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Nigeria: How to make 300,000-unit housing scheme succeed

Posted by OneAfrica Properties on August 3, 2020

Following the National Economic Council (NEC) approval of the construction of 300,000 mass housing units in all the states of the federation and the Federal Capital Territory (FCT), major players in the built environment have submitted proposal on how to make the scheme successful.

The scheme is part of the Nigeria Economic Sustainability Plan by the Vice President Yemi Osinbajo-led Economic Sustainability Committee, estimated to cost N317 billion and create 1.8 million jobs as well as provide at least 1.5 million homes for Nigerian families.

The project, involves building 10,840 units of low, medium and high income units across the six geopolitical zones, backed by mortgage and another 12,008 houses under the public building and housing development Programme.

The Federal Ministry of Works and Housing, will implement it, with Federal Mortgage Bank of Nigeria (FMBN) and Federal Housing Authority (FHA).

In their varied opinions, the organisations – Association of Housing Corporations of Nigeria (AHCN), Real Estate Developers Association (REDAN) and NISH Affordable Housing Limited welcome the development. In their position, AHCN president, Dr. Victor Onukwugha said, saddling the ministry to execute these proposed houses as enumerated in the plan is unnecessary.

“FHA should be saddled with this task at the federal level and because of the enormous plan to deliver these housing units in all the states, the inclusion of the state housing agencies is inevitable to complement the efforts.

“Most of these state housing agencies, already have lands allocated to them for housing delivery, which can easily be used immediately for this proposal. Involving state housing agencies in the plan will hasten the speed of delivery within the stipulated time frame,” Onukwugha said.

According to him, “these corporations have lands in all their local governments which will assist in getting lands for the execution of the project at the local government levels. Apart from the above factor, it is easier for state housing agencies to get land allocation from their governors for mass housing than the federal government calling for such allocation.”

The corporation noted that with the current population of over 140 million Nigerians and the increasing high cost of living, social housing is inevitable. “With the present situation in the housing sector, it is obvious that the private-sector driven participation in mass housing construction that will reduce housing deficit cannot solve the social housing problem neither is the direct intervention of the ministry an option.

“From the experience of private-driven housing scheme, it is obvious that affordable low cost housing is not attractive to private developers because of the low yield from such investment. It is only state housing agencies that are positioned to bear this low yield from social housing.”

The Chairman, REDAN Board of trustees, Prince Oluseyi Lufadeju told The Guardian that implementation of the programme should ensure proper coordination of efforts by all concerned stakeholders, both public, private and informal sectors.

“The planning, designs, funding, locations, supervision and management should be carefully crafted for the success of the programme. It is an opportunity to have an integrated development agenda for housing development in the country,” he said.

The Managing Director, NISH Affordable Housing Limited, Yemi Adelakun, said, government must prioritize easy and adequate access to single digit mortgages from commercial and mortgage banks so as to create effective demand for the houses before embarking on construction of the houses.

“These mortgages once approved can then be consolidated and secured towards construction using appropriate financial instruments like bankable off-takers guarantees and advance payment guarantees. This suggested approach requires special intervention of the Federal Government and Central Bank of Nigeria.

Adelakun also suggested that government should allow and empower FHA to coordinate supply directly and through the support of private developers with proven technical and financial capacity to deliver quality and cost effectiveness on a large-scale. “FHA is better placed if properly managed to deliver affordable housing.

He called for the recapitalization of housing finance institutions such as FMBN and Family Homes Fund) with the mandate to concentrate mainly on off-takers finance and not engage in housing supply or construction finance.

Source: Guardian NG

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