Housing Issues in Nigeria
It is important to note that people have three basic needs: food, clothes, and a place to live. Housing is one of the best ways to tell how someone lives and where they stand in society. Like clothing and food, housing is one of the three most important things people need. It is very important for everyone’s well-being that it is available. One way to figure out how healthy a country is to look at how well its housing market is doing. In many economies, growth has been driven by housing markets and the building of new homes. The housing market has usually led the way for the economy to get better after a depression. Creating employment, particularly for unskilled labour, housing development has played a significant role in the urban economies of developing nations. Both the construction and home building industries have served as a “gateway” to urban labour markets (Moore, 2019). The funding of housing project, like many other development difficulties confronting Nigeria and other African nations, is particularly difficult. This is primarily owing to the absence of sufficient circumstances or resources to support such financing. To the point of fact, the Finance sector which is responsible for funding housing projects in Africa is vulnerable to several dangers (Okpala, 1985). In developing countries (especially Nigeria), housing is a major issue. Urban housing shortages are worse than rural shortages. Nigerians value home ownership. Houses give refuge and assess social status and respect. Despite the importance of homes and property, barely 10% of individuals who want one can afford to buy or build one.
Indeed, Nigeria has a major housing shortage. According to the Federal Mortgage Bank, there is a deficit of at least 28 million housing units. While the deficit cannot be addressed within an administration’s tenure, a deliberate effort to reduce it is certainly essential. This would include establishing links between the distribution of land to property developers, the greater availability of housing finance, the decrease of property transaction costs, and the development of jobs in industries related to the provision of extra housing stock. Nigeria’s real estate market is thriving, but so is the demand for housing in Africa’s most populous country. The Central Bank of Nigeria estimates that the nation now lacks more than 22 million housing units (Obiezu, 2022). Through forward linkages to financial markets and backward links to the furniture, building materials, land, and labor markets, the construction and housing has what it takes to have a considerable multiplier effect on the overall economy of any country if properly managed. Nigeria is expected to have a housing shortage of over 17 million units by 2015, and it’s estimated that it will need about 59.5 trillion Naira to fill the gap. The biggest issue facing the housing sector right now is limited access to financing, which needs an immediate fix. Important players in the Nigerian housing market include Property Developers, the Federal Ministry of Lands, Housing, and Urban Development, the Central Bank of Nigeria, Financial Institutions, and the Securities and Exchange Commission of Nigeria. All state lands are owned by the governor, who holds them in trust, according to the Land Use Act. The Governor is authorized by law to revoke land titles for public use. Since the Land Use Act was passed, the fight between statutory and customary landowners has slowed the construction of the Governor’s vast discretionary powers. Massive amounts of land are often acquired by the government, whether for public projects or not. This aspect raises questions about whether the government is favouring the interests of private and corporate investors in real estate development projects. Legislators and courts have an obligation to society to establish the Governor’s powers and the enforceable rights of persons with various land interests. Especially in most urban areas, the bureaucracy involved with land acquisition and title perfection pose considerable obstacles to effective housing delivery. Cost, availability, and convenience of acquisition are issues with land accessibility. For instance, getting a certificate of occupancy can take anywhere between two and five years, and registering a mortgage is thought to cost about 19% of the property’s worth.
In other nations, mortgage interest rates range from 3% to 5%, but in Nigeria, they range from 16% to 24% (with the exception of the Federal Mortgage Bank, which lends for less than 10%). Due to high interest rates charged by banks and other lenders, individuals with middle and low incomes are less likely to qualify for mortgage loans. Commonly, commercial banks disguise commercial loans as mortgages, which typically have higher interest rates and a maximum term of two (2) years. Because of this, Nigerians prefer to pay for housing projects with their own savings, money from the sale of their old homes, money from monthly contribution groups, money from the government for public housing, etc. Few people are aware of mortgage facilities, their benefits, and the services they provide. As a result of their monthly contributions to the National Housing Trust Fund, the majority of mortgages are obtained by civil servants and those with steady employment. Rural residents are less likely to consider obtaining a mortgage than their urban counterparts, according to data from all 36 states and the District of Columbia. This is because people in rural areas are unaware of these services and do not earn enough money to cover their costs.
One thing that makes it hard to find housing in Nigeria is that local building materials aren’t accepted and there isn’t enough money for research into local building materials. This makes people less likely to try new things and makes it hard for local businesses in Nigeria to compete with foreign companies. Building materials and parts must be imported, which makes them very expensive because of the value of the Naira and inflation around the world (Ayedun & Oluwatobi, 2011). Because most people in the country don’t make much money, building materials are out of their price range. It’s a shame that traditional alternative building materials like burnt or/and vibrated bricks and roof/ceiling tiles, which are made in the country, haven’t caught on with average Nigerians and haven’t become popular because their production costs aren’t low enough because of problems with technology and economies of scale (Ayedun & Oluwatobi, 2011).
Recommendation
With an estimated 68% of Nigeria’s population living in rural areas, there is a clear need for the creation of models to facilitate the extension of mortgage arrangements and the dissemination of information to these areas. The lesson here is the necessity of a current digital register for capturing and processing accurate title applications. Effective property rights require a comprehensive and accurate system of land registration. In this regard, it is proposed that mortgage lenders adhere to a uniform set of standards for mortgage transactions. Rather than the legislative branch of government, interest groups in the investing and consuming communities can state this. To solve the problem of how expensive building materials are, research should be done to improve the quality of locally available building materials so that they can be used to make houses that are cheap, look good, and last for a long time. The cost of housing will go down a lot because of these better local materials. People in the housing industry of the country’s economy need extensive training and retraining. The government should make it a priority to reopen all shuttered vocational and technical colleges and perhaps create new ones to meet the demand for trained workers in this sector.
References
Ayedun, C., & Oluwatobi, A. (2011). Issues and challenges militating against the sustainability of affordable housing provision in Nigeria. Business Management Dynamics, 1(4), 1-8.
Moore, E. (2019). Addressing housing deficit in Nigeria: Issues, challenges and prospects. Economic and Financial Review, 57(4), 201-222.
Obiezu, T. (2022). Millions in Nigeria struggle for affordable housing amid real estate boom. Retrieved 7th September, 2022, from https://www.voanews.com/a/millions-in-nigeria -struggle-for-affordable-housing-amid-real-estate-boom-/6458742.html
Okpala, D. C. I. (1985). Housing Tenure in Nigeria Housing Policy, of Need for Rethinking of Current Emphasis. Publication of Nigerian Association of Housing Corporation, 2(1).
Onoji, E. (2017). The Nigeria Housing deficit: which way forward. Primera Africa legal. Retrieved 7th September 2022, from https://primeraal.com/news/the-nigeria-housing-deficit -which-way- forward/
