prospects

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housing sector. Most of the strategies and activities during this period had public
involvement in the provision of shelter as their common feature. Despite theincreased public interest in the housing sector, the period witnessed huge
failures. When government allocated N1.9 billion for housing construction to thetwenty states of Nigeria existing at that time, only little tangible impact was felt.
By June 1983, N600 million (37.5 per cent) had been spent to complete only
32,000 units, yielding an overall achievement level of 20.0 per cent (Federal
Republic of Nigeria, 1991).
The period coincided with the fourth national development plan period. It
witnessed the continued increasing deficit on urban housing and its continued
deterioration in the rural areas. The beneficiaries of this programme wereidentified as the low-income earners whose annual income did not exceed
N8,000. Moreover, this phase of the programme failed to take off in most states
and that the shelter policy ended abruptly in December 1983, paving way for a
fresh look at the housing sector which culminated in the new National Housing
Policy.

IV.4

Post Second Republic Period till Date (1984 to Date)

Most activities in the area of housing were not done at the onset of this period
as it has been very much transitional. The Federal Government was preoccupied
with the preparation of a new National Housing Policy. The Policy was finalised
and launched in February 1991. The Policy has since become operational as thedetailed modalities for its implementation have been put in place. The underperformance of the National Housing Policy in meeting its set goals andobjectives led to a comprehensive review, which culminated in the Housing and
Urban Development Policy of 2002. The National Housing Policy was proposedin 2002, and its first draft, came into effect in January 2004. The major thrust of
the Housing and Urban Development Policy is to meet the quantitative housingneeds of Nigerians through mortgage finance.
The Policy was revised in 2004 detailing strategies for housing provision and theinstitutional framework. As proposed by the Presidential Technical Committee on
Urban Development and Housing, the framework for its operation involved
restructuring of the existing structures and the creation of new ones. The housingreforms also involved the establishment of the Federal Ministry of Housing and
Urban Development which was saddled with the responsibility of adequately
addressing the complex challenges of the urban sector.
Some of the reasons identified for the failure of past major government
interventions to meet set objectives were:210

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Economic and Financial Review

December 2019Non-consideration of low-income earners by planners during design anddevelopment of the housing programmes;
Lack of access to credit facility due to high interest rate;
Low incentives and concession to investors;
Low mortgage penetration, less than 5 per cent of houses have formal
title registration;
High cost of land especially in the urban areas;
High cost of labour;
Absence of effective primary infrastructure (good roads andtransportation);
Slow bureaucratic procedures: to register/transfer title could take from 6
months to 2 years. It has too many processes which are slow,
cumbersome, unreliable and inefficient;High cost of building inputs; andThe inability of most workers especially civil servants and self-employedperson at the lower rung of the income strata to afford equity
contribution and meet monthly affordability demand of repaying amortgage loan, which must be equal to 33.0 per cent of the applicant’s
monthly income.

Present Government Initiative on Housing Delivery in Nigeria

To bridge the existing deficit in housing delivery in Nigeria, the current
Administration is set to implement an aggressive intervention housing
programme to increase housing supply. Government has evaluated several
options and adopted 6 (Six) designs, with input from a diverse team of Architectsfrom across the country to meet the specific socio-economic, climatic anddiverse cultural needs of the people from different parts of Nigeria.
The designs entail: 1, 2- and 3-Bedroom bungalows, with court yards, in the North-East, NorthWest and North-Central parts of Nigeria·
 Blocks of 16 and 24 flats of 1, 2 and 3 bedrooms and Bungalows of 1 and2 bedrooms in the South-South, South-East and South-West of Nigeria andthe Federal Capital Territory
The Housing sub-sector is experiencing very notable transformation:Recapitalisation of Mortgage Banks;
National PMBs: minimum paid-up capital of N5 billion (US$31.2 million);
Resuscitation of FMBN with N500 billion (US$1.42 billion) to make
Mortgage facilities available to Nigerians;

