Nigeria is estimated to have 11 million houses and faces a housing deficit of about 17 million housing units. The current stock of housing is characterised by shanty-towns, dilapidated houses and unsanitary conditions without basic services like potable water, sanitation, public power supply, healthcare or education.
The key challenge is the lack of affordable housing, with the additional housing need expected to rise to 30 million units by 2043. This is further exacerbated by rapid population growth and urbanisation.
Over the past 3 decades, the urban population has grown at a rate of 5.8 per cent per annum; the urban population comprises over 50 per cent of the total population and is projected to rise to 60 per cent by 2025. Furthermore, there are more than 840 urban centres and eight major cities with a growing population of over one million (Lagos, Kano, Ibadan, Abuja, Port Harcourt, Kaduna, Benin, and Zaria). Eliminating the housing deficit will require the development of an additional one million housing units annually until 2043.
Another challenge within the sector is that most households currently cannot afford adequate housing. 80 per cent of Nigerian households live on a monthly income of less than USD 133. An additional 14 per cent of households earn between USD 133 and USD 267 monthly, and would likely only be able to afford adequate housing through subsidised plans like the National Housing Fund. This suggests that only 6 per cent of the entire population can access the mortgage market or make outright cash purchases of housing units. Provision of social and low income housing is thus crucial to addressing Nigeria’s current housing deficit.
Several attempts have been made to improve the condition of the housing sector in Nigeria, including the National Housing Policy (2002), National Building Code (2010), Vision 2010, and Vision 20: 2020 to mention a few recent examples. These past policy drafts have assessed the housing challenges the nation faces and clearly outlined the need to develop a pragmatic solution to addressing the sector’s primary issues of funding, land access and urban growth.
There is a need for the nation to develop a clear housing philosophy that seeks to ensure affordability for all, regardless of socio-economic status. Achieving affordable housing for all Nigerians will require the development of strong and enduring mortgage institutions with transparent processes and procedures.
Another closely related issue is lack of access to land. In order to adequately address the nation’s social housing issue, the Land Use Act of 1978 should be reviewed. The World Bank has long noted that the majority of the Nigerian populace resides in informal housing structures (with varying degrees of permanence) located on land to which they do not own the rights. The difficulty in acquiring land rights has thus led to the proliferation of informal, impermanent housing and made access to mortgage lending difficult, as a certificate of occupancy and land title are key requirements. The urban housing problem is further complicated by the inefficient land management system which has made it difficult to develop broad-scale tenement housing for urban residents.
Urban and rural areas display different socio-economic and demographic attributes that consequently lead to distinct housing requirements. Over 50 per cent of housing settlements are currently categorised as urban, and there are several cities with a population of 1 million and more. While the majority of housing needs are located in urban areas, the required type of housing varies not only by urban/rural attributes but also cultural and other demographic factors.
The focus of housing development in Nigeria is on the evolution of a housing sector that will make housing finance available to the vast majority of Nigerians and create a land management system that will stimulate rapid and broad-scale housing construction for the population.
Considerable attention and effort is currently being deployed to improve the situation. In November 2012, the President held a special retreat focused on the housing sector. Key areas addressed include improving land titling, making mortgages more affordable and accessible, improving the availability of affordable and low-income housing, and fostering sustainable urban development.
There are also several ongoing projects in the housing sector, with some in the pipeline until 2015. They include:
- creation of the Nigeria Mortgage Refinance Company (NMRC) to develop the mortgage market and provide affordable housing;
- recapitalisation of the Federal Mortgage Bank of Nigeria;
- planning, design, construction and maintenance of 600,000 housing units through PPPs;
- planning, design, construction and maintenance of 240,000 affordable housing units by the Federal Housing Authority (FHA) and other reputable developers; and
- planning, design and construction of other key housing initiatives.