Experts within the Nigerian Housing industry have expressed concerns that the allocation by the Federal Government in the 2024 budget for the sector might fall short of meeting the substantial housing demand from potential homeowners and subscribers.
They also noted that the allocation would be inadequate to urgently reform, provide infrastructure and increase stock, as the skyrocketing cost of building materials will affect the performance of contractors under the National Housing Programme (NHP), maintenance and operation of public buildings.
President Bola Tinubu recently signed the N28.7 trillion 2024 budget into law. A breakdown of the appropriation bill revealed that capital expenditure will gulp N9.99 trillion (35 percent of the budget), while recurrent expenditure components is N8.77 trillion, which is 30per cent of the budget.
Out of the N28.7 trillion proposed expenditure, the Federal Ministry of Housing and Urban Development got a total allocation of N99, 982,577, 351 billion, which N96, 996,742, 132 billion is reserved for capital projects, N682, 686,111 for overhead cost and N2, 303,149,108 for personnel cost respectively.
In the breakdown, the ministry provided N18.19 billion for the construction of 20,000 units under the renewed Hope Agenda housing scheme, while N1.8 billion has been set aside for the establishment of local building material manufacturing clusters in the six geopolitical zones of the country.
Also, N4.1b would be spent to upgrade slums in 24 locations across 18 states. The project will provide the selected slums water supply, solar streetlights, rehabilitation of access roads, and construction of drainages, waste management and sanitation services. Other priority includes completion of the construction of NHP in 35 states, and completion of ongoing construction of Federal secretariats in 11 states, which are at various stages of completion.
According to the United Nations, the housing situation in Nigeria is in dire situation and homelessness abounds across the country due to poor infrastructure and lack of access to housing loans, difficulty in obtaining property titles and high cost of land. These have created the necessity to reform the laws and adequately fund housing activities in the country.
Speaking on the housing budget, the Executive Secretary, Association of Housing Corporation of Nigeria (AHCN), Mr. Toye Eniola, said the budget would not address the present shortage of housing in the country. He said there might be an improvement on the last administration’s performance, which delivered less than 5,000 housing units.
However, he said Nigeria seems not ready to address its housing deficit, particularly the needs of middle and low-income earners. “In the budget, the Ministry of Police Affairs got about N938 billion, while the Ministry of Housing and Urban Development got a paltry N99. 92billion. If you look at it critically, you will discover that it is only N18 billion that is going into construction of 20,000 housing units, which is a drop in the ocean in view of the deficit.
“The budget is not going to have any impact. Nigeria should be talking about nothing less than 100,000 units per year. It may not even make much impact, whereas in other places like Egypt, last year, they built one million housing units in a year. What are 20,000 housing units when compared to that,” he said.
Eniola stated that those feeling the effect of housing shortages are the low-income earners. “If you are not addressing their needs, you are not addressing housing because the high-income earners don’t have a problem, they have the money to put a roof over their heads. In the ministries, civil servants who have worked 20 to 30 years, from level one to eight are retiring to their villages because they don’t have anywhere to put their heads,” he said.
He said the government needs to embark on a rental housing scheme for the low-income group with the option that the people can own such houses at the end of the day to resolve housing shortages.
“Prices of building materials are skyrocketing because the Federal Government has not come up with a positive policy that will address the situation. The issue is about foreign exchange, which is driving the economy, and the government doesn’t have any solutions to tackle it, adding that without addressing the issue, it will be difficult to curb rising cost of houses.
“As of January 2023, exchange of $1 to naira is N400 but by January 2, 2024 a $1 to naira is about N1, 200. The manufacturers of the building materials will tell you that they depend on foreign input to bring in their materials. As long as they still depend on foreign exchange, we don’t have a solution in sight,” he argued.
He, however, suggested that the government should start developing the nations’ local building materials for production of houses, with at least 20 per cent local inputs in the housing production process to address the rising cost of building materials.
A Professor of Estate Management at the University of Lagos, Austin Otegbulu, said in the face of lean resources, funding of critical sectors of the economy like housing and others will continue to be a great challenge. He observed that the housing supply is being improved upon at minimal level.
However, Otegbulu said, there was need for an appropriate housing census to determine the present housing stock, to determine what is needed by the low-income, middle-income group, civil servants, petty traders and high-income cadres, as well as how to easily make the houses available to them.
He said: “In reality, most civil servants cannot afford to buy the so-called low-cost housing even over a long period of time. The cheapest you can get now is about N20 million. The salary of a university professor per year is about N6 million, not to mention civil servants from level one and above, who earn less. It is a popular view now that the only way a civil servant can build a house is either through corruption or if he/she does other businesses outside the regular income source.
He further urged the government to subsidise housing for the low-income and adopt technology that will allow subscribers to own partially completed houses. Otegbulu also wants the government to provide a site and services scheme, by providing infrastructure and allocating such sites to civil servants to build at their own pace.
He also emphasised the need to engage professionals like estate surveyors and valuers in implementing policies, particularly maintenance of public buildings to ensure long life span. According to him, there should be a budget set aside for such a purpose.
Former Chairman, Nigerian Society of Engineers (NSE) Apapa branch, Dr. Garba Ombugadu, said the government over the years has not developed housing for the benefit of the citizens, which has led to homelessness among many Nigerians.
He stressed that the little money budgeted for housing is not utilised as expected. “From the face value of the allocation for capital projects in this year’s budget, one can say it is grossly inadequate considering our huge housing deficit. Even with the few houses that are available, the costs are high and when you relate it with cost of living and wages; you will know that a typical Nigerian is suffering,” Ombugadu said.
Regardless, he said the little allocation for the sector must be well utilised as approved for housing projects and for the benefit of Nigerians, adding that sometimes budgets are made and never implemented.
For him, the government must be deliberate in developing the housing sector through a systematic master plan, which must be followed until set out goals are achieved. “If the government plans to build 20,000 units of two- and three-bedroom flats for the citizens, next it should double it and before you know it, the deficits are reduced consistently.
“Government must be deliberate in allocating funds for housing for the citizens. Also, the problem of abandoned projects must be addressed. Government must pay contractors to deliver projects to avoid contract variations often caused by skyrocketing prices of construction materials,” Ombugadu added.
A past president of the Nigerian Institute of Building (NIOB), Mr. Kenneth Nduka, lauded the Federal Government for embracing continuity as the housing landscape was before now dotted with uncompleted projects.
He observed that in the past while trying to site housing projects across the country, the government neglected certain critical factors like culture of the people, demography, and fit for purpose, stressing that housing locations were decided based on political considerations that do not serve the purpose of the housing deficit.
He further said the oversight functions of monitoring the housing development should be that of ensuring the proposed housing units are delivered within the specified time frame to create motivation for housing in 2025 budget to be geometrically increased.
Source: The Guardian
