Intervention sought to address Nigeria housing problems
From OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – A NUMBER of setbacks such as poor responses from state governments and financial challenges have been identified as scuttling the provision of housing in Nigeria.
According to First Bank of Nigeria (FBN), the housing deficit stands at 17 million units and the estimated cost of bridging this gap is N59,5 trillion.
Industry estimates suggest that about 100 000 new houses are built each year , compared to estimated demand of 700 000 units.
The FGN recently disclosed plans to build 360 houses in three pilot states, develop a “Rent to Own” housing scheme for low-income earners and incorporate a new housing model into the National Building Code.
FBN pointed out there had been delays in project take-off mainly due to poor responses from state governments in providing land for the housing scheme.
“The housing ministry revealed that only seventeen states have been compliant in this regard.”
FBN highlighted another issue slowing down progress is minimal capital expenditure for the sector.
From this year’s budget, only N36 billion has been allocated to housing; this is not sufficient to tackle the housing deficit.
“Partnering with the private sector as well international development bodies is essential to bridge the gap,” FBN added.
To this end, the government has partnered with Shelter Afrique, a pan-African finance institution, focused on real estate development to construct 5 000 housing units.
The initiative is expected to deliver one bedroom apartments at N1m each. Payment structure will be spread over an undisclosed time-frame through a mortgage facility.
According to FBN, industry sources suggest that due to the country’s housing deficit, tenants spend about 60 percent of their disposable income on rent compared with 30 percent recommended by the United Nations.
“Given the current squeeze on consumers’ pockets this has become more difficult for Nigerian nationals and is putting immense strain on the country’s property market,” the bank said in its report on the housing industry on Tuesday.
To address the housing challenges, FBN stated, social intervention initiatives such as mass housing are required.
“Apart from creating shelter, the ripple effect it has through its potential job creation is vast, capable of lifting low-income earners to the middle class.”
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