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Establishment of the Nigeria Mortgage Refinance Company (NMRC);
Improved operational efficiency for mortgage banks.
Seamless integration of the customers of Mortgage Banks into the BVN
platform
Issuance of NUBAN Numbers to facilitate online transactions for
Mortgage Bank customers
Amendment of Pension Act to facilitate withdrawals from RSA for down
payments on equity contribution to boost inclusion
Establishment of Mortgage Brokerage firms
Collateral Replacement Indemnity (CRI) to boost inclusion for up to 95.0
per cent from 80.0 per cent Loan to Value (LTV).
The Federal Government in May 2017 directed the Federal Mortgage
Bank of Nigeria to waive the payment of 10 per cent equity on
mortgages below N5 million (US$15,000).
Establishment of the Social Housing Fund: Both the World Bank and AFDB
are contributors to the Fund from which developers will borrow 80.0 per
cent of cost of project and counter-fund with their own 20.0 per cent.

VI.1 Key Issues/Challenges Affecting Affordable Housing Delivery in
Nigeriai.

Paucity of Long-term Funds

Currently, the prime lending rate in the banking sector remains as high as 17.5
per cent (CIA World Factbook) and it is impossible to use such funds for housingdevelopment. It is pertinent to note that the government has realised this and isreviewing the entire process of accessing mortgages, so as to bring it within thereach of beneficiaries. Perceived risks, high costs of doing business and longer
term for returns create a situation where the affordable housing sector lands
directly in competition with other types of real estate investments likecommercial spaces, luxury segment and high-end housing which are perceived
to reap greater and faster benefits on investment.

ii.

Housing Finance

The financing of housing development, like many other development issues
faced by African countries, including Nigeria is quite challenging. This is mainly
due to the lack of adequate conditions or resources to facilitate such financing.
In fact, the housing finance market in Africa is exposed to a number of risks.
Diamond and Lea (1995) classify these risks under six categories:

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December 2019credit risk arising from the fact that the borrowers may fail to pay backtheir loans;liquidity risk stemming from maturity mismatch;
cash flow risk—which include interest rate, prepayment, inflation, andexchange rate risks— increase uncertainty about cash flows over time as
the credit may be worth more or less over time;
agency risk or information asymmetry risk (moral hazard or adverse
selection type of risks) that a divergence of interests will cause anintermediary to behave in a manner other than expected;
systemic risk, or the risk that a crisis at one institution or in a part of thesystem will affect the whole system; andpolitical risk, which refers to uncertainty about adverse government
action that can trigger the other risks.

The above risks are reflected by a very challenging environment characterised
by weak legal frameworks and enforcement of property rights, by information
asymmetry and credit risk, and by low levels of financial intermediation and alack of long-term funding.

iii.

Rural-Urban Migration/Urbanisation

This is the movement of people from rural areas to urban centres causing
population explosion in such areas. Over the years, there has been rapid
urbanisation in Nigeria. This has led to people settling in very unsanitaryenvironments.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.

Property Registration and Title Documentation
Land Use Act
Infrastructural Inadequacy
High Cost of Building Materials
Enforcing Foreclosure
Nigeria Tax System
Construction Methods
Construction Permits Issue

VI.2

Policy Options and the Way Forward

Nigeria’s housing sector has failed to adequately accommodate the needs oflow- and middle-income families. As a result, moving up the property ladder is
as challenging as getting a first foot on it. In many cases, house prices are out ofreach for a majority of the population. We have been able to show that owning

