Social housing and a struggling economy

7 Min Read
Social housing and a struggling economy

In many nations of the world where population grows faster than the economy, the citizens always suffer from social problems arising from pressure on available amenities, including housing.

This is the case in Nigeria where the population is growing while the economy struggles. This is moreso in the last seven years of the President Muhammadu Buhari administration. Little wonder therefore that, in contemporary times, Nigeria is dubbed the capital of global poverty.

The situation in the country has been worsened by growing urbanisation that has necessitated a warning from the United Nations Agency for Settlement (UN-Habitat). This UN body has contended that, unless something is done urgently, about 60 percent of the population will live in the cities by 2050.

Meanwhile, a combination of growing population and fast-paced urbanisation means enormous pressures on urban housing. This is also because the housing stock in the country is just a little above 13 million units and home ownership is just about 25 percent of the country’s estimated 200 million population.

Many Nigerians, particularly those classified as vulnerable and the extreme poor, need housing. But the state of the economy neither supports nor empowers them to have one…

It is clear from the above that many Nigerians are homeless and therefore need somewhere to live. It does not matter much that the government, in what is clearly a flight from reality, argues vigorously that there is no housing deficit in the country. We believe that there is.

Many Nigerians, particularly those classified as vulnerable and the extreme poor, need housing. But the state of the economy neither supports nor empowers them to have one; hence the imperative of social housing development as a solution to their problem.

It is pertinent for us to remind the government that housing is a right. Many local and international conventions guarantee the right of people to social protection that will help to eliminate the worst manifestations of poverty. Even the Nigerian Constitution expressly provides for the social protection of all.

Therefore, it is our view that, without housing, nobody can fully enjoy his/her right to the free development of his/her personality. Adequate public infrastructure provision is a veritable tool of ensuring a sense of belonging of the people and of reducing poverty and crime.


Besides providing shelter and protection, housing infrastructure development can be used to develop an economy. Housing construction generates high level of employment, involves great number of participants, does not accommodate class discrimination and is gender-friendly.

We recognise that attempts have been made by the government to address the housing needs of low-income Nigerians through the establishment of mortgage institutions that offer low interest rates on housing finance. But over time, it has turned out that what the government considers its best is not good enough.

For instance, it is about three decades of the Federal Mortgage Bank of Nigeria (FMBN) and the National Housing Fund (NHF) working collaboratively with the primary mortgage banks (PMBs) to ease access to housing through low interest rate mortgages.

We are bold to say that the activities of these institutions have not changed anything for an average home seeker. Instead, it has become a lot clearer that mortgage loans to buy or build remain a mirage—neither accessible nor affordable even at the 6 percent interest rate that the NHF offers.

When the Nigerian Mortgage Refinance Company (NMRC) and the Family Homes Funds (FHF) came on board, many Nigerians thought that they would change the country’s home-ownership story.

NMRC came as a secondary mortgage institution that is private sector-led but with the public purpose of enabling the delivery of affordable housing by increasing liquidity in the mortgage system and dragging down interest rate on mortgage loans to single digit.

We recall that the company was planned to offer long-term loans at single digit interest rate that is expected to come down to 4-6 percent in the long run. Nigerians were told that, on a yearly basis, 750,000 homes would be added to the available stock, thereby reducing the deficit. That is yet to happen six years after.

On its part, FHF came as the government’s social intervention in the housing sector. With its N1.3 trillion funding, it was expected to deliver 500,000 housing units and in the process create about 1.5 million jobs, all happening within a period of five years.

To date, the funds, which started operations in 2017, has financed the development of about 11,700 homes for low-income earners across several states in Nigeria and has created about 64,000 jobs.

From the above, it is clear to us that the government cannot, through direct involvement, provide housing for Nigerians. We therefore join the call on the government to concentrate on creating the enabling environment for private developers to deliver housing for Nigerians.

Apart from incentives such as tax holidays and free land, we also urge the government to deal with issues such as urban and rural roads, high interest rates, high cost of building materials; Land Use Act, the tortuous judicial system, and high poverty level. All of the foregoing are all obstacles to home-ownership. Consequently, if and when the government is able to neutralise these obstacles, the goal of social housing would have adorned the garb of reality.

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