According to the Central Bank of Nigeria (CBN), Nigeria’s housing deficit has always been on the rise. In 1991, it was seven million, and it rose to 12 million in 2007, 14 million in 2010, and 20 million units in 2019. The Federal Mortgage Bank of Nigeria has revealed that the figure is currently pegged at 28 million units as of January 2023. This means that at least 28 million people are homeless. This is a cause for concern especially since costs of building materials are also skyrocketing.
This current situation known as a housing deficit occurs when a country’s housing units are in limited supply. Some of its causes include lack of favorable government policies, high cost of construction materials, high property costs, and a lack of access to credit facilities for potential homeowners. Housing is essential, next to food and clothing. Its availability is critical to the well-being and productivity of the people. The lack of it affects people’s health, safety and their ability to access education as well as some essential services.
Housing deficit has got worse over the years.
In Nigeria, access to affordable housing has remained a dream to both the government and the people. Most Nigerians who spoke to the media on the increasing cost of building materials believe that most policy makers are viable and can afford any standard of building regardless of its cost and maintenance, and so they will not legislate on it. This has also been the sentiment of the general populace especially on lawmakers in the two legislative chambers. Many also refer their long list of allowances and bonuses as testament of their unwillingness to support such bill.
Continuing on, in the same vein, the president of Building Collapse Prevention Guild (BCPG), Mr. Sulaimon Yusuf, believes that the moment the cost of building materials drops and government makes land available for developers, there will be much affordable buildings for Nigerians. He said that when there are more houses than the people looking to acquire them, the prices will reduce. This is simply the law of demand and supply, which states that the more the supply, the lower the prices go.
Increased building costs due to a number of factors.
A local who had spoken to newsmen said that the high cost of construction is due to a number of factors that include high cost of labour, the high cost of raw materials, and the high cost of land. He further said that high cost of construction is also due to the low productivity of the construction sector, which results in higher costs per unit of output. In other words, the number of houses that should be produced in a particular amount of time are actually way higher than the houses built. This means that more money and time is spent building less units of houses, and the costs are passed down to the home buyer or the tenants.
This issue has led to an increase in mortgage fraud as well as increased economic inequality. However, there are some policies that can be adopted by policymakers that would help mitigate the negative effects of the high cost of construction. According to this person, one of such is to invest more heavily in constructing more affordable housing units through an investment-led approach, which would involve borrowing money at cheaper rates than the rates at which it lends to private developers.
Other policies to mitigate the housing deficits.
Another solution would be for policymakers to cut down the power tariffs charged by state governments, while another solution is for policymakers to adopt sound economic policies such as expansionary monetary policy and fiscal consolidation, which will lead to lower interest rates on loans from commercial banks. A property developer in Anambra noted that the government has taken some steps to address the high cost of building materials, including reducing the cost of import duties on some materials and increasing local production. However, more needs to be done to make building materials more affordable and accessible to Nigerians.