Has Nigeria’s Federal Government Unlocked the Secret to Affordable Housing?
SOURCE: LAGOS, NIGERIA, (ECHOSTONE DEVELOPMENT NIGERIA LTD)
Officials tasked with the development of affordable housing made news this weekend, as Nigeria’s Minister of State, Works and Housing disclosed the Federal Government’s (FG) plan to build 4 million houses by 2033. With a national housing deficit estimated between 17 to 20 million and growing by
900,000 units annually, this left many questioning how the new commitment will be fulfilled. The secret could be public-private partnerships. Along with their increased commitment to developing homes, the FG has made significant advancements in three critical areas essential to securing affordable housing – land acquisition, affordable financing, and optimized technology.
For years, the FG has been working to expand secondary institutions to support Nigeria’s mortgage sector. Now, it seems, entities like the Federal Mortgage Bank of Nigeria (FMBN), Nigerian Mortgage Refinance Company (NMRC), and Family Homes Funds (FHF) are finally beginning to offer mortgage resources attractive to potential home buyers, which includes “Help to Own” programs, lowered interest rates, 20-year mortgages, and much more, to simplify and educate buyers on the homebuying processes.
Additionally, the government has dedicated land for the development of affordable housing. This, along with offtakers, lending partners, and other tax incentives, is attracting developers from around the world. Nevertheless, Nigeria has been selective about collaborating with private sector developers that will ensure sustainable communities and quality construction. For example, U.S. based company, EchoStone, is earmarked to develop more than 200 000 homes at a variety of price points and locations across Nigeria over the next five years. Through their local entity, EchoStone Development Nigeria Ltd. (EDNL), they are selling fully finished homes – connected to infrastructure, electricity, water systems, and including land, security, and more. Their 252 two-bedroom bungalows, currently selling in Topo, Badagry, have met national and international standards for compliance, sustainability, and quality. Units are available for 9 million Naira and may be bought outright or mortgaged through any of the assistance programs listed above.
With these pillars in place, the government’s promise of closing the annual deficit is becoming more attainable. As the affordable housing market continues to mature, buyers begin to understand the benefits of homeownership, and incentives drive stronger competition toward enormous improvements in the standard of living throughout Nigeria.