INTRODUCTION

While decent housing is important to every individual and nation, housing crisis remains one of the global problems and a grave and rising challenge facing both urban and rural residents, particularly in most developing countries. Thus, in spite of a number of political, social, and religious initiatives taken in the past in some of these developing countries, a great proportion of their population still live in substandard and poor houses and in deplorable, unsanitary residential environment. In Nigeria, though housing provision by the government commenced before the country got her political independence from Great Britain on October 1, 1960, the housing problem in Nigeria still remains intractable as many rural and urban populations in the country do not have access to decent, safe, and affordable housing. This paper attempts to show an overview of the affordable housing delivery strategy taken by government and private enterprises in Nigeria over the years, revealing that Nigerias impressive housing policies and programs are rarely implemented or haphazardly implemented. The housing delivery strategy in the country is, therefore, a classical example of politics of many words, but little action. The paper suggests that urgent steps need to be taken to bring about the much needed improvement and transformation in the Nigerian housing sector. It also advises the government to back up its many lofty initiatives and efforts with necessary political will and commitment, using cooperatives, development agents, and partnerships through Public Private Sector Participation (PPP).

STATEMENT OF THE PROBLEM

Housing (adequate shelter) is recognized world-wide as one of the basic necessities of life and a pre-requisite to survival of man (Onibokun, 1983; United Nations, 1992; Salau, 1990). A house is a place in which it provides shelter, refuge, scomfort, security, and dignity. The housing industry can be a stimulus to national economy (Onibokun, 1983). A house also provides the physical framework in which human, social, economic, and cultural resources are realized, enriched, and integrated. In the traditional African setting, in particular, housing is, in fact, one of the greatly cherished material properties. This is because of the other functions that a house performs in the traditional society includes the protection of family cohesion and values, taking care of the aged through the extended family system, and the protection of the ancestral values, among others. Thus, the importance of providing adequate housing in any country cannot be overemphasized. However, in spite of the fundamental role of housing in the life of every individual and the nation, and in spite of the United Nations realization of the need to globally attain adequate shelter for all, the housing crisis remains one of the Journal of Sustainable Development in Africa (Volume 12, No.6, 2010)ISSN: 1520-5509 Clarion University of Pennsylvania, Clarion, Pennsylvania global problems and a grave and rising challenge facing both urban and rural residents, particularly in most developing countries. It is generally estimated that the world needs to house an additional 68 million to 80 million people (Awake,2005). According to the United Nations Population Fund (Wikipedia, 2003), world population passed 6.1 billion in 2001 and it is expected to reach between 7.9 and 10.9 billion by 2050. Over 90% of the growth during the next two decades is forecast to occur in the developing countries. Those estimates represent a formidable housing challenge. The situation even becomes more serious and worrisome when one realizes the fact that despite a number of political,

social, and religious initiatives taken in the past in some of these developing countries, a large proportion of their population still lives in sub-standard and poor housing and in deplorable and unsanitary residential environments. This is particularly so in Nigeria, where housing provision by government commenced before political independence in 1960 and where, despite various government interventions and huge investments in housing provision, the housing problem in the country still remains intractable as many rural and urban populations in Nigeria do not have access to decent, safe and affordable housing. This, according to Onibokun(1990), is as a result of the inability of government to provide housing to the populace. The level of production of housing in a developing country like Nigeria is only 2 dwelling units per thousand people, compared to the required rate of about 8-10 dwelling units per 1,000 population as recommended by the United Nations(Anthonio, 2002). It is against this backdrop that this paper attempts an overview of government housing delivery strategies in Nigeria over the years with a view to identify corrective measures that are needed to better the shelter and living conditions of the generality of Nigerians. The paper is structured into four parts. Following this introduction, section two focuses on the need for affordable housing, then characteristics of the Nigerian housing scene, while section three gives a detailed review of successive government and private interventions in housing.

Need for affordable Housing

The United Nations estimates that Nigerias population in 2005 stands at 141 million, and predicted that it would reach 289 million by 2050 (Encarta, 2007). The United States Census Bureau projects that population of Nigeria will reach 264 million by 2050. Nigeria will then be the 8th most populous country in the world (Encarta, 2007). Rapid growth in population creates demand pressure towards shelter and efficient supply and distribution of basic utilities and services for the city dwellers, In most of our urban centre the problem of housing is not only restricted to quantity but to the poor quality of available housing units. The effect which is manifested in overcrowding in houses. Nigeria is perhaps the fastest urbanizing country in the African continent. One of the most important challenges facing the country is the provision of affordable housing. As more and more Nigerians make towns and cities their homes, the resulting social, economic, environmental and political challenges need to be urgently addressed (Raji, 2008). A recent study of housing situation in Nigeria put existing housing stock at 23 per 1000 inhabitant. Housing deficit is put at 15 million houses (Mabogunje 2007) while N12 trillion will be required to finance the deficit. This is about 4 times the annual national budget of Nigeria (FHA, 2007). Home prices and rents, on the other hand, have grown ahead of general inflation. Making matters worse, the composition of homes for sale and rent on the market has been inexorably shifting towards very expensive home (Nubi, 2008).

The National Rolling Plan of 1990 92 estimated housing deficit at 4.8 million. The 1991 housing policy estimated that 700,000 housing units are to be built each year if housing deficit is to be cancelled. The documents indicated that not less than 60% of the new houses are to be built in urban centre. In 2006, the ministry of Housing and Urban Development declared that the country needs about 10 million housing units before all Nigerians can be sheltered. Between 1975 and 1980, there were plans of deliver 202,000 housing units to the public but only 28,500 units, representing 14.1% was achieved. Also, out of 200,000 housing units planned to be delivered between 1981 and 1985, only 47,200 (23.6%) was constructed. Under the National Housing Fund (NHF) programme initiated in 1994, to produce 121,000 housing units, it was believed that less than 5% was achieved. In spite of a series of government policies towards housing delivery, one thing that is clear is that; there exist a gap between housing supply and demand (Olomolaiye, 1999; Agbola, 1998; Adegeye and Ditto, 1985). Historically, Housing unit is treated as product hence the need for quality if it is to pair well and perform desirably in the market, but quality in construction industry suffers significant difficulty as it passes through extreme pressure driven by cost minimization rather than value maximization. Research has shown that 75% of urban housing is situated in slum conditions (UNDN,1988), and indeed the quality of the housing is poor and clearly an affront to human dignity (Olotuah, 1997; Agbola and Olatubara, 2003). As part of effort to increasing qualitative housing for the masses in the country, the Federal Government in 2004 pledged to adequately fund research pertaining to the manufacture and the use of local materials in the sector with the aim of providing 40,000 houses and at least 1,000 per state before year 2007. Housing delivery in Nigeria is provided by either the Government or Private sector, but despite Federal Government access to factors of housing production, the country could at best expect 4.2% of the annual requirement. Substantial

