Government should empower mortgage banks to provide affordable housing for Nigerians

Labour impact assessment studies in countries with similar demographics and economies as Nigeria estimate that no fewer than five direct jobs can be generated with every new home, and two indirect jobs in housing-related expenditure. Hence, mass housing projects can help in mitigating the unemployment problem in the country. But many Nigerians do not believe that the approach being suggested by the Federal Housing Authority (FHA) is the way to go. At the groundbreaking ceremony of the Golden Jubilee Estate at Mbora district recently in Abuja, the Chief Executive of the Federal Housing Authority (FHA) Gbenga Ashafa was in expansive mood, waxing lyrical about “a performing agency.” Not many people will buy into Ashafa’s position regarding the agency’s performance in the discharge of its functions.

Created under the National Development Plan in 1973, the FHA is essentially mandated to coordinate, drive, and execute government housing agenda to the low, medium, and high-income groups. Over the years, FHA has been able to deliver thousands of housing units across the nation, despite obvious challenges. The Jubilee estate being built in partnership with Nugga Best Regis International, marks 50 years of FHA’s existence, and will be adding about 7000 units of different house types to the national housing stock on completion. As a further memorial, the agency intends to build additional 20,000 housing units of different types across the six geo-political zones in the country. There are other ongoing housing projects like the Zuba Housing Estate, Bwari, the Smart City/ Diaspora Estate in Maitama Abuja, Yenagoa Housing Estate in Bayelsa State, and many more. Even so, public housing in Nigeria accounts for less than 10 per cent as most Nigerians are dependent on the informal sector for their housing needs.

However, what is worrying is that many of the old estates built by the FHA are in bad shape: they are ill-kept and ill- maintained. Many are increasingly falling into slums. Perhaps the most prominent among them is FESTAC Town, initially dubbed “little London”. Built with substantial resources to house participants of the Second World Festival of Black Arts and Culture of 1977, the federal government allocated the houses and landed property to winners, after a ballot. Like Gowon Estate (Ipaja Federal Housing Estate also in Lagos}, initially built for FESTAC, it is seedy with plenty of crimes. The sewage system in both estates has collapsed leading to constant outflow of sewage. Last year Ashafa instructed the agency’s Southwest Zonal management to explore private sector funding to stem the infrastructural decay in the estates. But nothing came out of it, as the estates continue to deteriorate.

Developments in Nigeria contrast with some other climes where public housing contributes largely to social engineering. In the United Kingdom for instance, there are council apartments built and either sold or let to individuals. The councils maintain, collect rents, and administer sales mortgages. Unfortunately, the local governments in Nigeria have been rendered prostrate by the governors. But like several other areas, the federal government should keep its hands off retail housing provision as they are far too removed from the people. What should be done is to empower both the Federal Mortgage Bank of Nigeria (FMBN) and the Nigeria Mortgage Refinance Company (NMRC) for the task of providing affordable housing to Nigerians.

There are already existing examples to draw from. At the industry level, there are houses built and owned by private people and companies. These constitute the housing stock and determine the supply and demand of housing in an open market. But they are very expensive with short-term mortgages being financed by banks. This is an area the FHA should work on with other stakeholders if it is to fulfill its mandate to Nigerians.