The National Housing Fund (NHF), the Federal Mortgage Bank of Nigeria (FMBN) and other institutions that are primarily involved in providing finance in the housing industry are structured to support salary earners.
Those were the words of the Managing Director/Chief Executive Officer, UPDC, Mr Odunayo Ojo, during his presentation at PEWAN conference in Lagos
The UPDC’s boss blamed lack of access to affordable housing by most Nigerians on inadequate access to finance, among other factors.
The structures of NHF and FMBN, he said, have made it difficult to predict the cashflow of people in the informal sector.
The people in the informal sector, he said, were huge and non-salary earners without a consistent or regular source of income.
Without knowing their cash flow, he said it became very difficult to know the type of financing that is available for them and the way the NHF is structured.
He said: “There is still inadequate access to finance and if you look at the way the NHF, the Federal Mortgage and other institutions that are primarily involved in providing finance in the housing industry are structured, most of them are structured to support salary earners, whereas the informal sectors are huge and non-salary earners, for instance, the woman selling on the street, tailors and film sellers, among others. They do not have a consistent or regular source of income and without that it becomes very difficult to predict their cash flow,”
The UPDC boss said there was a need to look at alternative system of financing for them, like cooperative and collective financing.
He called on the government to improve the income of workers as well as increase collaboration between government and Private Public Partnership (PPP) in order to enhance the provision, accessibility and affordability of housing in the country.
Making this submission in his presentation during PEWAN 2024 conference entitled: Resolving the Financial and Regulatory Dilemma to Achieve Renewed Hope Agenda in Housing in Lagos, the UPDC’s managing director pointed out that with the minimum wage of N70,000 coupled with the nation’s mortgage system and the cost of construction, it would take many years and many interventions, including subsidy for anyone earning the minimum wage in Nigeria to acquire a house
Low level of income, he said has made it very difficult for housing to be affordable among Nigerians.
“Majority of Nigerians cannot afford housing even with all the interventions because everywhere in the world, there is no affordable cement, affordable reinforcement, affordable infrastructure and even affordable land. Trying to buy land in any urban area in Nigeria even with the intervention of government, it is not cheap,” he said.
He stated that Nigeria has about 20 million housing deficit and will need to build 900,000 housing units every year to bridge the gap.
On key issues that will make housing more affordable he listed cheap land’s allocation, cheap alternative local building materials, government’s support in the area of infrastructure’s expansion, low cost of borrowing and eradication of multiple taxation, among others.
“We need the support of state and federal governments to be able to expand what they are doing in infrastructure development to make the cost of land acquisition lower.
We all know about the high cost of building materials and the need for us to find alternative to importation of these materials. With the devaluation of the Naira and high cost of logistics, it is not sustainable to import most of our building materials. So we should begin to look at alternatives that are sourced locally to avoid foreign exchange and also bring construction cost lower.
With the advent of rail lines in Nigeria, he said it became easier to go to areas where land might be cheaper.
“It becomes easier for people to live in those rural places and work in the urban centres. As that continues, you will see the high cost of housing reduced,” he said
He appealed to state government and agencies involved in land administration in most states to realize that lack of access to cheap land for housing provision is a social problem.
According to the UPDC boss, there was a need for cooperation between various sectors as well as collaboration in area such as Private Public Partnership (PPP) and other sectors.
He urged government to try and waive some of its charges and levies in order for people to be able to gain access to affordable housing in Nigeria.
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