contribution is expected from other public and private sectors. It should be acknowledged that private sector developers account for most of urban housing (FOS, 1983). The production of housing in Nigeria is primarily the function of the private market; approximately 90% of urban housing is produced by private developers. Due to housing demand created by rural- urban migration, which account for 65% of urban population growth, the fixed supply of urban land, and inflation of rental and housing ownership cost (taylor, 2000). Unfortunately, the private sector is saddled with numerous problems which make supply always fall far short of demand and lower production quality (Nubi, 2008). The problem of qualitative housing has been a concern for both the government and individuals. Appreciating these problems, both public and private sector developers make effort through various activities to bridge the gap between housing supply and demand, but the cost of building materials, deficiency of housing finance arrangement, stringent loan conditions from mortgage banks, government policies amongst other problems have affecting housing delivery significantly in Nigeria ( Raji, 2008). With different Policies and user solutions that are abound for the purpose of reducing quantitative housing deficiency. It could be possible to solve the problem if housing were used only for shelter needs. However, in addition to serving as a shelter, housing is also a produced commodity, consumer good, assurance for families, means used for reproducing social relations and an investment tool protecting the value of money against inflation. Moreover, it is important that house is a building block in its relations with its environment, mutual interaction and increasing the quality of its environment when it is considered as a part of the city. In this context, it can be accepted that a large housing stock is available today as a result of new presentation forms and production processes with a high volume of housing production. However, the existence of this stock shows that the housing policies are planned depending mostly on production.

CHARACTERISTICS OF THE NIGERIAN HOUSING SCENE

The ever mounting crisis in the housing sector of the developing world has various dimensions, which range from absolute housing units shortages, to the emergence and proliferation of the slums/squatter settlements, the rising cost of housing rent, and the growing inability of the average citizen to own their own houses or procure decent accommodation of their taste in the housing market. In Nigeria, even though there are no accurate data on the nations housing stock, earlier studies and observations strongly suggest quantitative and qualitative housing problems across the country (Onibokun, 1983; Abumere, 1987; Federal Office of Statistics., 1997; Agbola, 1998; Egunjobi, 1999; Adeagbo, 1997; Olatubara, 2008; Mabogunje 2003; Ademiluyi& Raji, 2008). Thus, while Fadahunsi (1985) observed that policymakers in Nigeria are not really aware of the magnitude of the housing problems facing the low income earners in the country, Olateju (1990) was of the view that the increasing high rent is a pointer to the fact that there is a decrease in housing stock. A study by Onibokun (1990) estimated that the nations housing needs for 1990 to be 8,413,980; 7,770,005 and 7,624,230 units for the high, medium, and low income groups, respectively. The same study projected the year 2000 needs to be 14,372,900; 13,273,291 and 12,419,068, while the estimates for the year 2020 stands at 39,989,286;33,570,900; and 28,548,633 housing units for high, medium and low income groups, respectively (Agbola, 1998;Olokesusi & Okunfulure, 2000), Again, the national rolling plan from 1990 to 1992 estimated the housing deficit to increase between 4.8 million to 5.9 million by 2000 The 1991 housing policy estimated that 700,000 housing units needed to be built each year if the housing deficit was to be cancelled. The document, in fact, indicated that no fewer than 60 percent of new housing units were to be built in the urban centers (Ogu & Ogbuozobe,

2001; Federal Republic Nigeria, 1991). This figure had increased at the time the 1991 housing policy was being reviewed in 2002. In 2006, the Minister of Housing and Urban Development declared that the country needed about ten million housing units before all Nigerians could be sheltered. Another estimate in 2007 by the president put the national housing deficit at between 8 and 10 million (Yaradua, 2007). Despite this confusion as to the number of new additions, it has been quite obvious that a critical gap exists between the housing supply and demand; the reasons why successive governments have made policy statements, enunciated, and have made efforts to actually deliver new housing units. However, out of their targeted provision, a very minute percentage is always met. This could be attributed to the fact that most government housing programs have been frustrated by corruption, politicization, insufficiency of technical staff at building sites, and lack of infrastructure (Olokesusi & Okunfulure, 2000). Housing conditions, especially those portrayed by the availability and efficiency of facilities and utilities, have been worsening since 1980 (Olokesusi & Okunfulure, 2000). Toilet facilities, for instance, have more pit constructions than other better and more ideal provisions. This is evident from the construction quota, which increased from 25.6 percent in 1980/81 to 63.3 percent in 1993/94 and 62 percent in 1995/96. Existing data shows that while 72.4% of urban households were connected to electricity in 1980/81, this proportion declined to 54.34% in 1995/96 (Federal Office of Statistics, 1999). The same trend existed for most neighborhood facilities and utilities within the country, especially those concerning water supply road construction, sewage, etc. In response to these housing challenges, Nigerian governments, since pre-independence, have shown a remarkable concern for housing. Also, successive governments in Nigeria have intervened in a number of ways in the housing sector in order to bring about the much needed improvement and transformation.

