Housing Finance in Nigeria

Overview

Nigeria is divided into 236 states and a Federal Capital Territory, Abuja. A democratic federal system of government is in place which includes an elected president, a bicameral legislature and an independent judiciary. Tightly contested House, Senate, and Presidential elections were held concurrently on 25 February 2023. In August 2023, President elect Bola Ahmed Tinubu allocated portfolios and swore in the new cabinet.[1] Stakeholders in Nigeria’s housing sector commended the appointment of Architect Ahmed Musa Dangiwa as the Minister of Housing and Urban Development, highlighting key areas of intervention for the ministry to boost the sector.[2]

New dates for the conduct of the National Population and Housing Census are yet to be announced. The United Nations estimates Nigeria’s population at 224 600 982, which is the 6^th largest in the world. With the growth rate estimated at 2.41%, Nigeria’s population is expected to reach 262 580 426 by the year 2030.[3] The Nigeria Multidimensional Poverty Index (2022) shows that 51.4% of Nigerians are multidimensionally poor with significant disparities in poverty levels across the country.   The Gini coefficient for Nigeria is 35.1 % in 2022, which is 100th of 163 countries globally.  Urbanisation, unemployment and poverty create additional pressures for the housing sector.

The economic growth rate for Nigeria is estimated at 3.2 % in 2023.[4]  The annual inflation rate was 24.08% in July 2023, the highest since September 2005.[5]  To moderate inflationary pressures, the Central Bank of Nigeria (CBN) has raised its benchmark interest rate for the eighth time since April 2022 from 18.5% to 18.75%.[6]  Economic growth and inflation are anticipated to be impacted negatively by global commodity shocks, the inability to benefit from oil production and high prices, and a depreciating currency.  The exchange rate of the Nigerian naira against the US dollar averaged ₦760.363 to US$1 in July 2023. Continued scarcity of foreign exchange and tighter liquidity could affect economic activity and undermine overall macroeconomic stability.[7]

UN-Habitat estimates that 58.8% of the urban population is living in slums signifying huge demand for affordable and adequate housing with basic infrastructure in urban areas.   Factors affecting the delivery of affordable housing include the high cost of building materials, exchange rate fluctuations and land acquisition. The 17th edition of the Africa International Housing Show (AIHS) took place in Abuja from the 24th – 27th of July 2023. Among other issues, the conference prioritised the need for reliable and timely data to support policymaking and investment decisions in Nigeria’s housing sector.[8] Housing practitioners and stakeholders expressed their commitment through the Abuja Declaration towards ensuring access to green and affordable housing.[9]

 

[1] Adeoye, A. (2023). Nigeria’s president appoints new cabinet. Financial Times.

[2] Uwaegbulam, C. (2023). Operators set agenda for housing minister, list benefits of new ministry. 21 August 2023. The Guardian.

[3] United Nations Worldometer. Nigeria Population (LIVE) as updated on July 16, 2023. https://www.worldometers.info/world-population/nigeria-population/ (Accessed 25 August 2023).

[4] Azeez, W. (2023). IMF upgrades Nigeria’s 2023 economic growth prospects to 3.2%. 01 February 2023. The Cable.

[5]  National Bureau of Statistics Home.   http://www.nigerianstat.gov.ng  (Accessed 25 August 2023).

[6] Tunji, S. (2023). CBN raises interest rate to 18.75%. Punch Newspapers.

[8] Africa International Housing Show (2023). AIHS 2023. https://africahousingshow.com/ (Accessed 30 September 2023)

[9] Africa International Housing Show (2023). Declaration By Delegates to the 17th Annual Africa International Housing Show Held In Abuja, Nigeria Between 24th – 27th July 2023. https://shorturl.at/aqE58 (Accessed 1 October 2023)

Access to Finance

Remittance flows to Sub-Saharan Africa totalled ₦ 40,3 trillion (US$53 billion). Remittances to Nigeria accounted for the biggest portion, around 38% or ₦ 15,29 trillion (US$ 20,1 billion) of total remittance inflows to the region.[1] Recent studies have shown that the housing sector is a key area of the Nigerian diaspora’s interest and financial activity.[2] According to Northcourt, some developers have reported that the diaspora drives 55-65% of effective demand for their projects.[3]

