Dangiwa Shares Insights on Ministry’s Strategies To Tackle Nigeria’s Housing Deficit
As Nigerians are looking forward to getting accessible and affordable housing, the Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa has shared insights on the pragmatic strategies that has been undertaken and still on-going to bridge the gap in the housing deficit in the country..
Dangiwa shared the insights in his keynote address at the 2024 Conference of Property and Environment Writers Association of Nigeria (Pewan) with the theme:” Resolving the financial and regulatory dilemma to achieve Renewed Hope Agenda on Housing” on Thursday 28th November, 2024 in Lagos.
The minister, represented by Salisu Babamasi Haiba, Director of Press in the ministry commended the organizers of the Conference, Property and Environment Writers Association (PEWAN) for putting together this conference, noting that putting the nation’s housing and urban development sector on the right path requires the involvement of all stakeholders, including the media who have such immense powers to shape public opinion and influence policies.
The minister said that “Housing delivery, especially affordable housing which we are in dire need of in Nigeria, requires huge financing. At the Ministry of Housing and Urban Development, our estimates show that we will need to build 550,000 housing units annually to cope with increasing population and address the housing deficit in the country, which some sources have said is over 18 million units. That will require an annual budget of N5.5 trillion at an average of N10 million per unit.”
He highlighted that government needs to make huge investments, especially because more than 80% of Nigerians who need housing fall within the low-to-medium income brackets and cannot afford homes at commercial rates, adding that the cost of land and building materials also make it almost impossible for such Nigerians to build their own homes, except through interventions that government provides.
Daigwa stated that when they came on board roughly 14 months ago, they knew that they needed to do things differently if they must make any meaningful impact and announced that they have made considerable progress since February this year when Mr. President performed the groundbreaking for their first housing project.
According to him, the project signaled the flag off of the nationwide Renewed Hope Cities and Estates Programme, which aims to deliver 50,000 housing units in the first phase, adding “We will be building seven (7) cities nationwide, one in each of the six (6) geopolitical zones and the FCT, and 30 estates, one in each of the remaining 30 states.”
He stated further “Through the Renewed Hope Cities and Estates Programme, we currently have 14 active construction sites nationwide, for a total of 10,112 housing units. On the other hand, we are currently constructing 12 Renewed Hope Estates, comprising 250 housing units each, across 12 states, with two states from each geo-political zone. The states include: Yobe, Gombe (North-East); Nasarawa, Benue (North-Central); Sokoto, Katsina (North-West); Abia, Ebonyi (South-East); and Delta, Akwa Ibom (South-South); totaling 3,000 units.
“The cities are larger urban projects being developed in the FCT (3,112 units), Kano (2,000 units), and Lagos (2,000 units), with additional cities planned in Enugu, Borno, Rivers, and Nasarawa.
“A significant number of these units are at the roofing stage, and we are working closely with the developers towards their completion and commissioning. For instance, at the Renewed Hope City in Abuja, 1,000 units are near ready with only plastering, internal features remaining. We plan to have this ready for Mr. President to commission in December. These houses can also be accessed through the innovative web portal (https://renewedhopehomes.fmhud.gov.ng) where any Nigerian, from anywhere, can take a tour of all houses, choose the one they want, apply through any of the payment options (outright, installment payment, mortgage or Rent-to-Own), and get their award letter there and then.”
He acknowledged that funds put into housing construction are revolving because the houses will be sold and the money put back in government coffers for subsequent housing construction, noting that beyond this, housing construction plays a huge role in job creation and poverty alleviation, hence this huge economic impact must be put into proper context.
The housing sector’s potential as a driver of economic growth, he said is evident in the job opportunities that the Renewed Hope Cities and Estates Programme has created, stressing that at an average of 25 jobs per house, the ongoing projects have directly and indirectly generated over 252,800 jobs for Nigerians, including skilled and unskilled workers.
He added that at an average daily wage of ₦5,000, many workers are earning over ₦150,000 monthly, which is far above the national minimum wage.
The minister affirmed that from professionals such as Architects, Civil Engineers, Surveyors, skilled workers like masons, carpenters, electricians, plumbers, steel fixers, welders to laborers, security personnel, concrete pourers, excavation workers, the Renewed Hope Cities and Estates is unlocking the potential of housing construction as a veritable source of good paying jobs that are taking our youths off the streets and reducing the temptation to indulge in criminal activities.
He explained that what the ministry had done in just over a year in terms of number of units is more than what was achieved in the previous eight years put together, adding that they had to adopt a range of creative and diversified funding strategies to create impact under the Renewed Hope Agenda of Mr. President.
“First is Budgetary Provision. We are funding 12 Renewed Hope Estates from the ₦50 billion 2023 Supplementary Budget. We also have an additional ₦27.2 billion allocated in the 2024 budget to complete their infrastructure fully while awaiting 2025 budget to expand the programme to cover more of the remaining states.