GOVERNMENT INTERVENTIONS IN HOUSING PROVISION

Because shelter is necessary to everyone, the problem of providing adequate housing has long been a concern not only to individuals, but to governments as well. Thus, most nations, in one form or another, continue to place access to affordable housing at the top of their priority lists (Encarta Interactive World Atlas, 2007). In Nigeria, the major steps taken, so far, towards solving the housing crisis in the country include: (i) The establishment, in 1928, of the Lagos Executive Development Board (LEDB). The Board was empowered to carry out slum clearance, land reclamation, and the development of residential and industrial estates. (ii) The setting up of Nigerian Building Society (NBS) in 1956 to provide housing loans to both civil servants and the Nigerian public. (iii) The creation of the National Site and Services Scheme (NSSS) in 1986 to provide land with essential infrastructural facilities, such as roads, drainage and sewage system, water supply, and electricity for housing developments in well-planned environments. The schemes are planned to provide well laid-out and serviced plots in each of the 36 state capitals of the federation, including FCT Abuja. (iv) The establishment of the National Prototype Housing Program (NPHP) by the Federal Ministry of Works and Housing (FMWH) to complement the objectives of the National Site and Services Scheme (NSSS).The project was embarked upon to demonstrate the feasibility of constructing functional, effective, and affordable housing units through imaginative designs, judicious specification of materials, and efficient management of construction.

(v) The setting up of the State Housing Corporation (SHC) to provide housing to the populace at affordable prices. (vi) The creation of the Federal Mortgage Bank of Nigeria (FMBN) in 1977 to finance housing loans to prospective housing developers at minimal interest rates. (vii) The setting up of the National Housing Program (NHP) in 1991 and the National Housing Fund (NHF) scheme by Decree No 3 of 1992 to provide self loans to prospective housing developers and also monitor developments in the housing sector. (viii) The deconsolidation of the Federal Mortgage Bank of Nigeria (FMBN) through the establishment of the Federal Mortgage Finance Limited (FMFL) to take over retail mortgage portfolios previously handled by the bank and also to facilitate effective management of the National Housing Fund (NHF) Scheme. (ix) The setting up of a Housing Policy Council (HPC) to monitor development in the housing sector and also to set up the machinery for the review of the 1978 Land Use Decree (LUD) in order to make more land available for large scale land developers. (x) The creation of the ministry of Housing and Urban Development in June 2003. (xi) The review of the mandate given to the Federal Housing Authority (FHA) to include provisions of the National Social housing as part of the strategy towards meeting the Millennium Development Goal. The authority also plans to facilitate the provision of two million housing units within the next four years.

(xii) Others are the formulation of the National Housing Policy (NHP) in 1984, the establishment of the Infrastructural Development Fund (IDF) in 1985, and the Urban Development Bank (UDB) in 1992 (Federal Republic of Nigeria, 1997).

10

Furthermore, on the legal and regulatory framework for enhancing housing delivery, eight (8) housing related laws are now before the National Assembly. They are:

1. The Federal Mortgage Bank of Nigeria Act 1977 (replacement) 2. The National Housing Fund Act 1992 (replacement) 3. The Mortgage Institution Acts 1992 (replacement) 4. The Social Insurance Trust Fund Act 1993 (amendment) 5. The Investment and Securities Act 1999 (amendment) 6. The Trustees Investment Act 1962 (amendment) 7. The Insurance Act 2002 (amendment) 8. The Land Use Act 1978 (amendment)

In addition to the above, virtually all the introduced National Development Plans (NDPs) from 1962-1985 and the National Rolling Plans (NRPs) from 1990 to date explicitly recognize the importance of providing adequate housing in the country as a tool for stimulating the national economy (Gbolagade, 2005). The First National Development Plan (1962-1968) accorded low priority to housing with focus on accommodating government staff in the regional capitals and Lagos. A low proportion/percentage achievement was recorded. In the Second National Development Plan (1970-1974) the target was to construct 60,000 housing units (15,000 units in Lagos and 400 units in each of the remaining capitals). There was marginal improvement at the end of that period. Efforts were intensified in the Third National Development Plan (1975-1984) to improve the condition of the housing. Highlights of the programs include: direct construction of low-cost housing units by both the federal and state governments; increased construction of housing quarters for government officials,

11

expansion of credit facilities to enhance private housing construction, and increased investment in domestic production of cement. A sum of N2.5 billion was allocated to the housing sector with a target production of 202,000 units (50,000 units for Lagos and 8,000 units for each of the, then, 19 states). At the end of the period, a success of 13.3% was recorded. During the plan period, the Federal Ministry of Housing, Urban Development, and Environment was created while the Federal Government bought over the shares held by the Commonwealth Development Corporation in the Nigeria Building Society and converted it to the Federal Mortgage Bank of Nigeria (FMBN) with an enlarged capital base from N21 million to N150 million to provide loans to individuals, state housing corporations, and private estate development firms. During the Fourth National Development Plan (19841985) period, three schemes were embarked upon: the direct housing construction, under which 2,000 housing units were to be built in each state annually, while the FHA was to construct about 143,000 low cost housing units across the country. Site and Services Schemes were also to be provided. At the end of the plan period, a success of 20% was recorded. During the 1990-1992 rolling plan period, efforts were intensified on the sites and services scheme. About 2,892 serviced plots were provided in Anambra, Lagos, Imo, Kano, Kwara, Ondo, and Rivers states, while the second phase commenced in other states. On prototype housing schemes, 72 housing units were constructed and allocated in 1990, while the construction of 218 units commenced in Lagos and Abuja. During the plan period, the National Housing Fund Decree No. 3 of 1992 was promulgated and Primary Mortgage Institutions (PMIs) were licensed. The Housing Policy Council was also set up to monitor development in the housing sector. The 1993-1995 rolling plan period witnessed allocation of about 10,474 plots of the three residential categories to the public. The impact of FHA was also felt in Lagos and Abuja. During the 1994-1996 rolling plan, the national housing

12

program was launched with the target of constructing 121,000 housing units of various models all over the country by the end of 1996. However, by the first quarter of 1997, fewer than 2,000 housing units had been completed. The federal and the state governments were expected to spend N2.0 billion on housing provisions during the 1996-1998 National Rolling Plan (NRP). Over N3.00 billion was expected to be spent by the two levels of governments during the 1999-2001 National Rolling Plan (Federal Republic of Nigeria, 1998; Federal Republic of Nigeria, 2000). As part of the efforts to increase houses for the masses in the country, the Federal Government in 2004 pledged to adequately fund research pertaining to the manufacture and the use of local materials in the sector, with the aim of providing 40,000 houses with at least 1,000 per state before year 2007. However, as observed by Ademiluyi & Raji (2008), little had been done to meet this target barely two months into the year 2007. Despite these interventions and efforts by the governments, actual achievements in terms of providing adequate housing in the country remain essentially minimal for a number of reasons. These include: 1. Problem of plan implementation. There is often a wide gap between what is on paper and what is happening on the ground. For example, only 13.3% achievement was recorded in the federal governments housing program in the Third National Development Plan (Mabogunje, 2002). 2. Lack of adequate data relating to the magnitude of the problem, due partly to the absence of the national data bank on housing. 3. Inconsistency in government policies and programs, including frequent changes of policies with changes of government and without proper assessment of the existing ones. 4. Lack of efficient and sustainable credit delivery to the housing sector.