The most recent available data from the Nigeria Inter-Bank Settlement System indicates that the country had 122.3 million active bank customers in 2021.[4]  An analysis of Nigeria’s lending market in 2022 revealed that there are over 100 million adult Nigerians that are potential clients for financial services.[5] Furthermore, designing inclusive financial products for this potential target market requires a nuanced and segmented approach that responds to their financial preferences and behaviours.[6] A particular focus on advancing women’s inclusion is required given that the gender gap is widening.[7]  In 2020, the gender gap for Nigeria stood at 8% higher than Ghana (5%), Kenya (4%), Uganda (1%) and Rwanda (1%) .[8]

Nigerians typically rely on private savings to pay for their homes. Available data from EFInA shows that the majority of formal female borrowers typically save their money to build a house, rental expenses and buy property.

In May 2023, the CBN revoked the licenses of 4 primary mortgage banks and 179 microfinance banks due to non- compliance with rules and regulations. There are 24 commercial banks, 32 primary mortgage banks and 3 non-interest banks operating in the country. According to the CBN, the percentage of non-performing loans in the banking sector stood at 4.4% in April 2023.[9] Interest rates for mortgages range between 15-27% for commercial and primary mortgage banks.[10] The Federal Mortgage Bank of Nigeria (FMBN)—through the NHF scheme—grants mortgage loans with a minimum interest rate of 4% to accredited Primary Mortgage Banks (PMB). PMBs on-lend at 6% to NHF contributors with a maximum mortgage tenor of 30 years.^[11]

The Nigerian Mortgage Refinance Company (NMRC) was established in 2013 to provide long-term funding to mortgage lenders and increase the availability and affordability of housing finance in the country.[12] Refinanced loans by the NMRC grew by 13.8% from ₦21.10 billion in 2021 to ₦24.02 billion within the financial year ended December 31, 2022.[13] According to the Federal Mortgage Bank of Nigeria (FMBN), the number of mortgages is 24 654 amounting to ₦ 140.125 billion (US$ 184.29 million) in August 2023. The average loan size for mortgages ranges from ₦5 million to ₦50 million (US$6 576 to US$ 65 758), while the average loan term ranges from 10 to 30 years. The loan-to-value ratio varies ranging from 70% to 90%. [14]

There are many non-bank financial institutions that offer housing finance such as cooperatives, savings groups, and informal lenders. Products available include home construction loans, land purchase loans and rent-to-own schemes. There are 719 licensed microfinance banks in the country.

The three licensed credit bureaus are CRC Credit Bureau Limited, Credit Registry Services Limited and XDS Credit Bureau Limited.[15] An analysis of Credit Registry Services portfolio found that the average Credit Registry consumer has an outstanding loan of about ₦300 000 (US$394).[16]  The largest value loans taken out by women are to buy land or improve their homes. Moreover, young women aged 18-25 were found to be a promising consumer segment that should be targeted by financial institutions.

Underwriting practices vary—for mortgages, lenders typically require borrowers to provide employment status, bank statements, tax clearance certificates, identification documents, property documents and collateral. Non-mortgage housing lenders use alternative methods such as cash flow analysis, peer assessment, group lending, character references or social collateral.[17]

In September 2022, the National Pension Commission (PenCom) approved the issuance and immediate implementation of the guidelines on Accessing Retirement Savings Account balance towards payment of equity contributions for residential mortgage.[18] According to PenCom (2023), the total amount of pension fund assets invested in real estate for the period ended 31 July 2023 amounted to ₦ 219,276 million.[19] Rating agency, Agusto & Co. has announced the upgrade of the rating assigned to Family Homes Funds Limited (FHFL) from ‘’A’’ to ‘’A+’’.[20]

 

[1] World Bank (2023). Remittances Remain Resilient but Likely to Slow. https://shorturl.at/yG049 (Accessed 1 October 2023)

[2] Bolaji, O (2022). Diaspora finance for infrastructure development in Nigeria: exploring motivations, mechanisms, and impact PhD thesis. SOAS University of London. https://eprints.soas.ac.uk/37272/ (Accessed 1 October 2023)

[3] Northcourt (2023). 2023 Nigeria Real Estate Market Outlook. https://bit.ly/2023NREMO_ (Accessed 1 October 2023). Pg.6

[4] NIBSS (2021). Electronic Payments Factsheet. https://shorturl.at/KX023 (Accessed 26 August 2023)

[5] Rockefeller Philanthropy Advisors (2022). Understanding Women’s Access to Credit and Loans. Pg. 1.

