One year in office, President Bola Ahmed Tinubu’s ambition to overhaul the country’s housing sector and reduce the housing deficit has taken off to a slow start, in the opinion of six out of seven stakeholders in the housing sector.
Out of Nigeria’s 2024 N28.7 trillion budget, the Federal Ministry of Housing and Urban Development (FMHUD) got N99,982,577,351 billion. N96,996,742,132 billion is for capital projects; N682, 686,111 million for overhead cost while N2, 303,149,108 is for personnel cost.
Housing industry experts say this allocation is a flash in the pan, as it grossly mismatches the ambitious campaign promises for the housing sector by Candidate Tinubu.
Tinubu promised to tackle the country’s housing deficit by merging all federal government agencies responsible for home ownership into a new big entity, saying the various federal agencies meant to promote homeownership are too small and fragmented.
While housing development projects are ongoing across the country, there isn’t an arguable pullaway from the housing development pace of previous administrations.
The cost of building materials skyrocketing puts the Federal Government’s ambition to provide housing for middle and lower-class Nigerians in a tight corner.
Navigating that conundrum requires the participation of the private sector. But it also requires innovation for efficiency, especially in the middle-income segment of the real estate market because margins and purchasing power are different in this segment of the economy, according to the chief executive officer of UPDC, Mr. Odunayo Ojo.
Ojo contrasted the real estate market for upper-class Nigerians to middle-income Nigerians, citing that in the luxury space the higher the price, the higher the quantity demanded.
“Not so with middle-income Nigerians, who react to the changing costs of goods and services. Providing adequate housing for Nigerians means meeting the needs of middle-income Nigerians.
“With the growing costs of building materials and borrowing, there has been the need to re-engineer how things are done, from procurement strategy to even the people. It has been a situation of ‘innovate or die.’ We had to do a lot more to make sure we controlled the value chain to be able to play in that market.
“The middle-class income earners market is getting squeezed; it’s a global problem. So, players in that market must improve efficiency and focus on value rather than costs,” he said.
Ojo stressed the need for collaboration and pulling of resources by interested parties to finance the acquisition of real state property.
He also called for the prudent use of space to be able to acquire property. “Gone are the days when people built elaborate structures that they end up hardly using. Instead of 1,000 square meters, why not put up your structure on a 300 square meter piece of land?
He also called for the use of design, procurement and creative financial engineering to make sure that people can still afford to own homes in these challenging times. He said the challenge of managing construction costs in an economy characterized by fluctuating exchange rates, inflation, and resource limitations remains a pressing concern.
Simeon Kemakolam, an architect, noted that one of the most effective ways to cut costs is by utilizing locally sourced materials.
He said Nigeria boasts a wealth of natural resources such as bamboo, laterite, and palm thatch, which can be harnessed for sustainable building.
He said these materials reduce transportation costs, support local economies, and reduce the carbon footprint associated with construction.
Another architect, Moses Arase, said, “Traditional, building techniques, like the use of mud blocks and rammed earth, offer cost-effective alternatives to conventional methods. These techniques, when modernized and combined with contemporary architectural design, can result in structures that are both economical and environmentally friendly.”
Arase added that smart design is another cornerstone of cost reduction. He said architects can optimize space by designing multi-functional areas and reducing unnecessary square footage. “Efficient space planning not only lowers construction costs but also results in reduced long-term maintenance and utility expenses. Open floor plans, for example, can create a sense of spaciousness without requiring extensive materials,” he said.
“Cost savings are not solely dependent on design and materials; innovative financing and project management strategies are equally crucial. Architects can collaborate with financial institutions to develop creative financing solutions such as phased construction, allowing incremental development as funds become available. This approach is particularly beneficial in a cash-strapped economy,” he stated.
Nairametrics