13

5. Peoples incomes are relatively low in comparison with house market prices, resulting in an affordability problem. 6. High cost of building materials. For example, a recent survey has shown that a 50kg bag of cement has risen from N650 in 2000 to about N2, 200 today. 7. The rapid annual growth rate of the Nigerian population, which was estimated at 3.3% on the basis of annual birth rate of 49.3 per 1,000. Coupled with the rapid population growth/urbanization is the problem of an increasing poverty level among the citizenry, which has risen from 65% in 1996 to about 70% in 2007, according to UNDP and World Bank estimates. 8. Lack of effective coordination among Housing Agencies. While all the three tiers of the government are involved in one way or the other in housing matters, their activities are hardly coordinated. 9. Politicization of housing issues, including government involvement in what Onibokun (1983) referred to as the game of number. For instance, between 1974 and 1980, there the plan to deliver 202,000 housing units to the public, but only 28,500 units representing 14.1% were delivered. Also, out of 200,000 housing units planned to be delivered between 1981 and 1985 only 47,200 (23.6%) were constructed. Under the National Housing Fund (NHF) program, initiated in 1994 to produce 121,000 housing units, it was reported that less than 5% was achieved. In spite of a series of government policies towards improved housing delivery, one thing that is clear is that successive governments in Nigeria have not been able to match their words with action. In fact, the situation in the Nigerian housing sector remains like that of a child to whom much is promised but little is delivered. It is no surprise, therefore, that there exists a gap between housing supply and demand.

14

PRIVATE INTERVENTIONS IN HOUSING PROVISION

Housing Finance Requirements
Housing finance by its very nature is a capital intensive venture which if it is to be financed through personal financial resources will require slow and tedious accumulation of savings. However, since housing provides benefits over many years, long-term credit financing is a more logical option as it will spread the repayment burden. But this requires the availability of long-term funding, and for which must be institutional capacity, structure and mechanism that will allow a convenient and effective linkage between the savers/investors and the consumers of such funds. Without an effective finance system, no housing policy can be effectively implemented. A financing framework which facilitates financial intermediation for housing finance consists of institutions as well as their relationship and the processes involved. However, the emphasis in this review will be on relevant institutions and their activities. Indeed the framework must effectively reconcile the affordability limitation of households with viability requirement of financial institutions. In Nigeria, housing is typically financed through a number of institutional sources: Budgetary appropriations, Commercial/Merchant Banks, Insurance Companies, State Housing Corporations and the Federal Mortgage Bank of Nigeria (FMBN): and now the newly established Mortgage Institutions all these constitute the formal institutions. Informal institutions such as thrift and credit societies, and money lenders who have contributed and are still contributing substantially to the finance of housing construction also persists. The impact of these informal institutions however cannot be properly quantified because they are largely uncoordinated, scattered and varied in scope and operational depth.

15

Budgetary Appropriations
For various reasons, the expansion in the external sector of the economy as well as the consequent expansion in the financial system did not translate into any significant improvement in the level of financial intermediation for housing finance. A major reason has been, until very recently, the nature of Government intervention. With resources allocated by the various development plans especially the Third and Fourth National Development Plans, the public sector embarked on the direct construction of mass housing; major housing projects were financed directly from budgetary appropriations. This emphasis on budgetary appropriation was mainly during the oil boom periods of 1973/76 and 1980/81. Little or no role was allowed the Private sector in Housing Finance. The results were insignificant impact on housing need and attendant cost inefficiencies. There were few peculiar features of implementation in the respective periods of the plans which have had a direct bearing on Housing finance activities. (a) Fiscal policy alternated between stringent and liberal control on imports, depending on the buoyancy of hard currency earnings. Given the import dependence on building materials, cost of housing construction oscillated. (b) Apart from its regulatory role, government at the Federal and State level was also engaged in direct housing construction. For example the new government of Lagos State is currently embarking on the provision of 10,000 housing unit per year for the next four years of mix development for the people of the state. How realizable this scheme is only time will tell. But definitely it all boils down to finance. It is on record that the State is seeking to obtain 4.0 billion Naira from the capital market just to be able to fulfill part of their promise of housing.

16

(c) Although the Third and Fourth plans placed emphasis on a housing sector, there was no adequate allocation of funds. (d) The institutional structure for mortgage finance did not evolve beyond rudimentary stage.

In the event, there was little evidence of financial presence from the private sector in public Sector housing finance activities. In consequence, the operational dependency and Sophistication which a greater presence from the private sector could have induced in the Housing finance system did not take place. The situation was compounded by the strict regulation of credit expansion which, until the recent deregulation, has compelled the financial institutions to remain largely in the short-term end of the credit market. Inspite of their importance in financing the construction of housing, the commercial and Merchant Banks have not gone beyond allocating 20% of their loans and advance into building construction for many years. This is because of the relative slow rate of returns and the interest rate and inflation risks inherent in long-term lending. Indeed, with the deregulation of the financial system since 1986, the percentage share of real estate and construction in total loans and advances has declined for Merchant Banks from 16.5% in 1985 to 12.3% in 1986 and 7.5% in 1987 (see table 3); while for Commercial Banks it declined from 20.5% in 1985 to 18.1% in 1986, 16.5% in 1987 and 15.5% in 1988 (see table 2).

17

Table 1: Merchant Banks Real Estate % Share and Maturities

Real Estate/Construction as a Year percentage of loans & advances (A)

Call money to 3 years maturity as percentage of all deposits (B)

1984 1985 1986 1987 1988

18.6 (N313.7m) 16.5 (N297.2m) 12.1 (N335.7m) 7.5 (N311.8m) 7.8 (N335.6m)

63.6 60.4 60.1 63.9 59.1

Sources: CBN Economic & Financial Review

18

Table 2.

