Homes & Mortgages
Shelter is one of the basic necessities of life, outside food and clothing.
Section 16 (1) (d) of the 1999 Constitution, under the Fundamental Objectives and Directive Principles of State Policy, is categorical on the need for the state to “provide suitable and adequate shelter for all citizens.”
According to the UN-Habitat and the World Bank, over 70% of Nigerians are living in slum-like conditions. Estimating Nigeria’s population at 173 million suggests that collectively about 125 million are living in inadequate housing conditions. McKinsey & Company, along with the World Bank has put the housing shortage in Nigeria on a red alert.
Nigeria’s deficit of 17
million housing units has kept a majority of her citizens in deep anguish and exposed to disease-infested slums. It has bred crime, a decadent society, industrial stagnation, unemployment, countless deaths and indeed much suffering in the society. Many families, women and children, live in slums and others pay exorbitant house rents, suffer ejection, demolition and homelessness.
Marriages and families have been broken because of Nigeria’s housing deficit, caused principally by the nation’s low mortgage development. Something revolutionary has to be done.
Immediate past Minister of Lands, Housing & Urban Development, Mrs Akon Eyakenyi told participants at the World Bank/IFC 6th Global Housing Finance conference in Washington DC, United States of America, that Nigeria currently requires at least one million housing units per annum to effectively address the housing demands of the population. She put the unit cost of each of the houses at US$10,000, adding that the housing deficit would be eliminated by 2043, if this is done.
Mortgage
Housing finance or Mortgage is the root of housing development. Aside from land, it is the most important requirement for a virile housing sector. Unlike land which is in abundance in Nigeria (though mainly untitled) housing finance is very scarce and virtually inexistent. This is the greatest contributory factor to Nigeria’s debilitating housing shortage.
Since the ability of banks to deliver mortgage services is limited by the fact that 80 per cent of all bank deposits are for 30 days only, there is need in ensuring greater access to finance for tenors of 20 years – 30 years to help accelerate homeownership among all income levels in Nigeria.
Only a few Nigerians can afford mortgages at prevailing commercial rates which in most cases could triple the amount taken as loan in 15 years. Besides, luxury development shouldn’t be the core of housing delivery, which appears to be an effect generated by the existing mortgage system. Like the project it is financing, mortgage should be long-term and of a single digit.
Making home ownership an accessible dream for a majority of Nigerians, including low-income Nigerians will impact positively on the economy, and would lead to the increased contribution of housing to the GDP from the current paltry 3.1 per cent of the rebased GDP to the high teens of emerging and developed economies such as Malaysia and the United States of America.
It will lead to more jobs being created and to greater economic inclusion. Unlocking the housing sector will mean the creation of millions of jobs for architects, builders, plumbers, welders, electricians, painters, tillers, carpenters, aluminium workers, masons and many other artisans. It will also lead to a massive growth in capacity utilisation in all building materials manufacturing companies, effectively tackling youth joblessness, crime and the ever-growing graduate unemployment.
There is a critical need to unleash revolutionary thinking and practices that will lead to the evolution of a well funded, vibrant mortgage culture to boost home-ownership among Nigerians of all income levels.
Some stakeholders say something in that direction is on the way. Keep a date with this column for details.
