Housing is one of the fundamental human needs in addition to food and clothing. It is equally a significant indicator of a person standard of living, and sometimes also an indication of place or status in the society.

The performance of the housing sector is a significant measure of the economic health of a nation. In advanced countries, for example the United States of America, the housing sector is a major driver of the economic engine.

However, from a few years after independence, Nigeria has song from a different song sheet in terms of housing. Access to land and affordable / habitable housing has for the most part been an unfulfilled dream to a displeasing large proportion of the middle and lower class population.

From a population of 45.21 million in 1960 to 108.50 million in 1995 and now 180 million in 2016, Nigeria remains the most populous nation on the African Continent with an estimated population growth rate of 2.83per cent per annum.

It is also one of the most rapidly urbanizing countries in Africa. Over 48per cent of Nigeria’s population lives in the urban areas.

The largest economy of Africa the country faces a national housing deficit of about 17 million units. Putting it in perspective in 1991 the housing deficit was at 7 million units. It rose to 12 million units in 2009, spiked to 14 million units in 2010 and it is now approximately 17 million units.

Currently available estimates put total annual housing production in Nigeria at around 100,000 units, barely scratching the surface of the housing needs for a country of 180 million people, who need at least 700,000 units of housing each year to commence bridging the deficit.

According to a World Bank report bridging this 17 million national housing deficit will gulp at least N59.50 trillion.

To start with and most critical of all in remedying the situation is the need for the government to fund a proper census that would address the various types of accommodation currently available nationwide. The results should then be harmonized with the current population census with a proper stratification of the various age groups and their numbers.

With this in hand, it will then be easy to undertake a property analysis of the housing needs of the populace. How many school leaves do we have? What kind of accommodation is needed for them? The logic is that a fresh school leaver is out to start life and so may only need a flat let or a one bedroom flat. It then follows for example, that when the 25 – 35 years age bracket is taken, this is the age where most people are getting married and as such at this period of their life, they would be requiring 2 – 3 bedroom flats.

With these statistics, the government and other property developers will be able to plan developments vis-à-vis what is available and what is needed. Projections for the housing needs of the future will then be easier to forecast.

The various State governments (that are interested) can initiate housing development projects in certain key areas within their States. This option is most advisable for states where housing accommodation is most acute i.e., Lagos, Rivers, etc. In each of these areas 500 – 1000 units of accommodation, 2 – 3 bedroom flats, 3,4,5 bedroom detached or semi detached houses will be constructed depending of course on the results of census and what is needed to satisfy the present accommodation needs.

These estates will be provided with all the basic infrastructural facilities to make them habitable including security. The roads should be upgraded or rehabilitated to ensure that access and exit is not hindered by excessive traffic hold-ups, which in itself could serve as a disincentive to the effective occupation of the estates.

To ensure that the housing developments are within the reach of the masses, pricing is very important. Housing being one of the basic needs of man, government should not see investments in this sector from the profit motive only. Governments should view the returns more from the positive social impact of the developments.

Assuming that indeed housing estates comprising 1000 units of mixed developments are undertaken in a certain local government area, the impact of on the life of the precinct would be tremendous. Apart from the fact that a new catchment area would have opened up, subsidiary and support activities will be introduced. Plumbers, welders, mechanics, artisans of all trades will spring up to provide support services to the residents of the estate. In doing this, employment is generated, income taxes will be paid, and tenement and ground rents will be collected resulting in increased revenue to the various authorities.

It must be pointed out that what helps and drives real estate development and marketing in any country is a dynamic mortgage financing industry. In Nigeria today, there is really not a mortgage finance industry. Where they exist, their effect has been minimally felt with the few mortgage institutions undertaking almost purely commercial banking activities. This unfortunate situation has been aggravated by the fact that financial institutions operating in Nigeria do not have access to long-term funds.

According to the National Bureau of Statistics, the real estate contribution to the Gross Domestic Product (GDP) has fluctuated around the 7per cent region over the years. 7.56per cent in 2010 and 7.73per cent in 2012. Of this figure, the mortgage loans and advances contributed 0.5per cent.

These statistics compare poorly to the size of the mortgage finance (as a ratio of GDP) of various countries. In the United Kingdom mortgage finance to GDP is about 80 per cent, in the United States it is 77per cent, 50per cent for Hong Kong. The average across Europe is 50per cent and Malaysia has 32per cent.

On the African Continent, South Africa leads with mortgage finance at 31per cent of GDP. It is barely 2per cent for Ghana.

Recently, statistics from one of the biggest financial institutions in the country indicated that of its loan able funds less than 10% of it was available beyond 12 months. Most of the funds were liabilities that had 30, 60 and 90 day maturity periods. Property investments have a payback period of sometimes up to 15/20 years and so matching these funds against real estate developments will be impossible.