Year

1984 1985 1986 1987 1988

20.6 (N2,373.8m) 20.5 (N2,493.7m) 18.1 (N2,840.4m) 16.5 (N2,892.4m) 15.5 (N3,007.9m)

86.9 90.5 88.0 88.7 90.4

Source: As in Table 1

An examination of the maturity profiles of deposits with commercial and Merchant Banks shows the dominance of call money to 3 years maturities which are mismatched to the longterm nature of housing finance. Within the period analyzed, although the percentage of call money to 3 years maturities to all deposits for Merchant Banks declined from 63.9% in 1987 to 59.1% in 1988, the average remains a high 61.4%. For the Commercial Banks, the average remains 88.8% and indeed the percentage increased steadily from 88% in 1986 to 88.7% in 1987 and whopping 90.40% in 1988. The Commercial rate of interest offered, the shortage repayment period, as well as the level of collateralisation resulted in the allocation to real estate being focused on properties in prime locations where the prospects for high sale/rents may accelerate loan repayment.

19

Insurance Companies
Insurance companies have funds appropriate for financing housing construction. However, under the current insurance decree, only up-to 25% of life and 10% of non-life policies can be invested in real estate. Life premiums are not only long-term but relatively cheaper than deposits. However, the investment emphasis of these institutions has been short-term due to the preferences of these companies and to a lesser extent the legal restriction imposed. Indeed, while percentage allocated to real estate declined since 1985 from 12.1% to 7.2% in 1986, that allocated to mortgage loans declined steadily since 1984 from 7.1% to 4.8% in 1985, 3.9% in 1986, and 3.6% in 1987 (see table 3).

Table 3: Insurance Companies: Real Estate/Mortgage

Year

Type of Invesment (N)

Real Estates Mortgage Loans

1984 1985 1986 1987

93.5m (11.7%) 149.2m (12.1%) 116.9m (7.2%) 144.3m (7.5%)

57.2m (7.1%) 59.7m (4.8%) 63.0m (3.9%) 69.2m (3.6%)

Source: Insurance Year Book.

20

Housing Corporations
The State Housing Corporations operate largely as property developers and they depend mainly on Government budgetary allocations. The housing units are usually sold outright as they usually do not provide mortgage finance to buyers. The number of housing units produced has not been significant relative to demand. Their role would have been effectively implemented if they were operating as financial intermediaries. It has been noted elsewhere that for reasons such as availability of Government funding, housing corporations do not operate savings schemes; and those that have such schemes have marginalised them. It was in realization of the enormity of the housing problem relative to declining resources capacity available to the Public sector, that the previous Governments decided to facilitate construction by the Private Sector institutions. Consequently the new National Housing Policy was established.

New National Housing Policy

Realizing that the enormous public sector efforts have not effectively addressed an expanding housing deficit and escalating construction costs, and that such effort must be substantially collaborative with the Private Sector, Government decided to establish a framework within which such collaboration can effectively address the housing problem. This was articulated in the National Housing Policy in 1988. The policy attempts inter alia; to create a new housing finance system, encourage the linkage of the housing sector to the capital market, establish a National Housing Fund, and expand Private Sector role in the housing delivery system.

21

The most significant differences between the new policy and the previous ones are firstly, that housing is now seen in context of the overall national development. Previous policies had tended to regard housing as a social service and a natural fall-out of the national economic development. Secondly, the policy has identified the fact that different household both within and between income groups tend to have different demand for housing. This is evident from the ultimate goal of the policy which is, to ensure that all Nigerians own or have access to decent housing accommodation at affordable cost by the 2000 AD Thirdly, the focus of the policy seems to be to remove all barriers to the supply of housing and to provide incentives to all parties involved (governments, private sector and individuals) in the housing delivery system.

New Structure for Housing Finance

The new housing policy has established a two-tier housing finance structure, with FMBN as an apex institution and a decentralized network of Primary Mortgage Market institutions such as building societies, housing co-operatives, and home savings and loans associations. This structure aims to streamline processes and organizational relationships within the housing finance system and encourage expansion in private initiative. In this regard, the legal framework for the organization and implementation of the apex role of FMBN has been defined by the Mortgage Institutions Decree No.53 of 1989.

22

National Housing Fund (NHF) was established in 1992

The concept of the National Housing Fund as proposed in the National Housing Policy is to ensure a continuous flow of long-term funding for housing development and to provide affordable loans for low income housing. The promulgation of the National Housing Fund Decree heralded the emergence and establishment of a battery of mortgage finance institutions in Nigeria. Quite a number of them had been in operation for the last 12 months. Good as the intention of the scheme appear, the technicalities and modalities of releasing the loan to the mortgage institutions to unlend to the members of the public have not been worked out and as such most potential clients have been frustrated by the high interest rate and cost of funding. Most of the mortgage institutions on their own have been mobilizing funds by accepting deposits and savings at very high interest rate in a highly competitive marketing environment. Most customers on the other hand are prepared to wait for the National Housing Fund than take loans at high interest rate which is presently being dictated by the money market condition.

CURRENT HOUSING DELIVERY APPROACH

In 2003, the federal government also established the Federal Ministry of Housing and Urban Development, and Proposed a Housing Reform, in view of the fact that there were not many affordable houses in Nigeria. There was an illusion that houses were available. But most of them were high-priced. Mabogunje (2004) opined that a number of other legislation needs to be amended substantially to bring their provisions in line with the new housing regime. The touchstone in such reviews is to reduce red-tape and ensure that various legislations are compatible with demands of a free and robust market economy. The period 2003 2004 witness a Housing policy that recognized the private sector on the driving seat of housing

23

delivery in the country, the key features of this policy include the placement of the private sector in a pivotal position, for the delivery of affordable houses, on a sustainable basis; assignment to government of the responsibility for the development of primary infrastructure for new estate development; and review and amendment of the Land Use Act to ensure better access to land and speedier registration and assignment of title to developers. Others are the development of a secondary mortgage market, involving the FMBN and the establishment of a new mortgage regime, under the NHF, to facilitate more favourable mortgage terms; and a five-year tax holiday for developers (Thisdayonline, 2009). AFFORDABLE HOUSING SCHEME There are several affordable housing schemes that are either fully funded by government or or in partnership with the government under the Public Private Partnership (PPP) scheme. In some cases selected developers were given some kind of concession by government with the aim of providing affordable housing for instance, in the Federal Capital Territory. Such efforts were further complemented with the Private Finance Initiative (PFI). Jibrin (2009) further argued that while the quality of the existing stock is also under a heavy scrutiny in term design and desired functions including acceptable livable neighborhood, 87% of the existing stocks are backlogs which are stocks that do not meet the minimum quality requirement.