[6] Ibid.

[7] Central Bank of Nigeria and Gender Centre of Excellence (2023). Situational Analysis of Women’s Financial Inclusion in Nigeria. Pg. 19.

[8] Ibid

[9] Central Bank of Nigeria (2023). Central Bank of Nigeria Communiqué No. 148 of the 291st Meeting of the Monetary Policy Committee Held on Tuesday 23rd, And Wednesday 24th May, 2023.

[10]  The World Bank. Open Knowledge Repository Beta: Nigeria: Developing Housing Finance. https://openknowledg e.worldbank.org/handle/10986/25780  (Accessed 26 August 2023).

[11] Federal Mortgage Bank of Nigeria. National Housing Fund Mortgage Loan. https://shorturl.at/nADO1 (Accessed 22 July 2022).

[12]  NMRC. https://nmrc.com.ng/blockchain-powered-technology-system-for-reliable-land-titling/  (Accessed 26 August 2023).

[13] Nigeria Mortgage Refinance Company (2023). NMRC Annual General Meeting 2023. https://nmrc.com.ng/nmrc-annual-general-meeting-2023/ (Accessed 1 October 2023).

[14]  Written response provided by the Group Head Strategy and Performance at Federal Mortgage Bank of Nigeria (FMBN) by letter dated 4 August 2023 and signed by the Managing Director/CE. https://fmbn.gov.ng  (Accessed 7 August 2023).

[15] Credit Bureau Association of Nigeria. https://cban.ng/  (Accessed 26 August 2023).

[16] See footnote 14. Pg. 23.

[17]  Federal Mortgage Bank of Nigeria. Products & Services. https://www.fmbn.gov.ng/Home  (Accessed 26 August 2023).

[18] National Pension Commission (2022). Guidelines on Accessing Retirement Savings Account balance towards payment of equity contributions for residential mortgage.

[19] National Pension Commission (2023). Unaudited Report on Pension Funds Industry Portfolio for the Period Ended 31 July 2023. https://www.pencom.gov.ng/wp-content/uploads/2023/09/July-2023-Monthly-Report.pdf (Accessed 1 October 2023)

[20] Family Homes Funds (2023). Agusto & Co. Upgrades Fhfl’s Rating To ‘’A+’’ With Stable Outlook. https://fhfl.com.ng/news/agusto-co-upgrades-fhfls-rating-to-a-with-stable-outlook  (Accessed 1 October 2023).

Affordability

The employment and income situation is characterised by high informality, low productivity and inequality. Using a revised labour survey methodology, the National Bureau of Statistics reported that the country’s unemployment rate stood at 4.1% in the first quarter of 2023. In Q1 2023, 92.6% of employed persons were in informal employment.[3] With over two thirds of Nigerians estimated to be under the age of 30, a particular focus on youth empowerment offers great potential for the country to take advantage of the demographic dividend.[4] In June 2023, the World Bank approved ₦380.18 billion (US$500 million) to support the Federal Government’s efforts to improve the livelihoods of Nigerian women. The Nigeria for Women Project will be piloted across six states (Abia, Akwalbom, Kebbi, Niger, Ogun and Taraba) and targets to benefit 324 000 women.[5]

Rising food prices, high cost of fuel and the devaluation of the Naira are driving inflation. Effective demand is constrained by low household incomes and competing household expenditures. Nigerians are estimated to utilise over 50% of their household expenditure on food.[6]

A newly built affordable one-bedroom expandable unit of 42m2 developed by MFF is sold at ₦5 560 000 (US$7 312) in 2023.[7]  The average monthly rent paid by tenants was ₦15 000 (US$20) in 2018/19, an increase of 15% from ₦ 13 000 (US$17) in 2015/16.[8] The minimum monthly mortgage repayment rate is 33% and the minimum income required to access a mortgage is ₦30 000 (US$39) per month. [9]

The National Cash Transfer Programme—also known as the Household Uplifting Programme (HUP)—is one of the social safety nets programmes anchored by the federal government.  In response to the rising living costs, the national minimum wage was temporarily increased for a six-month period by an additional ₦25000 (US$32) per month to ₦55 000 (US$72).[10]

With the aim of providing over 300 000 homes and creating 1.5 million jobs across the country, the Family Homes Fund (FHFL) is implementing the Nigeria government’s National Social Housing Programme (NSHP).[11] One of the programmes is a Help to Own (HTO) fund.^[12] This is targeted at first time home buyers who can provide an equity contribution of 10% of the property price. The HTO fund offers a low-cost, deferred equity loan of up to 40% of the home cost, halving the mortgage repayment.

