The federal government is planning new investments of 3.53 trillion naira in Nigeria’s housing sector to fill the country’s 17 million housing shortfall.
The investment is to be made over the next four years as part of the government’s strategies to boost housing provision and ensure affordable housing for Nigerians.
These allocations, according to the findings, were made to priority projects in the sector as well as to projects essential to the functioning of the ministries, departments and agencies (MDA) concerned.
Details of the four-year plan are contained in the Federal Government’s National Economic Development Plan recently launched by President Muhammadu Buhari.
The document shows that the 3.53 billion naira investment includes an estimated public investment in urban road development of about 1.6 trillion naira.
Nigeria has experienced rapid but uncontrolled urbanization, which has placed intense pressure on an already stretched housing infrastructure.
Almost 50 percent of Nigerians currently reside in urban areas, which represents almost 100 million people.
Over the years, housing supply constraints and asymmetric information on existing housing policies have kept Nigeria from keeping pace with rapid urbanization.
In addition, the lack of political continuity resulting from political risk and the change of government over the years has stifled government efforts, thus explaining the gap between the availability of affordable housing and the demand due to population growth.
In addition, the sector faces other obstacles such as the constraints of good land administration; weak adherence to real estate market regulations; unhealthy speculation by industry players; low private sector involvement, poor housing database and mapping constraints as well as rising cost of building materials.
These challenges have all contributed to drastically restricting access to land despite the government’s best efforts to reform the mortgage sector.
But the government’s master plan for the sector covering the period 2021-2025 indicated that despite these challenges, growing demand for housing due to rapid urbanization could be used as a significant growth engine.
He pointed out that building affordable housing to fill the gaps will increase the demand for housing finance and boost the liquidity of mortgage finance products.
Massive housing construction will also significantly boost demand for locally made materials to lower construction costs and boost job creation, especially in the construction and manufacturing sectors of the economy, according to the document.
To improve access to affordable housing in Nigeria, the document states that between 500,000 and one million homes will be delivered each year over the next four years.
The document also said the government will improve the links between the housing sector and the economy with a focus on improving urban development across the country.
“To achieve the targets set in the housing sector, the estimated public investment is 3.533 billion naira from 2021 to 2025. This includes an estimated public investment in urban road development of about 1.680 billion naira.
“These allocations were allocated to priority projects in the sector as well as to projects essential to the operation of the MDAs concerned.
“The federal and state governments will make affordable housing construction a priority to fill any housing deficit, reduce slums and create opportunities for sustainable urban regeneration in Nigeria,” the document said.
He further said that ensuring the availability of long-term housing finance to facilitate access to home ownership for all will ultimately improve social inclusion and enable low-income Nigerians to build wealth.
“The achievement of these goals will be supported by an inclusive national housing policy that will fully unleash the socio-economic potential of the housing sector and urban development.
“The operational efficiency of the Federal Mortgage Bank and Family Homes in conjunction with Primary Mortgage Banks and private real estate companies will be a priority,” he added.