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a decent house is still an unattainable goal for many Nigerian households. The
lack of affordable housing finance, high costs of urban land and weak tenure
security, rising construction costs, and prevalence of slums are major challenges
to efforts to alleviate the continent’s housing crisis.
There has been a surge in the demand for housing, effectively driving up housing
prices and pushing quality housing out of reach for the majority of those who arein need, especially poor and middle-income households. Simultaneously, slum
populations have continued to grow, as social housing cannot keep up with thedemand from those in the bottom half of the income distribution. Affordability
issues are preventing households from getting their foot on or moving up the
housing ladder.
The need for housing in Nigeria is enormous and its delivery depends on theactive participation of both the public and private sectors. To increase housing
stock in Nigeria, there is the need to incorporate affordable housing delivery
scheme into the formulation and implementation of housing policies andprogrammes, which should not be at the exclusive preserve of the Federal
Government to the exclusion of governments at both state local government
levels.
There is a need now, to reach out and effectively involve the people andgovernments at grassroots levels in the formulation of housing policies. The
Federal Government has been directly involved in the construction of buildings
for all categories in the past and even at present. It is now necessary that housing
must be considered as a personal service and as such, the primary responsibilityof housing should not be left to the people themselves who should be assisted
in some ways in order to realise their aspirations for self-actualisation of owning
individual houses. Learning from developed countries model of housing delivery,
we recommend as follows:

VI.2.1 Redefinition of the Role of Government
Nigeria’s housing crisis can be solved only by the unwavering commitment andpolitical will of the government, given the long-term nature of housing assets.
Morocco provides a concrete example of how restructuring the relationshipbetween the state, the private sector, and the community can accelerate
progress in easing the housing crisis.
The strong political will demonstrated by the Ethiopian Government in its
Integrated Housing Development Programme is another notable example. The
starting point for government support should focus on creating an enabling

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to build and finance housing acquisition for all household segments, especiallylow- and middle-income families.
Several governments in Latin America, such as that of Chile, have adopted theenabling approach to successfully reform their housing policies and systems. An
enabling market approach will require an overhaul of government housing
policies, institutions, laws, and regulations in order to support a well-functioning
and efficient housing market. The enabling approach changes the role ofgovernment from a provider of housing, which it had not been effective infulfilling in most cases, to that of a facilitator.

VI.2.2 Policy and Regulation: Difficulty in procuring consents fortransfers, title deeds and very high processing costs.
State governments should make administrative amendments to the Land Use
Act to delegate endorsement of consent to Commissioners and at the national
level, the Director of Lands. There is need to simplify land title registration throughthe revision of procedures and cost structure. Revised fee schedule should becapped at 0.5 per cent. Subsequent land transactions should not require
Governor’s consent but simply registration of title. Also, the policies andprogrammes of governments should be aimed at the low-income segment by
assisting them to acquire, build or improve their homes through easy accessibility
to land and securing title documents.

VI.2.3 Financial Sector Reforms
Housing microfinance for the low-income population is critical, and resources
should be committed to researching and understanding this emerging sector.
There should be concerted technical assistance programmes and housing
support services to be administered by the government. The CBN should ensurethat PMIs re-capitalise to position them to finance big ticket transactions and toprovide long-term funding to developers and end users. The CBN should also
encourage Mergers and Acquisitions among PMIs and institutionalise the Codeof Corporate Governance for PMIs.
CBN should issue a 20–25-year bond in collaboration with the Debt
Management Office and use the proceeds to refinance eligible mortgages. The
FMBN should be adequately resourced by the government to strengthen its
financial and operational capabilities. The financial sector should also develop
new and innovative solutions for serving low- and middle-income households. As
standard mortgages are not the solution for all housing segments, other products

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such as incremental building loans should be developed for low-income
households. In addition, more work needs to be done to better understand andserve households in the informal sector that may need decent incomes yet are
entirely excluded from housing finance.

VI.2.4 Capacity building and knowledge gap
The CBN, FMBN, Housing Finance Professionals Association of Nigeria (HOFPAN)
and Mortgage Bankers Association of Nigeria (MBAN) should collaborate to
institutionalise training leading to the certification of professionals in themortgage and housing finance sectors. The National Universities Commission(NUC) should be able to offer courses on housing finance at the various
Universities. A Real Estate Information Centre that will warehouse data andinformation on real estate and housing market should be established. The Centre
should serve as repository of market information on key data in the housing
sector. Capacity development and training for real estate professionals should
be done through local and international training programmes, seminars,
workshops and study visits.