“Second is Public-Private Partnerships (PPPs). The 3 Renewed Hope Cities in FCT, Lagos and Kano are all being funded through a PPP that the Ministry signed with a consortium of developers for the delivery of 100,000 housing units nationwide. Under this strategy, the developers source land and construction finance while the government creates an enabling environment for them to deliver housing. So far, the Ministry has facilitated a N100billion Bankable Offtaker Guarantee by the Federal Mortgage Bank of Nigeria (FMBN) for the Karsana Renewed Hope City. This has enabled developers to mobilize over ₦40 billion in financing—a first in the history of Nigeria’s housing sector,” he emphasized.
He mentioned that the ministry made cross subsidy a key part of their efforts to enhance affordability for low-medium income earners to foster integrated living.
Under this concept, he noted that the housing units built in the Renewed Hope Cities will be sold at commercial rate while a substantial percentage will be sold at concessionary rates to low- and medium-income Nigerians who are members of the Nigeria Labour Congress and the Trade Union Congress.
He pointed out that the ministry also embraced PPPs because our housing deficit is vast and cannot be funded from budgetary allocation alone as they needed to build approximately 550,000 units annually over the next decade to close this gap, which would require about N5.5 trillion per annum.
He maintained that PPPs alone cannot deliver Renewed Hope Affordable Housing for the majority of Nigerians due to the high costs of private-sector construction financing, which significantly increase housing prices, adding “For example, a one-bedroom apartment at the Renewed Hope City in Karsana, built under a PPP model, costs about N22 million, whereas a two-bedroom unit under the Renewed Hope Estates, funded through budgetary allocations, costs about N12.2 million.
“The difference lies in the cost of finance. Under the Renewed Hope City model, developers purchase the land, secure financing at double-digit interest rates, while as government, we facilitate a Bankable Offtaker Guarantee from the FMBN. In contrast, Renewed Hope Estates are funded with interest-free allocations from the budget. State governments provide free land, and infrastructure costs are subsidized and excluded from the housing unit prices. These factors account for the significant price disparity between Renewed Hope Cities and Renewed Hope Estates.”
The minister proffered answer to a question as to why they continue to embrace PPPs, noting that as a government, they have a responsibility to serve all Nigerians by stimulating private sector participation in housing delivery, since their objective is to provide quality housing across all income levels so, PPP-driven Renewed Hope Cities target high- and middle-income earners who can afford such prices, while Renewed Hope Estates cater to lower-income groups, while this approach ensures that every category of Nigerians has access to suitable housing options.
He argued that while pursuing PPPs, the government must also increase funding for the Renewed Hope Housing Programme, adding “As a Ministry, we have championed this advocacy, and there is now widespread recognition that the current N50 billion annual budgets for housing is grossly inadequate compared to the N5.5 trillion required annually to address the housing deficit.”
He revealed that they have engaged the National Assembly leadership and received their support for increasing the annual housing budget to a minimum of N500 billion, starting with the 2025 budget cycle, stressing that this would allow them to expand housing projects to cover the remaining 18 states and increase the unit count per state from 250 to at least 500, as initially planned.
The third funding strategy, the minister said is international collaborations and revealed that they are finalizing a partnership with Shelter Afrique Development Bank for the financing of 5,000 housing units under phase one, representing an estimated investment of ₦50 billion.
“This will be first time that the Nigerian Ministry of Housing and Urban Development will be directly leveraging housing finance from ShafDB, a Pan African institution where it is currently the largest shareholder. The ShafDB housing finance collaboration is also another Renewed Hope First that we are recording at the Ministry,” he stated.
Dagiwa said “Fourthly, we are leveraging Ministry Agency Contributions. Here, the Federal Mortgage Bank of Nigeria (FMBN) is also providing low-cost funding for the Renewed Hope Cities to ensure lower price tags for housing units that target the lower- and middle-income segments. The Federal Housing Authority (FHA) is also working to increase the housing stock. They have successfully secured land at no cost from 20 State Governments nationwide towards the delivery of affordable housing. The Authority is set to commence construction of 200 Renewed Hope Houses across 17 states in phase one.
“Lastly, we are on the verge of launching National Social Housing Fund (NSHF) in line with Mr. President’s Renewed Hope Agenda to ensure that all Nigerians including the LOW AND NO INCOME, vulnerable and underprivileged groups have access to decent and dignified accommodation. We are currently completing both a memo to the Federal Executive Council (FEC) and an Executive Bill to the National Assembly for the creation of a National Social Housing Fund. Potential sources of funding include budgetary provision, donations from philanthropic organizations, Corporate Social Responsibility and voluntary donations from Nigerians.”
Speaking on regulations, the minister said that they have done quite a lot to address the legacy issues that have over the years clogged the wheel of progress towards effective housing delivery and urban development in Nigeria, adding that beyond strengthening the institutional and regulatory frameworks of the ministry and its agencies, they are doing a lot in the area of land administration as well.
According to the minister, the Land Use Act 1978 is the overriding legal instrument for land administration in Nigeria, but much of its provision is either outdated or impossible to implement within the current framework, adding “We are working to review the Act in collaboration with the National Assembly; to make it relevant and comprehensive to deal with existing and emerging issues around access to land and its administration.”
