It has been postulated that Nigeria’s rapidly expanding population poses both favorable and undesirable implications, including the potential for a massive market and robust human resources as well as rural-urban migration, poverty, low purchasing power, the strain on basic utilities, and an infrastructural gap. Considering that almost half of the country’s population is impoverished, the extremely impoverished are identified as not being able to afford housing or even the most fundamental of comforts. With these sorts of societal and economic hurdles, Nigeria’s goal of inclusive and sustainable development seems more and more out of reach.
Unabated poverty, inequality, and deprivation have had a negative impact on housing standards throughout the nation. Many people in Nigeria still struggle to find housing that is both economical and suitable. Rising rural-to-urban migration is taking a toll on already overburdened social services in urban areas, making this problem even more challenging to address. According to the International Human Rights Commission (IHRC), more than 28 million Nigerians do not have access to quality and affordable housing; thus, the scale of the problem is clearly obvious.
Less than one in ten Nigerians with housing aspirations can afford one.
Moreover, the Federal Mortgage Bank of Nigeria (FMBN) estimates that the nation would need at least 28 million housing units to meet the housing shortage. Moreover, the housing shortage is recognized as a long-standing issue stretching back years. Starting at 7 million in 1991, Nigeria’s housing shortfall has steadily increased to 12 million in 2007, 14 million in 2010, and finally, 28 million in 2022. Several causes contribute to the problem of a nationwide shortage of homes, one of which is responsible for this trend.
Poverty, rising building expenses, an inefficient mortgage system, and a rising urban population are all recognized as major contributors to the shortage. With increasing inflation and falling household incomes, it has become nearly impossible for many Nigerians to own a home of their own. Less than one in ten Nigerians with housing aspirations can really afford to buy one, according to a 2019 survey. Considering the scale of our economy, the estimate is woefully low compared to 72% and 78% in the US and UK, respectively.
Nigeria would need N21 trillion to address the housing shortage.
Notwithstanding the massive scale of the housing shortage, there is substantial evidence that Nigeria can improve the situation around, minimize the deficit, and sustainably meet the demands of its citizens. According to the Federal Mortgage Bank of Nigeria (FMBN), Nigeria would need to invest N21 trillion to address the country’s housing shortage. This, however, shows without a doubt that more work is required to strengthen the government’s stride. As a result, efforts to tackle the problems will need coordination between the government and the private sectors.
The government should push for and actively encourage private investment in the housing sector, considering that only the private sector can raise the amount of money needed to close the deficit. It is also widely believed that private entities can make the necessary long-term financial commitments. Low-cost housing plans that can accommodate a significant percentage of the economy, particularly those in the formal sector, may be provided through government collaboration with the private sector in addition to private sector-led investments.
Gov’t needs to address the current inflation rate in the country.
On the government’s part to encourage private sector participation, an enabling environment should be promoted by offering incentives like tax rebates and streamlining land administration and management. In addition, an effective credit system and mortgage reform are also essential for attracting the most capital to the industry. More importantly, the government needs to address the current rate of inflation, which has directly contributed to a rise in the price of building supplies and a general decrease in household incomes.