By Victoria Ojeme
ABUJA- The Overseas Private Investment Corporation OPIC, says lack of market data to plan, limited investment in technical innovation and difficulties in obtaining affordable mortgage loans are part of the reasons for Nigeria’s housing problem.
Managing Director of OPIC, Debra Erb, who spoke on “The OPIC Approach to Large Scale Housing” at the second day of the on-going Abuja International Housing Show and Conference said “affordable mortgage loans are still very difficult to obtain given high interest rates and lack of local sources of long term capital.”
Erb explained that it is very difficult to efficiently deliver large scale housing in unpredictable macro environment.
“Lack of market data to plan, investment in technical innovation is limited in this sector, municipal utility capacity cannot keep pace with rapid development, affordable housing competes with more profitable segments, overall lack of professional housing developers specializing in affordable- are private sector limitations to housing,” OPIC said.
The World Bank estimates that Nigeria’s housing deficit stood at 17 million units as of 2013. Currently the housing deficit according to Federal Mortgage Bank of Nigeria stands at between 17 – 22 million units.
The Centre for Affordable Housing Finance in Africa reports that housing production in Nigeria is at approximately 100,000 units per year, while what is needed to bridge the deficit is a minimum of 1,000,000 units per annum housing production. (CAHF 2018)
In his presentation, the President, Real Estate Developers Association of Nigeria (REDAN), Ugochukwu Chime said that in terms of mortgage finance, over sixty trillion Naira would be required to address the deficit at an average unit price of three million, five hundred thousand Naira per housing unity.
“Nigeria’s current mortgage sector contribution to our GDP is less than 1 per cent. While that of countries like South Africa stand at 20 per cent; Ghana 4 per cent; UK 65 per cent and USA 76 per cent,” he said.
Chime quoted Nigeria’s former Finance Minister, Dr Ngozi Okonjo-Iweala as saying that the housing sector is a significant contributor to economic growth and has multiplier effects on the broader economy. She informed that studies suggest that in the United States, every dollar spent on housing generates $1.60 in the wider economy.
According to Chime, “There is an urgent need to create a National Housing Council distinct from the existing National Council on Housing which is domiciled in the Federal Ministry of Housing, and is dedicated to enhance the coordination of activities in of professionals and organisation involved in the supply side of the real estate industry.”
He said the exclusion of the demand side stakeholders and inter-ministerial rivalry on who should superintend the sector between Finance MDAs and Works/Housing MDAs has resulted in confusion and untold hardship.
He added that by virtue of the Land Use Act that has conferred on State governments the role of Land Administrators, “the 37 Land Administrators (36 States and FCT), must enhance the ease of doing business in their respective State.”