By Olufemi Oyedele

On July 31, 2014, the Federal Government, in Abuja, launched the first 10,000 mortgages for affordable homes scheme. The then Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, stated that the Federal Government’s 10,000 mortgage scheme was inspired by former President Goodluck Jonathan’s pledge on January 16, 2014 when he launched the Nigerian Mortgage Refinancing Company (NMRC) with a view to making mortgage accessible to Nigerians to enable them purchase and own their own homes. Through this scheme, Nigerians were assured of being pre-qualified for 10,000 mortgages to be provided by lenders most of whom were present at the launch. The NMRC was set up as a re-financing vehicle to provide mortgage lending institutions with increased access to liquidity and long-term funds, since the ability of banks to deliver mortgage services is limited by the fact that 80 per cent of all bank deposits are for 30 days only. Housing has a longer gestation period than commercial loans can accommodate. The NMRC, in ensuring greater access to finance for tenure of up to 20 years, was to accelerate the growth of the mortgage market for all income levels. The 10,000 mortgages scheme has been derailed by inconsistency of government policies in Nigeria.

On November 21, 2013, former President Goodluck Ebele Jonathan stated that Nigeria needs N56 trillion to bridge the country’s 17 million housing units deficit. Jonathan stated this at the 53rd General Assembly of the Nigerian Institute of Architects (NIA) in Abuja. The shortfall alone minus infrastructure, according to the former President, would require more than N56 trillion, at an average cost of N3.291 million per housing unit to remedy our housing situation. 10,000 homes out of the required 17 million homes are a far cry from our housing need and a child’s play. If 10,000 units of three bedroom bungalows are built every year, it will take one thousand and seven hundred years for the country to meet her housing need assuming demand for housing remains constant. Ifeanyi Onuba of The Punch on Sunday, August 10, 2014, page 25, reported that the Federal Mortgage Bank of Nigeria (FMBN) has disbursed a sum of N100.5 billion for building projects under the National Housing Fund (NHF). The NHF is a Federal Government scheme in which every Nigerian above the age of 21 in paid employment is entitled to a low interest government funded loan for a housing project. At a conservative cost of N3.5 million per three bedroom bungalow on a free land, this amount could only provide 287, 714 houses. With the way funds are managed in Nigeria, about 70 per cent of this grant will be expended on administrative expenses by the managers, while about 30 per cent will be disbursed as mortgages. This amount will deliver 86,314 units of three bedroom flats at N3.5 million per unit. Our zero infinitesimal delivery approach in housing, despite its recorded successes in helping to develop economies, is our major bane. This also means that we are still not serious from considerably reducing our housing needs.


The second problem with the above scheme is patronage by Nigerians. Demand for housing is a factor of income. In a country were over eighty per cent of the adults are either not employed or under-employed, one wonder how the mortgage will be repaid. In countries with higher employment rates like United States of America and United Kingdom, mortgage repayment still pose a problem, how much more Nigeria where over 80 per cent of the workforce are not employed or underemployed. In 2006, Professor Gbenga Nubi of the Faculty of Environmental Sciences of University of Lagos, established the fact that unless most senior civil servants in Nigeria perpetuate fraud, they cannot afford to purchase a two bedroom flat with their salaries with the attendant costs of feeding, transportation, electricity, telephone and medicals, in Housing finance in Nigeria: A need for Re-engineering. He suggested alternative financing approaches like integrated rural development, compulsory housing savings scheme, securitization and housing bond. Pension fund reserve in Nigeria which is now over N6.0 trillion, according to the Pension Commission, can also be used for housing provision. The potent solution to our housing problem is the development of social housing as housing should not be a poverty index. In a country with over eighty per cent of people within the poverty threshold, housing cannot be viewed as an economic good only. It is equally a social good. Housing is a right and several local and international covenants guarantee the right of people to social protection that will help to eliminate the worst manifestations of poverty. Chapter II of the Nigerian Constitution expressly provided, among other provisions, for the social protection of all. Convention 102 of the International Labour Organisation (ILO) (1952) on social security minimum standards emphasizes the following nine (9) specific social protection factors: medical care, sickness, unemployment, old age, employment injury, family allowances, maternity allowances, invalidity and survivors. Food and housing are considered as given.

