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Wednesday, 27 October 2010

30,000 houses for 12 million Nigerians

A great article I found online at: The Nigerian US Embassy (in Abuja 2007) website gave me some nice insight into challenges of housing in Nigeria for most consumers.

It is not that there isn't housing in Nigeria, many Nigerian Property sites will have you believe that there is plenty of choice - and there is - if you have the money.

With a country which 'boasts' of stats such as 80% of its population living in poverty, it isn't unreasonable to claim that the average person could probably not afford any of the vast number of houses which are being frequently built in desirable locations such as Lekki, VI, Abuja and so forth.

The article begins with its first example of an introduction into the serious topic, by reminding us of the Affordable Houses policy which was initiated by Shehu Shagari in 1979, which had an aim to "meet the
nation’s housing needs", but was unable to do so because the provider of these houes - the government - simply did not come through.

Then afterwards, the 2002 Housing Policy reforms which actually accomplished some things, notably the 30,000 houses it has been reputed to have provided between 1973 and 2006 (33 years), however when you read further, you are met with the figure that there is in fact a real need for 12 million houses for Nigerians, and that 30,000 may be a fantastic figure, it doesn't really compare. This is approximately 909 houses per year.

Now, I am not critcising for criticising's sake - there is a point to be made.

Reading further in the article you find that :

"If we take the current population of 140 million Nigerians as reported by the National Population Commission after lastnyear's census exercise and assume 30 percent of the population as working adults we have 42 million estimated working adults; assuming about 45 percent or 18.9 million of the working adults
qualify for mortgage loans, and assume an average house final selling price at about Naira 2.8
million for a 2-bedroom flat, the possible size of the mortgage market is close to Naira 53 trillion.
Looking at the statistics we see that there are tremendous opportunities in the Nigerian housing
sector waiting to be tapped."

The article goes further to highlight the potential for the housing market for not just the government but more so individuals, and those who fall within the private sector.

Those who specialise in property development will find a way of acquiring investments therefore bringing forth a yield towards this market in the country.

Of course the system in which will allow people to develop properties, obtain land and legal rights and such will also need to be able to handle this 'potential for development', and that is where the state government needs to bring in their legislation to support this growth. Also, the system for mortgage acquirement will also need to be ammended to really acknowledge those who are at the lower end, those who may lie towards the  lower income line to obtain help from financial institutions such as banks, and to be able to acquire some rights to their very own property.

As mentioned by Ajibola Akeju in the mentioned article, the main points of consideration include:

1. Legislation
2. Registering Property
3. Risk Sharing
4. Absence of a National Credit Database
5. Stable Macroeconomic Environment
6. Knowledge Gap
7. Dealing with Licenses 
8. Taxes
9. Enforcing Contracts
10. High Cost of Building Materials
11. Infrastructure

More details can be read about these points at the original article location at:





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