 

[1] National Population Commission (2023). NPC, Ministry of Housing collaborate on veritable housing deficit data.

[2] Moore,E (2021). Addressing Housing Deficit in Nigeria: Issues, Challenges and Prospects. Nigeria. Pg. 205.

[3] National Bureau of Statistics. Nigeria Labour Force Survey Q4 2022 & Q1 2023. Highlights of the report. Pg.28

[4] World Bank (2022). Nigeria Poverty Assessment. Pg. 46.

[5] Nigeria for Women Project. About Us. https://nfwp.gov.ng/about/  (Accessed 1 October 2023).

[6]  Ekanem, S. (2022). NBS data reveals Nigerians spent N7.1 trillion on household expenditure in H1, 2022

17 November 2022. Pulse.ng.

[7] Telephonic interview with Jonathan Anaja Millard Fuller Foundation,9 August 2023, Abuja, Nigeria.

[9] Federal Mortgage Bank of Nigeria. https://fmbn.gov.ng  (Accessed 7 August 2023).

[10] Ewokor, C (2023). Nigeria’s President Tinubu increases wages as national strike looms. BBC.

[11] Family Homes Funds (2023). Help To Own: FHFL Meets Afdb Towards Commencement of Home Mortgage Program For Low-Income Families. https://fhfl.com.ng/help-to-own/

[12] Ibid.

Housing Supply

The 2019 Nigeria Living Standards Survey highlights that most urban households in Nigeria live in compound houses (35.3%), flats/apartments (28.8%) and separate houses (25.9%).[1]  More than 49% of urban households rent while only 32.5% of Nigerians residing in urban areas own their homes.[2]

The quality of basic infrastructure in support of human settlement provision is inadequate and unevenly distributed. According to the World Bank, 85 million Nigerians do not have access to grid electricity.[3] In 2019, 60 million Nigerians were living without access to basic drinking water while 80 million people had no access to improved sanitation facilities.[4] Despite several ongoing federal government initiatives to improve access to basic services, private developers typically pay for infrastructure costs when developing new housing projects. This adds to the cost of housing production and reduces the affordability for potential buyers. [5]

Rising building material prices attributed to inflation and volatile foreign exchange rate continue to hamper housing supply. A standard 50kg bag of cement increased from ₦2650 in 2018 to ₦5 500 (US$7) in 2023. Prices of reinforcements of 10mm diameter increased from ₦220 000 in 2018 to ₦420 000 (US$ 552) in 2022.[6] According to the Nigerian Building and Road Research Institute, Nigeria imported more than 90% of the materials used on building and road construction.[7] Stakeholders in the building and construction industry continue to encourage the federal government to explore local building materials as an effective way of reducing housing costs. The federal government continues to engage with major cement producers, with BUA Cement announcing the reduction of the price of cement from ₦ 5500 (US$7) to ₦ 3500 (US$4.6).[8]

Over 1.4 million people in Jigawa, Taraba, Kano, Bauchi, Adamawa, Niger, Anambra, and Ebonyi State were affected by the recent floods.[9]  The floods have further widened the country’s housing deficit with over 200 000 houses being either partially or fully damaged.[10]

The Federal Ministry of Works and Housing under the last administration delivered a total of 8938 housing units in the eight-year period between 2015-2023. [11] Furthermore, the ministry issued 6 685 Certificates of Occupancy in the same period. In efforts to bridge the housing supply gap, the Federal Mortgage Bank of Nigeria financed and facilitated the construction of several housing estates across Nigeria. Under the National Affordable Housing Delivery Programme, FMBN commissioned 1071 completed housing units in January 2023.[12] Subsequent completed projects under FMBN’s various loan windows projects include 4o4 units in Enugu State, 257 units in Katsina, 180 units in Anambra and 72 units in Ogun State.[13]  As of 2023, FHFL completed over 8 146 homes while creating over 80 000 jobs, had 7 576 under construction, and planned to start construction of an additional 9 240 homes.

