Nigeria’s housing deficit time-bomb

Nigeria is sitting on a precipitous housing deficit that may soon make life very uncomfortable for its rulers. Ike Ekweremadu, the Methuselah of Nigeria’s National Assembly, languishes in British jail because the young man in the kidney transplant saga drew the sympathy of British police by invoking Nigeria’s seething housing deficit.

He told the police he was homeless in Lagos and the London Police fell for it.

Because Nigerian rulers have no respect for data preservation for national planning, no one knows precisely the magnitude of Nigeria’s housing deficit.

One source contends that Nigeria is simmering with a housing deficit of 13 million units. Babatunde Raji Fashola, Nigeria’s minister of works and housing dismisses the figure with a wave of the hand, even as he cannot convince anyone that the problem is not as calamitous. Ironically, everyone including Fashola knows that millions of Nigerians are homeless.

Ugochukwu Chime, the immediate past president of the Real Estate Developers Association of Nigeria (REDAN), the umbrella body of Nigeria’s real estate developers gave the simmering crisis a fresh stimulus last week.

Chime contended that Nigeria’s housing deficit now stands menacing at 20 million units. Chime’s housing deficit figure cannot be dismissed with a wave of the hand.

Nigeria manufactures six extremely poor people every second. One credible source put the number of Nigerians in extreme poverty at 122 million. At least 100 million of them are homeless besides being plagued by famine.

Chime illustrated his figure on Nigeria’s alarming housing deficit with claims that the real estate sector accounts for a scant five per cent of gross domestic product (GDP) when the sector accounts for 30 per cent of South Africa’s GDP.

He further stressed that the sector contributes 70 per cent of the GDP in the U.S. and Britain.

Chime blamed Nigeria’s acute housing crisis on poor regulation by government. He argued that pure water (sachet water) which is hawked all over Nigeria is more regulated than the real estate sector.

He lamented that unregistered sachet water plants are instantly shut down by the National Agency for Food, Drug Administration and Control (NAFDAC), whereas the real estate business is an all-comers affair. No one regulates it.

Nigeria’s housing deficit is obviously worsened by the dearth of mortgage facilities in the country. With the mortgage industry in disarray, Nigerians are left to build their houses with laborious savings.

Those who cannot muster the bulk fund die as tenants. In developed economies, no one builds his own house. The real estate developers build houses for sale to members of the public.

Individuals obtain loans from mortgage firms and buy houses from developers. The loans are long term loans that are paid back over a period of 15 to 20 years.

Any Nigerian determined to own a house must wade through the torment of land speculators and touts in the process of land acquisition, endure the exploitation of corrupt government officials in a desperate bid to obtain approved plan for their buildings and finally go through the torment of dubious builders.

Many have lost their money to dubious land speculators and touts. Some even lost their lives. Others lost money to fraudulent builders who exaggerate the cost of materials and labour.

Governments’ attempts to provide accommodation for low income earners through the building of low cost housing estates have often been frustrated by top government officials themselves.

Many of the low income houses built by government are bought by top government officials and their rich accomplices in the private sector and rented out to the poor at exorbitant rates.

Corruption is primarily at the root of the simmering housing deficit crisis plaguing Nigeria. The skewed income distribution system that puts most of the nation’s enormous wealth in the hands of an infinitesimal minority in the ruling class has deliberately impoverished Nigeria’s inconsequential majority exposing millions to famine and homelessness.

Corrupt politicians and top civil servants steal public funds to build villas they do not need. In Abuja and practically every part of Nigeria, there are thousands of unoccupied posh houses built with billions stolen from public funds. Some of such houses built for tenants carry repulsively high rent that no one with honest income can afford.

Consequently, the houses remain empty for years while millions remain homeless.

Nigeria’s mortgage industry is deep in financial asphyxiation. It lacks the capacity to advance loans that could be paid back even in five years. Many of the firms in the industry are so deep in distress that their operating licenses had to be withdrawn by the Central Bank of Nigeria (CBN).

The federal government can tackle housing deficit by empowering the mortgage industry to fund long term housing loans that would enable Nigerians own their houses. The industry needs adequate long-term funds to be able to advance long-term mortgage loans to prospective house owners.

Besides, the culture of individuals personally building their own houses must be discouraged. The real estate industry must be adequately regulated by the government to enable it build houses and sell to individuals.

Right now some real estate developers are prone to building houses with low quality materials after an agreement with a landowner for the developer to build, operate and hand over.

The developers often hand over properties that cannot stand the test of time. Land owners are always the losers. Many of the collapsed buildings in recent time could be traced to developers who compromised standards by using low quality materials to cut corners and hand over collapsing buildings to landowners.

Regulatory lapses are responsible for the deplorable development. Adequate regulation and monitoring will save the landowners from the merciless grip of dubious developers.

That is the only way to free Nigerians from the merciless grip of land speculators and quack builders. The real estate developers know how to handle land acquisition and the cumbersome and expensive process of obtaining approval for building plans.

Many Nigerians are frustrated out of developing their properties by the expensive and troublesome process of land acquisition and obtaining approval for building plans. The cost of obtaining approval for a plan for a duplex in Lagos could be as high as N2 million.

Real estate developers are better equipped to handle the hassles, build and sell to willing buyers who would be happy to pay without having to face the risk of being swindled by land speculators, touts and quack builders.

Besides, Nigeria can tackle its seething unemployment problem by investing in real estate development. Government can create millions of jobs if it builds 500, 000 units of houses yearly.

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