24

Site and Services Scheme The pressure for this came from the international lending community and in particular the World Bank. Given the rising figures of spontaneous or squatter settlements, in cities all over the third world, in the face of tight planning control, regular demolitions, and high-cost construction programmes, the World Bank argued for a new approach to urban development which incorporated various forms of aided self-help (World Bank, 1972) the two packages which received the most support were sites and services scheme, and upgrading schemes. Essentially, the first provided low-income beneficiaries with serviced plots including tenure security and help to build their own houses; the second approach helped house-owners in existing squatter areas obtains tenure to their land, and to improve their dwellings. Many of these sites exist all over the country essentially provided by the government. And, inspite of the fact that they may help to improve tenure security, the programme is capital-intensive in nature and the initial target population, low-income, usually do not benefit from them. Aluko (2002) opined that the cost attached to each plot is usually beyond the reach of the urban poor.

THE WAY FORWARD

Housing is an economic activity with an inherent multiplier effects. Once the housing sector is buoyant, it would positively rub on other sectors of the economy, be it finance, building materials, employment, real estate, and land transactions, among others. The government can accomplish a lot in the housing sector through concerted effort and adequate funding. While the record of government interventions in the housing sector in Nigeria looks quite impressive, policies are rarely implemented or haphazardly implemented. In other words,

25

Nigeria seems to be long on policy, but very short on implementation. Thus, one can easily argue that there have been many lofty initiatives and efforts by successive governments in Nigeria capable of arresting the worsening housing situation in the country and that lack of political will has been a major barrier to progress. There is, therefore, the need for the government to master the necessary political will and make more concerted efforts to address and solve, for the majority of its citizens, the twin problem of shelter and better living conditions. Also, the government should shift focus from full direct housing construction to that of providing enabling environment for the sector. Individuals and private agencies are known to be more efficient to be in housing construction. Thus, given the same amount of money, individuals and private agencies are likely to build more and better houses than the government or quasi-government agencies, especially in a country like Nigeria where there is a high level of corruption. The government should adopt and vigorously pursue a housing delivery strategy that is end-users driven and through the use of cooperatives, development agents, and Public Private sector Participation (PPP). Furthermore, since most housing delivery projects are long-term investments and capital intensive, financial institutions should be encouraged to finance some of these projects. Similarly, cooperative housing should be encouraged because most individuals are able to achieve/perform through cooperative societies. Building materials are believed to constitute about 55% to 65% of total cost of construction input. To achieve sustainable housing delivery in Nigeria, housing developers should shift from over-dependency on imported materials to the use of local materials, such as walls, roofing, and floor materials that are affordable and durable. In conclusion, there are at least five powerful factors involved in the housing crisis and which are, no doubt, beyond an individuals control, namely, population growth, rapid

26

urbanization, natural disasters, political upheaval, and persistent poverty (Awake, 2005; Olotuah, 2005; Mabogunje, 2002). These factors, among others, must be adequately addressed by the government if appreciable progress is to be made in its quest for providing good housing for all.

My Proposal
Three issues that merit consideration in this context are the escalating prices of building materials, the constraints in the land delivery system and the high physical standard which militate against the affordability of these housing. This situation must be reversed quickly if the housing pressure is not to assume a crisis proportion during this new millennium.

(i) Establishment of Construction Bank: Part of the problem of the industry is the liquidity i.e. in accessibility to credit facilities. The Commercial Banks are not setup to loan money on long term bases. The establishment of the Construction Industry own bank where lending is a lot easier and interest rates are far less than commercial rate and the Minimum Rediscount Rate (MRR), would not only boost construction activity, it would help jump start up and coming young players in the industry. Part of fund that could be made available for this Bank could be pension funds from government agencies and parastals which are currently being wasted through wrong usage .It is important to note that regardless of the availability of long-term lending and the appropriate institutions to render the required services, housing finance can only become effective when a substantial proportion of the population can be served.

27

The problem is to appropriately finance the housing needs of middle and low income groups that constitute the majority through this medium. It shall be a private sector led-bank with government just having an equity interest. (ii) The Use of Local Building Materials: The use of local building materials and intermediate technology must be followed with the provision of other basic infrastructures like safe drinking water, roads, electricity supply and other social amenities especially to improve the quality, live ability and attractiveness of low-cost housing. Presently houses are built and rely solely on cement. The nation needs about 8.5million metric tonnes yearly. While our cement companies are only able to produce about 2-3million metric tonnes. This short fall has always accounted for the galloping cost of cement every year as shown in the table below. Over half of Nigerias cement need is imported. According to recent survey, Nigeria is the world largest importer of cement with about 70.5% dependence on importation. The chances of the local industry rising to the task remain very slim as only four (4No) out of the seven (7No) of the cement companies in the country are still limping along at various levels of capacity utilisation.

28

Table 3. Cost of Cement Per 50Kg Bag (WAPCO) Price

Years Amount

1990 1991 32 40

1992 85

1993 85

1994 180

1995 410

1996 430

1997 500

1998 550

1999 600

2000 2001 650 850

Fig. 1 There is also the campaign to use less of cement blocks in housing construction especially the low-income housing. The research has shown that a 225mm block wall plastered and painted on both sides with emulsion paint cost N1,700/m2 while a similar solid brick wall plastered and painted on one side with emulsion paint cost N1080/m2. A savings of N520/m2 . A further savings has been observed could be made with the use of bamboo shoots. Thus financing the construction of housing for all income groups require creative framework through localized design and packaging as opposed to imported design.