The most recent available data shows that the construction sector employed about 6.9 million people in 2012.[14] Under the umbrella of the Real Estate Developer Association of Nigeria (REDAN), many organisations are involved in supplying housing across low-, middle- and high-income categories. REDAN is pushing for the assent of the Real Estate (Regulation and Development) Bill which aims to standardise the business of real estate development in Nigeria by regulating the conduct of transactions in the real estate sector.[15]

 

[1] Nigeria National Bureau of Statistics (2019). Nigeria Living Standards Survey 2018-2019. Pg. 77.

[2] Ibid.

[3] World Bank (2021). Nigeria to Improve Electricity Access and Services to Citizens.

[4] World Bank (2021). Nigeria: Ensuring Water, Sanitation and Hygiene for All.

[5] Uwaegbulam, C. (2023). Developers to spend more on infrastructure, says report. The Guardian.24 July 2023.

[6]  Northcourt (2023). 2023 Nigeria Real Estate Market Outlook. https://bit.ly/2023NREMO_ (Accessed 1 October 2023). Pg. 51.

[7] Africa Housing News (2022).  NBRRI, Other Experts Lament as Nigeria Imports 90% of Building Materials.

[8] Federal Ministry of Information and National Orientation (2023). Housing Minister commends BUA Cement Plc’s decision to reduce Cement Price to N3,500.

[9] NorthCourt (2022). When Deep Waters Rise. (Accessed 3 October 2023).Pg.10

[10] Ibid.

[11] The Guardian (2023). FG delivers 8,938 housing units, 9,290 km roads – Fashola.

[12] Punch (2023). FG unveils 1,071 NHP homes. https://punchng.com/fg-unveils-1071-nhp-homes/ (Accessed 1 October 2023)

[13] This Day (2023). How FMBN is Tackling Affordable Housing Supply Challenge.

[15] Shuaibu,F (2023). Real Estate Bill to Create Jobs – REDAN. Daily Trust.

Property Markets

Despite the macroeconomic challenges, the real estate sector contributed 5.31% to real GDP in Q1 2023, lower than the 5.34% recorded in the corresponding quarter of 2022.[1]  According to the NBS, the negative effects of the cash scarcity experienced in the quarter resulted in the decline.[2] While the devaluation of the Naira holds real estate investment opportunities for Nigerians in the diaspora, analysts argue that homeownership and rental prices are becoming increasingly out of reach for many low and middle income households in the nation’s urban centres.[3]

The surge in rental prices across the country has been attributed to increased costs of doing business for developers and landlords. For instance, NorthCourt reports that average rates of return in the Abuja Phase 2 residential real estate market have sharply declined from 12.84% in 2018 to 3.77% in 2022.[4] It is reported that two-bedroom apartments in Abuja’s outskirts command an average of between ₦800 000 (US$1 052) to ₦1.5 million (US$1 972) per year. [5]  The median rent of a three-bedroom apartment across 15 major cities is estimated to have reached a high of ₦750 000 (US$ 986).[6]  Several property technology solutions are addressing inefficiencies affecting how landlords and tenants transact.

In recent years, some states have initiated reforms to modernise and automate their land registries, including Lagos, Kaduna, Ondo, Edo and Cross River. These states have introduced online platforms for land registration, verification and payment of fees and taxes. In May 2023, the Federal Government unveiled the Electronic Certificate of Occupancy (e-CofO) which aims to reduce the timeframe for accessing land titles and documents from an average of 90 days to a 24-hour period.[7]

The legal framework for the issuance and administration of Certificate of Occupancy in Nigeria is governed by the Land Use Act of 1978. Weak ownership rights under the Land Use Act constrain the development of the country’s housing and mortgage markets. In 2020, the World Bank noted that registering a property in Lagos required 12 procedures, took an average of 105 days and cost 10.8% of the property value.[8] While in the Federal Capital Territory, it required 12 procedures with at least 53 days to register property at a cost of 12.1% of the property value.

