Housing Finance in Nigeria


This profile is also available in French here.

To download a pdf version of the full 2022 Nigeria country profile, click here.

Nigeria is anticipated to be the world’s third-most populated country by 2050, with over 300 million people, due to its rapidly rising population. Urban regions are home to more than half (53%) of Nigeria’s estimated population of 216 883 577 people.The majority of the urban population lives in slums, with 33% of the overall population jobless and a housing shortage of 28 million units. Urbanization, population expansion, poverty, and high unemployment have all put pressure on the country’s real estate sector and its capacity to provide enough housing.

Nigeria’s economy is on the verge of collapsing as a result of spiralling inflation and a decline in revenue and foreign exchange earnings following COVID-19. Inflation is at its highest level in more than five years, owing to rising food prices, high diesel prices, and naira depreciation. In the first quarter of 2022, real GDP grew by 14.66%, indicating a slowing of economic activity.

Approximately 45% of adult Nigerians borrow from the formal sector. However, 98% of Nigerian women were left out of the formal credit market, unable to secure loans from formal financial institutions like banks. This lack of borrowing power among women was largely attributed to low education and limited decision-making power.

In 2021, the number of outstanding mortgages in Nigeria was 32,608. The Federal Mortgage Bank of Nigeria (FMBN) offers mortgage interest rates ranging from 6% to 28.3%. Mortgage loan loan-to-value ratios range between 70% and 90%. Between 2005 and October 2021, an estimated 1 trillion dollars (US$2.4 billion) was disbursed to consumers by approximately 887 licenced microfinance banks.

From a housing supply perspective, Nigeria’s high dependency on imported building materials allows the construction sector to pass through the effects of exchange rate depreciations. In 2021, Nigeria spent over 386.3 billion (US$930.2 million) on importing iron and steel. To reduce building construction costs, the federal government partners with major cement producers to sell cement at a discount.

A newly constructed cheap one-bedroom expandable flat of 42 m2 costs 3.9 million naira (US$9,319 per month) and is rented for 15 000 naira per month.However, because of high unemployment and poverty, most of Nigeria’s urban population lives in slums. The strategy calls for yearly NHF contributions to rise from US$118 million in 2018 to US$686 million by 2024.

In terms of opportunities, there are some real estate investment platforms like Keble and Propcrowdy that offer investors the opportunity for fractional ownership of rental income-generating properties.

Find out more information on the housing finance sector of Nigeria, including key stakeholders, important policies and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2022 edition, which has up-to-date profiles for 55 African countries.

Download yearbook
Neighbouring Countries Benin Cameroon Chad Niger
View more
View more
View more
View more
View more