Causes and Consequences of Housing
Policy Failure in Nigeria
Afolabi Aribigbola (PhD,
Department of Geography & Planning Sciences
Adekunle Ajasin University
Purpose of Paper
Housing Situation in Nigeria
The Study Area and Methods
Housing Policies in Nigeria
Housing policies Failure
Causes of the Failure
Consequences of the failure
Recommendations and Conclusions
Deteriorating housing conditions in the urban areas of developing societies
Design of housing policies to combat the problem
-First attempt- 1920s
-Provision of Staff Quarters
-Direct construction of houses etc
-Introduction of National Housing Policy (NHP) in 1991
-New National Housing Policy (NNHP) in 2002.
Highlights of housing policies in
- Their failures
-Identify its consequences
-Recommendation to improve the housing policy
Dewar (1979) reveals three common interrelated failings
-Various parts of policies not co-ordinated;
-Housing is only partially and not synoptically perceived
-Policies seen as mechanisms for the generation of physical products
Hindrances in the industry include;
-Accessibility to land
-Cost of building materials,
-Cost of infrastructure,
-Cost of labour
-Uncontrolled inflationary trend.
Massive housing shortages
Estimates of annual housing unit required vary from 144,000 (Ekueme,
1999 ) to 300,000 units (Nigeria, 1980)
1991 specify 8 million housing units by the year 2000 AD
Recent estimates t 16-17 million units
In 2010 eighty-five percent of the urban population lives in rented accommodation, spending more than 40% of their income on rent7.
Of these, 90% are self-built and this is mainly due to lack of mortgage financing, and less than 5% have formal title registration.
Informal housing is most prevalent as more than 80% of the population lives in settlements that are unplanned with poor living conditions.
In the rural areas, people live mostly in mud buildings
Acute shortage of dwelling units, resulting in overcrowding, high rents, poor urban living conditions, low infrastructure services, deteriorating environment, increasing poverty and rise in urban insecurity
The study location is Nigeria
-Nigeria is located in the West coast of Africa
-A federation of 36 states and A Federal Capital Territory(
-774 Local Government Areas (LGAs).
-250 ethnic groups
- Most populous country in Africa
-Has a population of 30.4 million in 1952
-55.7 million in 1963,
-88.9 million in 1991
-102.3 million in 1996
- Over 140million in 2006
-Estimated to be about 167 million in 2011
-Urban population increased from 10% in 1952 to 48% in
-Housing policy is regulated by Federal Ministry of
Lands, Housing and Urban Development.
-Two implementing agencies
-Federal Mortgage Bank of Nigeria (FMBN)
-Federal Housing Authority (FHA)
-36 states State ministry of housing
-Housing corporations focus on the supply of middle-income housing.
-About 10.7 million houses in Nigeria (There is still a dearth of housing)
Quantitative: Secondary data sources from government publications and other documentaries etc.
Public intervention in housing in Nigeria began in Lagos in the 1920s.
-Between 1900 to 1960 provision of quarters
Housing delivery in two areas
-Federal Low-Cost Housing Project (1972-1979, and 1975-1983)
-Site – and – Services Programme (1984 –1988)
-National Housing Programme based on the concept of affordability and citizen participation in 1980.
Ultimate goal of ensuring that all Nigerians owned or had access to decent housing accommodation at affordable cost by the year 2000AD.
Created a two-tier institutional financial structure,
Primary Mortgage Institutions (PMIs)
Federal Mortgage Bank of Nigeria (FMBN)
Workers to contribute 2.5 of their monthly income
Commercial and Merchant Banks FMBN to contribute 10 per cent of its non-life funds and 40 percent of its life funds to FMBN.
Provided for borrowing up to five times of taxable income
Assigned responsibilities to the three tiers of governments
The recognition of the growing housing problems in both the rural and urban areas of Nigeria
Primary goal of ensuring that all Nigerians own or have access to decent, safe and sanitary housing accommodation at affordable cost with secure tenure through private initiative, that is Real Estate
Developers on the basis of mortgage financing.
Transition from government-built to privately developed housing
Estates built in the 1950s and 1960s were sold to private individuals
Emergence of Real Estate Developers Association of Nigeria
Amortization period for NHF loan repayment increased from 25 to30 years,
Loan repayment period for developers is 24 months.
Interest rates to PMIs reduced to 4 % from 5 %
Lending rates to contributors reduced to 6 % from 9%
Permitted gradual withdrawal of contributors
Establishes pilot project -construction of 40,000 housing units per annum
Housing Policies Failure in Nigeria and its
Achievement level of the policies has been low.
1991 NHP projected national housing need of 8.2 million
Only one million housing units or about 12 percent were built
Policy envisaged that people should not spend more 20% housing
20% monthly income not adequate for loan repayment in 30 years.
2002 policy is targeted at those on grade levels 13 and above.
Policies focus on contributors to the scheme alone
75 percent of the dwelling units in Nigerian urban centres
No evidence of efforts made to upgrade housing as specified in the policies.
Citizens are expected to access loan housing through the PMIs.
287 PMIs were licensed to operate the N.H.F
232 of are located in Lagos state alone.
No PMIs in several states
46 PMIs accredited to access NHF loan
28 (61percent) of the PMIs are concentrated in
Lagos state alone.
Only 14 states and Abuja have accredited PMIs.
The other 22 states are without PMIs
Many PMIs have collapsed because of wide spread distress in the financial sector
Number of PMIs Percentage (%)
S/No 2002 2008
NHF Fund Base # 10.3bn
Average Contribution #5,550.50
Av. Contribution/State #3.43bn
Weak Mortgage finance System
Lack of Social Housing
Low participation by both contributors and states
Lack of basic facilities and infrastructure
Large proportion of urban population remain deprived of basic services
Deteriorating housing quality
Inadequate dwelling units
Growing housing affordability problem
The two housing policies introduced have failed to improve housing.
There is growing problem of affordability, deterioration housing conditions and overcrowding.
The consequence of very grave unless drastic and concerted efforts are made to redress situation.
There is therefore a need to revisit the housing policy to assist the poor who are in the majority.
Introduce social housing and ensure that adequate funds are allocated to the sector with thorough supervision.
Full dependence mortgage financing and unfettered market mechanism cannot be expected to produce the desire outcome of providing adequate housing.