Property taxes are one of the main sources of revenue for state and local governments. Property tax collection rates vary widely ranging from less than 10% to over 70%. Factors that affect property tax collection rates are poor registration and assessment systems, poor levels of compliance and enforcement, non-availability of incentives and exemptions and opaque accountability of tax administration.

There are both formal and informal estate agents. Formal estate agents are registered by the Nigerian Institute of Estate Surveyors and Valuers (NIESV) and the Association of Estate Agents. Informal estate agents operate without any formal registration or regulation and include individual brokers, middlemen, touts or friends and relatives of property owners or sellers.

 

[1] National Bureau of Statistics (2023). Nigeria Gross Domestic Product Q1 2023. https://shorturl.at/dDRUZ  (Accessed 30 September 2023). Pg. 17.

[2] Ibid.

[3] Uwaegbulam,C. (2023). Why Nigerians can’t afford homes despite N20 trillion real estate contributions to GDP. The Guardian.

[4] Northcourt (2023). 2023 Nigeria Real Estate Market Outlook. https://bit.ly/2023NREMO_ (Accessed 1 October 2023). Pg. 46.

[5] Alexander,E. (2023). Rising Cost of Rent in Abuja: Can the Poor Breathe? https://shorturl.at/mGLSW (Accessed 4 October 2023).

[6] Ogundeji, J. (2023). Median rent hits N720,000 in Lagos, 10 states. Punch Newspapers.

[7] Vanguard (2023). Fashola inaugurates electronic C of O, says can be accessed within 24hrs.

[8] The World Bank (2020). Doing Business Comparing Business Regulation in 190 Economies. Pg. 181.

Policy and Legislation

The country’s housing policies are under review to ensure that they are in alignment with the Renewed Hope Agenda of President Bola Ahmed Tinubu.[1] The Renewed Hope Agenda outlines the new administration ‘s intention to work with “with the National Assembly and state governments to review and revise the Land Use Act.”[2] The Federal Government is finalising the Revised National Urban Development Policy which aims to provide strategic vision and direction for urban development.[3] Furthermore, the Ministry of Housing and Urban Development intends to collaborate with the Nigerian Institute of Town Planners in the formulation and review of urban planning policies.

In synergy with public, private and civil society stakeholders, the Housing Development Advocacy Network (HDAN) lobbies and advocate for policy and legislative reforms on key issues affecting the development of the country’s housing sector. This includes calling for the immediate passage of at least 11 housing and mortgage related bills pending before the National Assembly.[4] In addition, stakeholders and housing practitioners continue to lobby and advocate for the Federal Government to promote an enabling environment for the private sector to contribute to housing delivery.[5] The Oyo State House of Assembly passed the State Land Control and Administration Bill 2023, which sets “standards for land agents, persons into real estate business and prescribes procedures to acquire and use land in the state.” [6] The Nigerian Mortgage Refinance Company (NMRC) continues to drive  the adoption of  Model Mortgage Foreclosure Law (MMFL). The law is aimed at eliminating the barrier of foreclosure and boost investor confidence.

The country’s updated Nationally Determined Contributions (NDC) pledges to reducing Greenhouse gas emissions in 2030 by 20%.[7] For the residential sector, the plan targets to have 26.8 million households using LPG and 7.3 million households using improved cookstoves by 2030. Mainstreaming the 2016 Building Energy Efficiency Guideline for Nigeria in the planning and construction of housing offers potential to designing more energy efficient buildings. [8]

 

[1] Federal Ministry of Information and National Orientation (2023). Dangiwa positioning Housing Ministry for optimal Housing Delivery.

[2] APC (2023). Renewed Hope Agenda. https://apc.com.ng/img/apc_renewed_hope.pdf (Accessed 2 October 2023) Pg.25

[3] Aina,D (2023). FG plans new national urban development policy. Punch Newspaper.

[4] Ayeyemi,D (2023). HDAN, others task 10th assembly on pending housing, mortgage related bills. Nigerian Tribune.

[5] Gbonegun,V (2020). Group asks FG to keep off direct construction of houses. The Guardian.

[6] Akinselure, W (2023). Unregistered estate developers, land agents risk two-year imprisonment, N1m fine.

[7] Federal Government of Nigeria (2021). Nigeria’s First Nationally Determined Contribution – 2021 Update.Pg.  17.

[8]Centre for Social Justice (2016). Budgeting For Climate Change in The Housing Sector.

