Undoubtedly, housing is a fundamental social security that is next to food in the hierarchical chain of human needs. Under colonial watch, the government had noted the fundamental safety role of shelter in nation building thus in 1956 Nigerian Building Society (NBS) was established with a share capital of N2.25 million for viable mass housing scheme.
Few years later, urbanization trends and ever-growing needs for housing suppressed the bureaucratic scope of NBS that Nigeria inherited from colonial masters. Efforts towards addressing such bottlenecks and contemporary needs gave birth to the Federal Mortgage Bank of Nigeria (FMBN) in 1977 with N20 million take-off capital. FMBN saw series of bureaucratic changes under past administrations until 2002 and 2006 when National Policy on Housing and Urban Development restructured it into a Federal Government-sponsored Enterprise (FGSE) with more focuses on secondary mortgage and capital market functions.
By the 1992 Act, the National Housing Fund was established as contributory scheme to facilitate mobilization of financial resources from different sources for the provision of houses for Nigerians, especially low income earners at affordable costs. The fund sourced its fund from the mainstream banks, insurance companies, Nigerian income earners in both the public and private sectors– (2.5% of basic salaries of N3, 000 and above at an interest rate of 4 per cent to each savings/contribution made), and budgetary allocation by the Federal Government. The proceeds of the fund were to be channelled by FMBN to the Primary Mortgage Institutions (PMIs) to finance individual efforts in house ownership.
Considering these and other year-long efforts in the nation’s history of mass housing development, the unanimous question has become: Why are Nigerian masses still working like elephants but earning rewards like ants?
Investigation by Economic Confidential have revealed myriad headwinds that make Nigeria to be about 17 million in housing unit deficit, according to the Government’s figure, and underdeveloped world vis-a-vis inadequacy of decent shelter for the citizens.
Several policies towards realization of housing development are inconsistent, inadequate, slow and procedurally difficult. These have led to serious overcrowding and massive development of squatter settlements and slums in major cities across the nation, especially Federal Capital Territory, Abuja. For instance, it is more difficult for people in the lower and middle cadre of socioeconomic pyramid to secure Right of Occupancy (C-of-O) of land or property in Abuja. Affluent and corporate organizations pay through their noses to fully and legally own property.
A landlord in Wuye District of Abuja, Mr. Joseph Samuel, who spoke with this Magazine narrated his experience, saying that cost and legal procedure of acquiring property in Abuja is cumbersome and becoming unbearable as result of difficult bureaucracy and corrupt disposition of people who have singular authority to allocate land.
Samuel said “I paid through my nose to secure land to build my house, I couldn’t get C-of-O despite huge amount of money I spent to lobby the officials until after six years; only with C-of-O, you can use your property for collateral at banks.”
Also, by 2000 mass housing scheme in Abuja was initiated through Public Private Partnership (PPP) strategy, with the main objective to provide adequate and affordable housing accommodation for the growing population in the territory. Based on the policy, the Federal Capital Territory Administration (FCTA) launched its guidelines for Mass Housing Development (MHD) which provides the background for mass housing. The guideline allows for large parcels of land to be granted to private sector real estate developers at low prices. These developers were to then construct estates of affordable housing and tertiary infrastructure, linking these communities to the government provided primary infrastructure.
This arrangement received public applause but sadly, it ended up consumed by corruption as desired impact has never been felt by the masses.
There have been allegations that FCTA officials defied the rule and specifications of the agreement for land allocation. An investigation shows that the largest allocations of land for the MHS were made to foreign companies, affluent citizens out to build empires even to the exploitation of the poverty stricken citizens, and well placed domestic companies with significant financial strength many of them engaged in other projects than housing development. They were allocated larger parcels of land than their financial capability. They resorted to land subdivision into single plots which were then sold to individuals posing as sub-contractors. Analysts observed that the majority of participants did not have good intentions towards the scheme as the houses eventually produced by the MHS are unaffordable to majority of residents.
It is said that the present is a relic of the past, so, housing experts are still contemplating recent ‘Land Swap’ initiative of the immediate past FCT minister, Senator Bala Mohammed. According to Mohammed, under the initiative, government exchanged definite sizes of land for infrastructure provision by fifteen real estate developers who are expected to spend about N560 billion to provide the actual engineering infrastructure needed to open up nine stipulated districts to be ready by 2018. It was estimated that this initiative will provide housing for more than one million residents, reducing the housing deficit by about 35%. Abuja residents are hopeful that in the next two years they will be in position to own houses at affordable prices as promised by the Minister.
Not a few civil servants have been sceptical of most mass housing initiatives as the number of contributors to the NHF has been relatively small compared with the national work force. According to an NHF report, there are more than 10 million workers who are yet to be registered and are therefore not making any contribution. There are alleged cases of diversion of workers contributions to the fund by employers to other investments. Cooperative societies’ and labour union mass housing initiatives that workers could have resorted to were also messed up by swindlers. For example, many civil servants nearly lost their money in 2014 when the workers mouthpiece, Nigerian Labour Congress (NLC) entered into partnership with a real estate developer, Kriston Lally PLC to construct over two thousand housing unit to cater for workers’ housing needs nationwide.
The memorandum of understanding by the partners stipulated that NLC would provide the land for the project as well as ensure there was significant number of subscribers while Kriston Lally Plc was to take care of funding; build the houses by providing designs and building plans as well as secure development approvals from the relevant authorities. Subscription for each of the house types was to follow a repayment plan spanning 5 to 15 years, at a fixed interest rate of two per cent per annum. The developer nearly duped the contributors of more than fifty million naira. In fact, it took the intervention of anti-corruption agencies to get the firm refund contributions of some civil servants who had contributed millions of naira and chose to opt out of the deal.
Against these backdrops, observers have recommended several antidotes. The housing fund contribution should be integrated into the personal income taxation system such that a defined proportion of taxes paid are allocated to the housing fund pool as it is done in some developed countries like Singapore. Though the mass housing scheme of government is good and laudable, the extent to which the efforts have been impactful on the low-income earners leaves much to be desired. Regrettably, much touted benefits of PPP towards effective housing delivery in the country are yet to be realized. Analysts suggest that in addition to funding through regular budgetary and fiscal initiatives, government at all levels need to put in place other measures such as the large-scale securitization of mortgage portfolios, a system that has proved viable and remained the primary growth engineering in the housing finance programme of the France, Italy and United States among others.
While individuals agitate for affordable and decent housing, effective administrative mechanism should be a bedrock initiative so that housing schemes are not turned into a land program rather than a housing program. Indications have emerged that egocentric spirit of some affluent Nigerians and undue capitalist pursuit of many housing developers defeated all PPP policies aimed at providing adequate and affordable housing accommodation for the growing population and this condition may be responsible for the proliferation of slum and squatter settlements in major cities across the nation.