VI.2.5 Urban Planning
Perhaps the most important regulatory tool at governments’ disposal for guiding
urbanisation and city growth is urban planning. It is the policy that defines theuse of land, the design of urban infrastructure, communication networks andprovisions that provides protection of the natural environment. It also provides
mechanisms for urban expansion and for making land available for housingdevelopment.
It is the absence of up-to-date urban plans and/or the effective enforcement ofexisting plans that have led to urban sprawl and unplanned growth in many
cities in Nigeria. These conditions have led to a scarcity of well-located lands forhousing and to cost escalations for land, infrastructure, and housing. Therefore,
to improve the efficiency of cities and enable them to fully play their economicrole, the government should regularly update its urban plans and ensure thatthey are grounded in local realities.

VI.2.6 Government Involvement
One important lesson is that the Federal Government should not engage indirect housing construction. Studies have shown that individuals build better andcheaper houses and at faster rate than the government agencies. We should
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policy formulation and provision of funds for research and matching grants tothe states. Nigeria should adopt this model too.
Another lesson is that the government should encourage the use of local
building materials for construction so as to reduce building cost. This has beensuccessfully done in counties like Tanzania, and Sweden. Entrepreneurs wishing
to go into the production of building materials should be encouraged with tax
relief and incentives. Government should equally promote alternative strategies
for house construction. For example, the government might acquire land, lay
them out and service them with basic infrastructures before making themavailable for sale to individuals needing them.
Government should build low-cost houses to cater for the large number ofpeople who, due to their low-income earnings, could not afford a decent home.
Employers should also advance building loans to their staff with little or no interest
to enable them to build their own houses. This will go a long way in ensuring
equal distribution of house ownership.
There are other issues to be addressed:

Research institutes should be encouraged to exploit local raw materials
and produce alternative building materials from them.

The national development plan of Nigeria should thoroughly takehousing problems in the country into consideration and give provisionof habitable accommodation to citizens its rightful place.

Urgent need to develop the rural areas to reduce rural-urban migration.

Provision of social amenities such as electricity, good road networks,
proper drainage systems and the likes will go a long way to ease
housing development in areas where these are lacking. It will also help
decongest highly populated cities.

VI.3

Role of the Private Sector

The private sector is a key partner to governments and nonprofits in scaling up
the supply of affordable housing. Essentially, the private sector should be at theforefront of developing, innovating, and financing affordable housing solutions.
As the government creates a better enabling environment, the private sector
needs to improve its processes to increase efficiency and capacity to deliver atscale. Better linkages between firms of different sizes and capacity-buildingMoore: Addressing Housing Deficit in Nigeria: Issues, Challenges and Prospects

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programmes through industry organisations can improve both the capacity andproductivity of the sector.
Industry organisations also need to promote best practices and combat inertia
and resistance to change, which is endemic in the construction sector.
Moreover, better industrial organisation with a greater role for prefabrication ofbuilding systems can boost productivity and lower construction times and costs.
However, for this to work, the regulatory environment needs to be supportive as,for example, through standardising building codes and dimensions of housing
components.

VII.

Concluding RemarksThe role of the government in creating an enabling environment for the
housing sector is extremely critical. However, the government cannot
achieve the goal of affordable housing provision with partial solutions.



The provision of affordable housing depends in particular on the strong
and unwavering political will of governments, as well as, thedevelopment and implementation of effective housing policies.
Achieving other policies will require strengthening the coordination
among public institutions and government ministries that play a crucialrole in housing, including ministries of finance.



In view of the housing challenges we have so far enumerated, it is clearthat the government on its own cannot resolve the country’s housingcrisis.



There is an urgent and growing need for development partners and theprivate sector to join the government to tackle the crisis.

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