The Universal Declaration of Human Rights (1948), Article 22 provides that Each person, as a member of society, has a right to social security, each person is entitled to obtain satisfaction of her/his economic, social and cultural rights, inherent to her/his dignity and to the free development of her/his personality, by the national effort and by international cooperation, taking into account the organisation and resources of each country. Without housing, nobody can ufully enjoy his/her right to the free development of his/her personality. Adequate public infrastructure provision is a veritable tool of ensuring sense of belonging of the people and of reducing poverty and crimes. Housing infrastructure development, due to its nature, can be used to develop an economy. Housing construction generates high level of employment, involves great number of participants, does not accommodate class discrimination and is gender-friendly.

The right to housing is founded, deeply rooted and recognised under international laws. It was enunciated under Article 25 (1) of the Universal Declaration of Human Rights. The right to adequate housing has been codified in other major international human rights treaties. Article II (1) of the International Committee on Economic, Social and Cultural Rights (ICESCR) provides that states parties to the present covenant recognise the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of his living condition. The problems with Nigeria housing include the fact that some houses are over-designed in terms of space and quality. Most developers do not pay adequate taxes on their property development to the appropriate government authorities to redistribute wealth. Many developed houses do not have approved building plans, so revenues were not generated on the houses by governments. In some cases, because of the level of poverty versus the degree of aspiration to have a house, a lot of people develop houses with low quality materials and workmanship to save cost. This has often times resulted into building-collapse. Inheritance taxes are not paid after the demised of the owners of properties by the heirs and inheritors.

Some unnecessary features are included in the houses of the rich just because they have access to free funds. Some houses are finished, mostly in branded areas, and are not occupied due to outrageous rents being demanded by the landlords and/or their agents. There is no law in place to tax vacant properties more than the occupied to encourage occupation and market dynamics. Some people have more than one house at no extra cost to them. Nigeria has more than her share of abandoned housing projects due to problematic cash flow. In a country with over 911,000 kilometre square of land mass, oceans, rivers and lagoons are being sand-filled to create housing estates. These and many more cause capital sink. The first house of any man is basic and should be assisted or subsidised. Any other one is investment and should be heavily discouraged through taxation. There must be register of property owners in Nigeria to know each person’s holding capacity. A house is a basic need that shelters people and gives them comfort. It is a place where people strategise, plan their future, and train their offspring. It also serves as working and resting place. A house is a status booster and the notion of owning a house bestows confidence on its owners irrespective of class. According to Professor Tunde Agbola of Department of Urban and Regional Planning, University of Ibadan, housing is a bundle of joy. Renters and homeless go through moments of stress, distress and uncertainties. A house is a common good that every adult who is working, either as a business man or in paid employment (formal and informal workers), should have. Proper housing can reduce health problems and crime. Since health is wealth, effective property taxation and housing development can be used to redistribute wealth and reduce poverty.

The 10,000 homes mortgage launched in 2014 by the Federal Government is good and welcome. Recent plans by the federal authorities of President Muhammadu Buhari to adopt sustainable housing programme, promote alternative energy in projects, stimulate jobs for the low income earners and partner state governments in the process of housing provision is also laudable. With the new housing policy, the federal government will employ Lagos housing model (Laghoms) by constructing 40 blocks of housing in each state and the Federal Capital Territory (FCT). Each state is expected to provide land of between 5-10 hectares for a start, with title documents. and access roads or in lieu of access roads, a commitment that they will build the access roads by the time the houses are completed. This exercise will lead to potential delivery of 12 flats per block and 480 flats per state, and 17,760 flats nationwide. Human beings, generally by their nature, exhibit multi-territoriality. This means that the beneficiaries are definitely going to be those with one or two houses before. The number of flats to be delivered is also negligible and will not affect the graph of housing demand versus provision in Nigeria. Also, the Shehu Shagari era federal housing experience shows that some states may decide to donate disuse and bad land to make the scheme unpopular considering the adversary between states and federal governments in some areas. Most states are finding it difficult now to cope with infrastructure provision, especially payment of salaries and pension. They may therefore, not be able to provide infrastructures in the estates.

Government has no excuses for abdicating its duty of care for the downtrodden and the vulnerable in Nigeria. Oil subsidy can be eradicated and in its place should be social housing development and agricultural grants. It will go a long way if the governments can declare state of emergency in housing provision in Nigeria and provide minimum of 500,000 houses every year as social housing for the poor in our major cities.

Oyedele, a Housing professional wrote from Osogbo.