29

(iii) Evolution of Simpler Form of Design: A need to do away with over designing and concentrate more on functional design. The local Architects have to take the lead in this regard. A more cost effective design is highly desirable at this point in time if mass and cheap housing is to be assured. (iv) Review of land use Decree of 1976:- Whereby all lands in government ownership is freed in order to enhance intense private sector participation in the industry by making access to land very easy. This would help in the empowerment of the real sector and thus an active and vibrant industry. A situation such as witnessed in the 2000 Budget of a paltry sum of N1.8 Billion for social housing would become a childs play if more land is freed or ceded to the private sector.

30

CONCLUSION
In conclusion, what Nigerians need to survive the wounds of near-homelessness include good governance, increased access to land, credit, affordable housing and environmentally sound and serviced human settlements. Government should therefore undertake steps by all appropriate means and to the fullest of funds at his disposal to achieve progressively the tenets of adequate shelter for Nigerians especially the vulnerable group. This must be done without discrimination as to status, sex, tribe and without fear of favour. It is indeed hoped that the above framework which is indicative of bright prospects for financing housing construction will rapidly expand the quantum of finance available and dampen the high cost of funding and construction. With the restructuring of the domestic economy, it is my belief that there is a bright prospect for housing financing large scale in Nigeria in this near future. It is recommended that more emphasis be placed on providing low and medium income housing units in Nigeria using earth blocks and intermediate technology. It is also expected that to avoid the takeover of these houses by the high income group, national or state monitoring groups made up of NGOs, government institutions and other public and private stakeholders be established to monitor progress and make sure that target populations benefit. The use of sample walls using stabilized blocks, reinforced concrete in beams and lintels and combining this with corrugated roofing sheet would reduce construction cost by about 60%. It should be noted that reduction in unit cost would produce more units so as to meet up the 8 million units required to adequately house the Nigerian population. Housing finance policies must be made to integrate the lower income classes. This can be possibly done by giving long term loans with sustainable interest rates and no collateral. Cooperative, communal and self build practices must be encouraged by the appropriate

31

ministries and NGOs to further help increase self reliance and help. Establishment of the construction Bank is a sine-quo-non in this regard. The national Road and Building Research Institute must be empowered to do a lot of research into cheap and effective materials for both housing and road constructions. Efficient land markets and sustainable land use policies are indispensable and there is need to change the Land Use Decree to a more housing friendly legislation. Thank you for this opportunity. Thank you for your patience. Thank you for listening.

32

REFERENCES
Ademiluyi, I. A. & Raji, B. A. (2008). Public and Private Developers as Agents in Urban Housing Delivery in sub-Saharan Africa: The Situation in Lagos State. Humanity and Social Sciences Journal, 3(2), 143-150. Abumere, S. (1987). Urbanization and Urban decay in Nigeria. In: Onibokun A. G., Olokesusi, F., & Egunjobi, L. (eds). Urban Renewal in Nigeria. Ibadan: NISER/CURP. Adeagbo, D. (1997). Nigerian Housing. In: Philips, A.O. & Titilola, S.O (eds). Nigeria in 2010. Ibadan: NISER. 195-206. Agbola, T. (1998). The Housing of Nigerian: A Review of Policy Development and Implementation. Research report No.14, Development policy centre, Ibadan. Anthonio, J. B. (2002). Housing for all by the year 2015. Paper presented at the 2002 Building week seminar. Obafemi Awolowo University, Ile-Ife, Nigeria. Awake. (2005). The Global Housing Crisis: Is there a solution? Monthly publication of Jehovah witness. 22nd September,2005. 3-12. Egunjobi, L. (1999). Our Gasping cities, An Inaugural Lecture. University of Ibadan, U. I. Press, Ibadan. Encarta Interactive World Atlas. (2007). Housing (shelter): A Computer-Based Microsoft Software. Fadahunsi, S.O. (1985). Fifty Years of Housing in Nigeria. In: Onibokun P. (ed.). Housing in Nigeria: A book of Reading. Ibadan: N.I.S.E.R. 105-132. Federal Office of Statistics. (1997). Annual Abstract of Statistics. Lagos, Nigeria. Federal Office of Statistics (1999). Statistical Abstracts. Abuja. Federal Republic of Nigeria. (1991). National Housing Policy. Federal Ministry of Works and Housing. Abuja.

33

Federal Republic of Nigeria. (1998). First National Rolling Plan, 1990-1992. National Planning Commission. Abuja. Federal Republic of Nigeria. (2000). Seventh National Rolling Plan 1996-1998. National Planning Commission. Abuja. Federal Republic of Nigeria. (1997a). Nigerias Agenda 21. Federal Environment Protection Agency. Abuja. Federal Republic of Nigeria. (1997b). Vision 2010, Volume 1 Main Report. September, 1997. Gbolagade, M. O. (2005). An Appraisal of Maintenance of Privately Owned and Publicly Owned Multi-Tenanted Estate in Lagos Metropolis (An Unpublished Work of the Department of Urban and Regional Planning). University of Ibadan, Ibadan, Nigeria. Listokin, D. & Burchel, R.W. (2005). Housing. In: Microsoft Encarta Reference Library 2005. Microsoft Corporation. Mabogunje, A. (2002). At Lagos Housing Fair, Mabogunje Lists Delivery Problems. The Punch. Wednesday, May, 2002. Mabogunje, A. (2003). Welcome address at the Stateholders Forum on Strategies for enhancing Domestic production of Building Materials for Mass Housing Development in Nigeria. Held at NICON Hilton Hotel, Abuja, 24th September 2003. Onibokun, P. (1990). Urban Housing in Nigeria. Ibadan: NISER. Onibokun, A.G. (1983). Housing Needs and Responses: A planners view. Journal of the Nigerian Institute of Town Planners. 11(1&2).

Ogu, V.I. & Ogbuzobe, J.E. (2001). Housing Policy in Nigeria: Towards Enablement of Private Housing Development. Habitat Internationals, 25, 473-492.