Despite the collapse   of the mortgage   banks in the mid 90’s and their current quiet rejuvenation nationwide, efforts must be energized towards creating a vibrant system no matter how crude whereby housing acquisition can be eased for prospective purchasers as obtains in the developed countries. In fact, a dynamic mortgage industry is one of the major keys for growing the Nigerian nation in many ramifications. Hopefully, the Nigerian Mortgage Refinance Company (NMRC) is up to the task in this regard.

There is nowhere   in the world   where   housing   of the   citizenry   is the sole responsibility of the government. Private developers are always involved   and this being the case in Nigeria, they should be encouraged. There are many ways   to   achieve     this by   removing   impediments   and   bottlenecks to   the entrance   of these investors into this sector.

The Land Use Decree   should be reviewed   to make it in consonance   with the times.   Unless this Decree and its provisions are reviewed   access to land by both government and private developers would   continue   to be problematic and hampered.

The lopsided nature of many real estate and land related legislations in favor of the tenants and mortgagors has become a serious disincentive to investment in housing. A large number of Nigerians own properties outside the country and are very aware that it is unlikely that a tenant can live in any property without meeting his/her rental obligations and not be evicted from such a property.

In Nigeria it is indeed possible for periods upwards of 5 years, and unfortunately this will be done with the full cover of the law. Landlords are not properly protected by this legislation.

In the case of mortgages, we are all familiar with the endless litigation which mortgagors engage mortgagees in when the latter forecloses on a real estate that has been used to secure a facility which goes bad or becomes non-performing. This is despite the fact that the mortgagee will have a registered and legal interest (mortgage) over the asset. With the connivance of the law, injunctions, endless motions are brought to the courts of law all in a bid to frustrate the financial institutions from realizing the asset.

The result of all this is that the financial institutions are not willing to fund real estate transactions or use them to collaterize facilities. They would rather settle for more easily realizable securities i.e. stocks, fixed deposits etc. All these invariably end up acting as a disincentive to property developers, who pay a laudable role in increasing our housing stock.

Encouragement to property developers by governments could also come by way of tax breaks or concessions. For example   the State could   come   up with legislation   that   if a developer   can   show that he has spent N200, 000,000.00 (Two hundred million Naira) within a certain   period   then certain   tax concessions are available   to him as an incentive.

Again, the government should ease the access to land for private developers.   Theoretically the process to acquire   land for development   is by way   of an application   to the Governor   who   will then   process   same   and allocate   a plot of land where it is desired or where available. On paper it is a straightforward easy process but in reality it is a nightmare that could   last ad infinitum.

High cost of land registration and titling hinder housing delivery. To register and process land titling in Nigeria requires 21 procedures and the entire process of transfer could last 274 days.

Also to be eased   are the huge cost fees and   levies, which   the government charges   developers on real estate   transactions.   For example   in Lagos State where   a transaction is concluded,   to obtain   the governors consent   to the sale an individual has to undergo   a long process of inspections etc where all kinds of levies and fees are paid; consent fees, capital gains tax development levies, stamp duties etc. These governments have indeed discovered that this is a money yielding venture and have hung on tenaciously to this process especially in states where land values are quite high, despite the disservice this plays to property development.

What then obtains   in most developments   is that   the focus is on luxury developments   to be completed   and sold at high prices far out of the reach of the greater   proportion of the masses. Subsequently, these same properties are let out by the owners   at exorbitant   rents to enable   them   recover   the purchase   prices.

It is an opinion   that government   should   focus intensely   on the provision   of housing for the low and middle   income   groups.   The impact   of government would   be felt greater   at this level, whilst the luxury developments   could   be left to the private developers, or government acting   jointly with them.

Finally it must be agreed   that the economic   base of the nation   is still very narrow. Housing   provision   is capital   intensive   and   the   governments   with several   other  priority   projects   in view   can   only   allocate so much   of   its resources to housing development and provision. This implies that foreign investment into this sector must be encouraged. The only way that foreign investment can come in is by providing   the enabling   environment.

This enabling environment will include   a stable   polity, provision   of infrastructural facilities   for instance, electricity, water,   road   etc,   safe   and secure environment, as well as stable and consistent government policies.

With these in place   investors would   have   no reservations about   bringing   their hard earned   income   into our economy   for good   returns.

In conclusion   it can   be very easily discerned   that the challenges   of providing housing for the citizens is indeed   a huge one.   The process should not be one that lip service is paid to. It must be a planned process that will survive from administration to administration if any level of success will be achieved. The foregoing issues raised though not exhaustive will help a great deal if well implemented towards achieving these laudable objectives and making our society an easier one in which to develop or buy a house and one in which to live.


  • Ubosi is the principal partner at Ubosi Eleh & Company, a leading firm of Estate Surveyor and Valuers