Opportunities

Through the Enumeration Area Demarcation (EAD), the National Population Commission has captured the information and geo-coordinates of all buildings in the country, totalling 65.47 million buildings.[1] The forthcoming National Population and Housing Census represents a critical opportunity for the collection, collation and dissemination of data that accurately characterizes Nigeria’s housing sector.

To broaden access to affordable and adequate housing, there is scope to give more attention to non-mortgage finance which has the potential to support existing incremental building practices. There are opportunities for lenders at the lower end of the market particularly in respect of products and services that better suit income and risk profiles at this end of the market, such as easier applications, flexible repayments, lower interest rates, transparent transactions, and alternative collateral.

Exploring the production and usage of good locally sourced building materials holds great potential in significantly reducing housing costs and creating additional employment opportunities in the country. To this end, the National Building and Road Research Institute (NBBRI) and Raw Materials Research and Development Council (RMRDC) play a key role in driving the research and development agenda that will promote evidence-based interventions and adoption. Skills development and training of local construction and building artisans will improve the overall construction and maintenance of housing in urban areas.

Examples of innovation

An umbrella body of real estate developers in Nigeria, the Real Estate Developers Association of Nigeria (REDAN) has over 1 000 members across the country and has been in existence since 2002. The scheme aims to provide home ownership opportunities for Nigerians at their local government of origin, state of residence or anywhere of their choice. The units are sold to home buyers. The target market of the project is low and middle income earners, especially civil servants. The scheme also targets first time home buyers, who may not have access to conventional mortgage finance.

The project aims to develop 100 housing units within each of the 774 Local Government Areas within Nigeria (i.e. a total of 77 400 housing units) including the FCT, where feasible and viable. The housing units will be of various typologies, ranging from one-bedroom apartments to four-bedroom block of flats. The prices of the units range from ₦2.5 million (US$3 288) to ₦13 million (US$17 097), depending on the location and house type. Funding will be from the Shelter Afrique or Family Home Funds or some other readily available and concessionary finance to enable affordability.

The project is underway. The number of units occupied or delivered is not readily available, but the project has received positive feedback and interest from potential buyers and stakeholders. The project is designed to be energy-efficient, eco-friendly and smart, with features such as solar panels, rainwater harvesting, and biogas plants. The project will also use alternative building technologies and materials that are locally sourced and produced, such as interlocking bricks, compressed earth blocks and bamboo. The project provides flexible payment plans and mortgage options for buyers through various financial institutions that partner with REDAN.

Availability of Data on Housing Finance

Data custodians relating to housing finance in Nigeria are: the Central Bank of Nigeria (CBN),  National Population Commission (NPC), National Bureau of Statistics (NBS), Federal Mortgage Bank of Nigeria (FMBN), and the Nigeria Mortgage Refinance Company (NMRC).

The main data challenges or data gaps for housing finance in Nigeria include amongst others, the lack of reliable and comprehensive data on housing supply and demand, housing affordability, number of title deeds issued, number of employees in the real estate sector, number of mortgages declined, informal housing finance, climate resilience and gender disaggregation. This data is either not collected, updated, standardised, accessible, or  harmonised across sources or regions, or is collected but not made publicly available or accessible online.

The data sources for climate issues related to housing are the National Environmental Standards and Regulations Enforcement Agency (NESREA) which monitors environmental compliance and enforcement, the Nigerian Meteorological Agency (NiMet) which provides weather and climate information, the Nigerian Hydrological Services Agency (NIHSA) which provides hydrological information and the National Emergency Management Agency (NEMA) which provides disaster management information. However, this data is scarce and fragmented or not integrated with housing data or analysed from a housing perspective.

See: https://ruhi.redan.org.ng  and https://redanonline.org

 

Websites

Association of Housing Corporations of Nigeria (AHCN): https://housingcorporations.com/

Nigerian Institute of Building (NIOB): https://www.niobnat.org/

The Nigerian Institute of Architects (NIA): https://niarchitects.org

Nigerian Institution of Estate Surveyors and Valuers (NIESV): https://niesv.org.ng

Nigerian Building and Road Research Institute (NBRRI): https://nbrri.gov.ng

Council for the Regulation of Engineering in Nigeria (COREN): https://coren.gov.ng