Housing is one of the most basic of human needs. Provision of houses through the creation of
mortgages is taken for granted in developed countries; however, it remains a major challenge in
developing countries, especially in sub-Saharan Africa.
All governments in Nigeria since independence highlighted housing as a major priority.
Unfortunately for over 47 years of its independence, Nigeria is yet to develop a vibrant mortgage
market and houses continue to be provided through the tortuous traditional method of buying land
and building over some years, which could be an individual’s entire life time. In many cases such
buildings are left uncompleted or individuals have to deplete their entire life savings in order to
build a home.
One of the major housing policy initiatives was the Policy on Affordable Housing that was initiated
in 1979 by the Shehu Shagari Administration. The policy though laudable was unable to meet the
nation’s housing needs because it was based on the unsustainable tenet that houses will be
provided by government (this remains the anomaly that we must resolve). The implementation of
the 2002 housing policy reforms was a promising beginning, but a lot remains to be done.
In a recent news report on the Nigerian Housing Sector aired on African Independent Television
(AIT), it was stated that between 1973 and 2006, the Federal Housing Authority (FHA) built only
30,000 housing units nationwide. According to Mr. Tunde Ipinmosho of the Federal Housing
Authority (FHA), the current housing deficit is about 12 million homes. If we take the current
population of 140 million Nigerians as reported by the National Population Commission after last
year’s census exercise and assume 30 percent of the population as working adults we have 42
million estimated working adults; assuming about 45 percent or 18.9 million of the working adults
qualify for mortgage loans, and assume an average house final selling price at about Naira 2.8
million for a 2-bedroom flat, the possible size of the mortgage market is close to Naira 53 trillion.
Looking at the statistics we see that there are tremendous opportunities in the Nigerian housing
sector waiting to be tapped. We should note that the government alone cannot fill the housing gap.
In order to fill the gap we would have to leverage on the resources available in the private sector,
while also encouraging foreign investment (in short government has no business building houses).
Government (federal and the sub-national governments) should focus on providing a favourable
investment climate, infrastructure, and mortgage insurance to first time home buyers and low-to
middle income families. We must however, note that there are challenges to harnessing the huge
potentials inherent in Nigeria’s housing sector, and invariably providing affordable housing in
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