Homes & Property

January 9, 2012

Subsidy utilisation: Danger of FG’s silence on housing development

By Mike Eboh

The Federal Government’s silence on the utilisation of proceeds from the removal of subsidy on petroleum products to address the housing needs of the populace has highlighted the insincerity of the government to the plight of the citizenry.

In the Subsidy Reinvestment and Empowerment, SURE, programme document put forward by the Federal Government to sensitise Nigerians on the benefits of subsidy removal and how proceeds saved from the programme will be utilized, the Federal Government was silent on plans to address the housing and accommodation challenges confronting a vast majority of the country’s population.

In the document, the government said the total projected subsidy reinvestible funds per annum is N1.134 trillion, based on average crude oil price of US$90 per barrel. Out of this, it said, N478.49 billion accrues to it, while the rest will be disbursed to the states, local governments, Federal Capital Territory and transfers to the Derivation and Ecology, Development of Natural Resources and Stabilization funds.

According to the document, the Federal Government said it will channel its own share of the fund into a combination of programmes to stimulate the economy and alleviate poverty through critical infrastructure and safety net projects.

The government said it will invest in the power, roads, transportation, water and downstream petroleum sectors.

It said, “The proposed Subsidy Reinvestment and Empowerment Programme in the agriculture, education, health, Information and Communication Technology, petroleum, power, water supply, road and rail transportation sectors, as well as public works and youth empowerment programmes will not only lead to the transformation of public infrastructure in Nigeria, but will also ensure the gainful employment of millions of Nigerians who were hitherto unemployed. This will enhance the socio-economic wellbeing of our people.”

However, the states are yet to inform the public on their plans for the funds.

The absence of a plan for housing development in the subsidy reinvestment programme clearly negates the developmental agenda of the country, as virtually all the National Development Plans from 1962-1985 and the National Rolling Plans from 1990 to date clearly recognise the importance of providing adequate housing in the country as a tool for stimulating national economic growth and development.

However, the neglect for housing development over the years is a pointer to government’s insincerity for the plight of the masses and majority of the low and middle income population of the society.

According to Dr. Israel Ademiluyi of the Department of Geography and Regional Planning, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, despite numerous interventions and efforts by governments in the area of housing, as portrayed in the National Development Plans and National Rolling Plans, actual achievements in terms of providing adequate housing in the country remain essentially minimal.

Ademiluyi, in his paper, titled; ‘Phousing delivery strategies in Nigeria: a historical perspective of policies and programmes’, gave a chronology of neglect and incomplete efforts in the sector.

According to him, between 1974 and 1980, there was the plan to deliver 202,000 housing units to the public, but only 28,500 units, representing 14.1 per cent were delivered.

“Also, out of 200,000 housing units planned to be delivered between 1981 and 1985, only 47,200 (23.6 per cent) were constructed. Under the National Housing Fund (NHF) program, initiated in 1994 to produce 121,000 housing units, it was reported that less than five per cent was achieved,” he stated.

Ademiluyi further noted that 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.

He said 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,” he stated.

Tracing the problems of housing in Nigeria, Mr. Nubi of the Department Of Estate Management, University Of Lagos and National Coordinator, Ideal Habitat

Cooperative Housing Initiatives, in his paper titled, ‘Housing Finance In Nigeria — need

For Re-Engineering’, said the poor performance of Federal Mortgage Bank of Nigeria, FMBN, which gave loan to 8,874 out of 10,000 application between 1977 and 1990 was very worrisome, adding that this brought to the fore the need for the FMBN to undergo serious re-engineering to be able to cope with the enormous task of housing finance.

On the way forward, he advised that government must pursue radical development of the rural economy, stating that any policy that encourages rural development will help eliminate unemployment, slum formation, and perpetual increases in demand for housing and stress on urban infrastructure.

Nubui further stated that it will also check mass rural-urban migration, adding that rural housing problem is qualitative.

He added that adequate measure should be taken to provide the much-needed infrastructure to awake the slumbering economy.

Also speaking on the way forward, Ademiluyi said, “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.