34

Olateju, B. (1990). Innovating Building Materials: Application for Cooperative Housing Development. A paper presented at the National Workshop on Housing Cooperative for Nigeria. Obafemi Awolowo University, Ile-Ife, 17th 18th December. Olatubara, C.O. (2008). The Dynamics of Households. Residential Choice in Nigeria: The Fifteenth Faculty Lecture. Faculty of the Social Sciences, University of Ibadan, Ibadan, Nigeria. Olokesusi, F. & Okunfulure, O.J. (2000). Strategic Issues in Housing. In: Ajakaiye, O. & Akinbinu, A. (eds.). Strategic Issues in Nigeria Development. Ibadan: NISER, 169-207. Olotuah, A.O. (2005). Urbanization, Urban Poverty and Housing inadequacy. Proceeding of African Union of Architects Congress. 23rd 28th May, Abuja, Nigeria, 185-199. Salau, A. T. (1990). The Environmental context of urban housing-public services and infrastructural facilities in Nigerian urban centres. In: Onibokun P. (ed.). Urban Housing in Nigeria. Ibadan: NISER. 58-88. United Nations. (1992). Promoting Sustainable Human Settlement Development, Chapter 7. In Earth Summit Agenda 21,The United Nations Programmes of Action from Rio. UN Department of Public Information, New York. United Nations. (2002). A United Nations Report on Human Settlement: The Changing Shelter Policies in Nigeria. Retrieved from: www.un-habitat.org. Yaradua, U. M. (2007). Presidential Address at the 2nd International Seminar on Emerging Urban Africa. Held at Shehu Musa Yaradua Conference Centre, Abuja, Wednesday, 17th October, 2007. Wikipedia (2002). United Nations Population Fund. Retrieved from: en.wikipedia.org/wiki/United_Nations_Population_Fund.

35

Ademiluyi, I. A.: Department Of Geography and Regional Planning, Olabisi Onabanjo University, Ago-Iwoye, OgunState, Nigeria Abumere S. (1987) Urbanisation and Urban Design in Nigeria in Onibokun A.C, Olokesusi et al Urban Reveiwal In Nigeria Agbola Tunde (1998) The Housing of Nigerian: A review of policy development and Implementation. Research Report No.14. CBN (1990-1998) Annual Report and Statement of Accounts, Central Bank of Nigeria; Abuja. CBN (1993-1997) Statistical Bulletin (Various issues) CBN; Abuja Falegan S.B. (1985) Housing Finance and Funding: The Nigeria Experience In(ed) Onibokun, Poju; Housing in Nigeria (A book of reading) NISER. Federal Office of Statistics (FOS) (1994) Social Statistics in Nigeria FOS; Abuja Federal Office of Statistics (FOS) (1997) Social Statistics in Nigeria, FOS, Abuja Federal Office of Statistics(FOS) (1999) Poverty profile for Nigeria (1980-1996) FOS; Abuja Federal Ministry of Works And Housing (2001) Publication in Policy News Journal June 4, 2001. Punch Newspaper of Nigeria Tuesday, 3rd July 2001 Zubairu Mustapha (Dr) Restructuring Institution to Jump start the housing delivery Process in Guardian Newspaper 23rd April, 2001.

Agbola, T. (1998), The Housing of Nigerians: A Review of Policy Development and Implementation, Research Report, 14, Development Policy Centre, Ibadan Agbola, T. and Olatubara, C.O. (2003), Private sector driven housing delivery (in Nigeria):

36

Issues, constraints, challenges and prospects, a lead paper presented at the 2nd Annual National Workshop on Private sector Driven Housing Delivery in Nigeria, University of Lagos, Lagos, 30th 3rd July. Akinlusi, A. (2007): Mortgage Facilities; A Panacea for Mass Housing Development. A paper presented at Nigerian Institute of Building conference, Lagos, November, 13, Pp9-16. Aluko, B.T. (2002), Urban housing for low income earners in cities of Lagos state: The Land Question, Proceedings of a National Conference on The City in Nigeria, Faculty of Environmental Designs and Management, Obafemi Awolowo University, Ile Ife, pp288 294 Aina, T.A. (1990), Petty landlords and poor tenants in a low income settlement in metropolitan Lagos, Nigeria in Amis, P. and Lloyd, P. (1990) eds., Housing Africas Urban Poor, Manchester University Press, Manchester, pp87 102 ADEGEYE, A.S AND J.S. DITTOH (1985). Essentials of Agricultural Economics, Impact Publishers Nigeria Ltd, Ibadan. EBIE, S.P.O.F. (2004): Statutory component(s) on Housing Policy Legislative and regulatory requirements of the new housing policy, Housing Today Vol. 4 No. 8, pp 6-9. Urban development Policies in Nigeria (1988): Planning, Housing and Land Policy; A report of the Centre for Economic Research on Africa. December, 2008, Pp 1-12. Encarta, 2007: A computer base Microsoft software. Fasakin, J.O. (1998): Cooperative Housing; The Concept, Experience and applicability to Nigerias socio-economic millieu. Seminar paper presented at the Fedral University of Technology, Akure. Federal Government of Nigeria (FGN, 2004): National housing Policy Draft, Abuja.

37

Federal Office of Statistics (FOS, 1983).Social Statistics in Nigeria, FOS, lagos. Mabagunje, A. (2002): Housing Delivery problems in Nigeria. Punch, Wednesday, May, 2002. Nubi, O.T.(2000): Housing finance in Nigeria. Need for Re-engineering Ideal Habitat Cooperative Housing Initiative. Nubi, O.T.(2008): Affordable Housing Delivery in Nigeria. The South African Foundation International conference and exhibition.Cape town, October, Pp1-18. Olutah A.O (1997): The House: Accesibility and Development-A critical evaluation of the Nigerian situation. Proceedings of National symposia on Housing in Nigeria. Obafemi Awolowo University Ile Ife, Pp312-317 Onibukun, R (1990): Urban housing in Nigeria, (NISER, Ibadan) Okupe, O. (2002): Problem of Real Estate Developers in Nigeria. A paper presented at a workshop orgarnised by the Nigerian Institute of Quantity Surveyors., Abuja. Oduwaye, A.O.(1998): Beyond structural adjustment programme: Strategic options for increasing housing stock in Nigeria. Olomolaiye, (1999): Rural Housing in Nigeria; Concept, Problems and functional approach. Nigerian Institute of town planners. Raji, O. (2008): Public and private developers as agents in Urban Housing delivery in subsaharan Africa. The situation in lagos state, Humanity of social sciences Journal, Vol.3, No.2: pp 143-150.

38