In 2023, the housing sector in Nigeria experienced notable progress due to the policy declarations and initiatives of the federal government. Despite this, persistent challenges such as unverifiable deficit figures and the soaring cost of construction materials continued without resolution.
The sector recorded some notable achievements, indicating positive momentum in the industry. However, there is still considerable room for improvement.
One major accomplishment in 2023 was the increase in affordable housing options. The government’s efforts to address the housing deficits have yielded positive results, with more affordable housing schemes being introduced.
In the year under review, the Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa, disclosed the intention of the federal government to construct 10,000 housing units in the Federal Capital Territory (FCT). He also disclosed that the government had perfected plans to construct 34,500 homes across named:’ Renewed Hope Cities.
A review of the year indicates that despite the noticeable challenges, some real estate developers also performed optimally in the delivery of housing units for Nigerians.
This medium recalls that in November last year, Dangiwa inspected the 1,250 Brains and Hammers Estate in Jibi, Abuja, which was funded by the Federal Mortgage Bank of Nigeria (FMBN).
Major events
In 2023, the administration of the immediate past president, Muhammadu Buhari, inaugurated 1,071 completed houses in eight project sites nationwide.
The houses were constructed under the National Housing Programme. The scheme
Also, before his administration wound down, Nigeria occupied the chairmanship position of Shelter Afrique, which is the only pan-African finance institution that exclusively supports the development of the housing and real estate sector in Africa.
At that time, the immediate past Minister of Works and Housing, Mr. Babatunde Raji Fashola, represented Nigeria on the board before the current Minister of Housing and Urban Development, Dangiwa replaced him at the Algiers, Algeria, during the 2023 Extraordinary General Meeting (EGM) of Shelter Afrique.
The last administration also automated the process of collecting certificates of occupancy. The process, which was spearheaded by Fashola, is the digitisation of the federal lands registry. This, according to him, will help to increase the value of lands, stating that Nigerians can now get land title documents in 24 hours.
However, the current administration of Bola Tinubu approved the construction of 34,500 homes nationwide to boost access to decent, quality, and affordable housing for all Nigerians.
He said the project code-named “Renewed Hope Cities” would comprise one to three-bedroom bungalows and multi-level flats catering to the housing needs of low and medium-income earners.
Equally during the year under review, the Federal Government and a consortium signed a Memorandum of Understanding (MoU) for the construction of 100,000 housing units across the country under a Public Private Partnership (PPP).
The consortium consists of Continental Civil and General Construction Company and CEEZALI Limited.
FHA@50
In 2023, the Federal Housing Authority (FHA) marked its 50 years of existence and laid the foundation for the construction of 7, 000 housing units named FHA Golden Jubilee Estate at Mbora District along Tundun Wada, Lugbe Federal Housing Estate, Abuja.
However, the managing director/chief executive of FHA, Senator Gbenga Ashafa, who spoke at the groundbreaking ceremony of the Golden Jubilee Estate in Abuja, said 1, 200 housing units would be executed in the first phase of the project.
EFCC’s pledge to fish out unlicensed real sector practitioners
The real sector, which is reportedly a conduit pipe caught the attention of the Economic and Financial Crimes Commission (EFCC), and the agency promised to partner with the Institute of Mortgage Brokers and Lenders in Nigeria (IMBLN) to get rid of fraudulent, unlicensed, and quacking in the mortgage industry.
The director, the Special Control Unit Against Money Laundering (SCUML), Daniel Isei, gave this commitment while speaking at the Mortgage/Real Estate Conference held in Abuja.
Challenges
In 2023, subsidy removal and inflation affected the sector with many realtors incapacitated with the development.
Figures from the National Bureau of Statistics (NBS) indicate that Nigeria’s headline inflation rate surged to 27.33 percent in October from 21.82 percent in January 2023, a development that in turn impacted heavily on prices of building materials, housing, and rents.
Prices of building materials like reinforcement, cement, sands, paints, and sanitary wares rose by over 50 percent, while the cost of buying new homes and rent went up by over 100 percent in some locations. Many housing construction sites across the country were also abandoned due to the cost of construction that spiked.
Also, according to the report, real estate services contributed 4.46 percent to the nominal GDP in the first quarter of 2023 relative to 4.92 percent recorded in the first quarter of 2022 and 5.62 percent in the fourth quarter of 2022. The sector contributed 5.58 percent to the GDP, while the construction sector contributed 3.36 percent in the third quarter of 2023.
Ex-NIOB secretary’s take
A former secretary-general of the Nigerian Institute of Building (NIOB), Christopher Belonwu, said the elections and subsequent litigations in 2023 affected the performance of the sector last year, adding that change of government and the subsidy removal also affected the sector negatively.
However, Belonwu expressed optimism that the year 2024 would be kinder to the sector and expressed confidence in the ability of the Minister of Housing and Urban Development, Dangiwa to turn the sector around for good.
He said, “2023 was characterised by a lot of factors and much was not achieved because it was an electioneering year. Also, the litigation after the election affected the sector. The change of government, the subsidy removal and Naira scarcity were also factors that were responsible for the little achievement in the sector. The two factors led to an increment in the cost of building materials.
“However, we are optimistic that the sector will do well in 2024 because of the pedigree of the man in charge of the Ministry of Housing and Urban Development, Arc. Ahmed Musa Dangiwa. But going by the budget for 2024 as affects the housing sector, the planned 20,000 housing units under the Renewed Hope Agenda, how affordable will that be?
“Also, what happens to all the existing housing units? Yes, it is everywhere that BUA Cement has announced that it will reduce the price of a bag of cement to N3, 500 this year, if it is real, the sector is expected to perform better.”
A Real Estate economist, Mr. Benjamin Onigbinde, also told this medium that the sector was greatly impacted negatively by the financing model and the inconsistency in the prices of cement.
He, however, asked the federal government to implement all the housing policies this year and advocated a bottom-up approach to housing development.
“2023 was not a good year in the housing sector in Nigeria, whichever way you look at it, either in financing or technology. There was a big distribution in the supply chain system. The price of inputs like cement was not stable which made it difficult for developers to deliver the houses at a target time.
“So, also the foreign exchange instability which affects the cost of imported inputs for luxury housing. The result is an increase in uncompleted houses all over the country.
“My expectations for the agenda for the government in 2024 is to implement all the necessary policies that are on the ground to promote the development of housing including the Civil Service Housing Developments, the completion of various state housing corporations all over the country which will increase the housing stocks.
“I am also advocating a bottom-up approach to housing development, like each local government area can develop 100 housing units in a year.”
Source: Blueprint