He also revealed that earlier this year, the Ministry instituted Four Reforms Task Teams to help provide the framework for driving the implementation of the Ministry’s plans.
One of them, he said was the Land Reforms Task Team, headed by Rev. Ugochukwu Chime, a renowned housing expert with decades of experience in the sector, so, leveraging the work done by the Presidential Technical Committee on Land Reforms (PTCLR), the task team was charged with building a framework for effective land administration in Nigeria, as well as the proposed establishment of the National Land Commission to operationalize the Act.
He emphasized that effective land governance is important to national and economic development in Nigeria, noting that by ensuring clarity, security, and accessibility in land ownership and transactions, we lay the foundation for increased investment, both domestic and international.
He disclosed further that last month, at the 2024 National Technical Development Forum on Land Administration, they launched a new framework for fair and equitable compensation rates for crops and economic trees, ensuring adequate recompense for persons affected by government projects.
In his words: “For example under the revised rates for matured trees in the North Central Zone: Cashew: increased from N2,000 per matured stand to N45,000 and N5.5M for a hectare.
“Mango: increased from N4,000 per matured stand to N105,000 and N13M per hectare.
“Cocoa: increased from N3,000 per matured stand to N160,000 and N160M per hectare.
“Now, Project Affected Persons will receive compensation that reflects current economic realities.”
He announced that they are also about to start a National Land Registration, Documentation and Titling Programme, noting that their aim is to work with State Governments to register, document, and title all land parcels in the country, while their goal is to increase formalization of land transactions from less than 10% to over 50% within a decade.
He lamented that we have over 300billion dollars in dead capital because land is not titled and our people cannot leverage land as an economic asset to get loans for their businesses or other investment purposes.
He stated further that they now have enhanced the Electronic Certificate of Occupancy (e-C of O) and Land Titling System for all federal government-owned lands across Nigeria’s 36 states, highlighting that this system streamlines the review, approval, and issuance of Certificates of Occupancy, significantly reducing administrative delays for federal land applications.
“I have, over the past few months, digitally signed over 1,000 e-C of Os on federal government landed properties nationwide,” the minister said.
Another issue bothering on regulation, he said that the ministry is tackling is that of Building Collapse which continues to be an embarrassment to us as a nation.
However, he said, this issue stems from many years of neglect and lack of proper coordination and regulation of the built environment.
Dagiwa said “In the last few months when we witnessed building collapse cases in Jos and Kano, I immediately directed the relevant officials of the ministry to carry out investigations on the causes of the collapse. We are in the process of identifying the professionals involved in those projects and they will be prosecuted for wrongdoing.
“Beyond that, we realise that prevention is the way to go because building collapse results in death and losses that are irreplaceable. This is why we are working with the relevant agencies, state governments, and professional bodies to ensure stricter approval processes and more effective monitoring throughout the life of a project.
“Furthermore, we recently inaugurated a Builders Disciplinary Tribunal in collaboration with the Council of Registered Builders of Nigeria (CORBON) to determine cases of infraction by members of the council and the built community, so as to ensure built professionals adhere to global standards.”
He encouraged all stakeholders to remember that they are here for the interest of our poor brothers who are living in informal settlements because they cannot afford the next rent, those who are living in places with no decent sanitation and who cannot afford to make a 10% down payment for a house.
“At the Ministry of Housing and Urban Development, we are ready, willing and open to ideas, partnerships, and collaborations that will help us fix these systemic challenges and expand quality housing to all,” the minister emphasized.
In his brief remarks, the Chairman of the day, BLDR. Kunle Awobodu called for serious government intervention to bridge the housing deficit, noting that landlords are relocating abroad as many people build their houses around 10 years, so inflation is what they have to reckon with within the construction sector.
Awobodu said there is a need to synergize to deal with the problems of housing in the country.
He mentioned that members of the Property and Environment Writers Association of Nigeria (PEWAN),have been in the trenches for over two decades giving good reportages on the housing sector and environment in Nigeria and called on the minister and the Federal Mortgage Bank of Nigeria, (FMBN) that it is time to compensate PEWAN members by giving them mortgage to build and own their own houses as was previously done by Ogun State, where journalists were empowered to owe their own houses at Arepo in Ogun State.
Earlier in her welcome address, the Chairperson of PEWAN, Mrs Okwy Iroegbu-Chikeze said the conference followed the tradition of the association established in 1995, where members are drawn from print, electronic and online media platforms covering property, Real Estate, Works, Construction and Environmental sectors to assemble experts and other stakeholders in the industry to brainstorm on this year’s 2024 theme: “Resolving the financial and regulatory dilemma to achieve renewed hope agenda in housing.”
Iroegbu-Chikeze pointed out that with all that the current administration is doing under the renewed hope agenda, with the current realities this is well above the reach of the majority of Nigerians, especially the low-income earners in both private and public sectors.
“It is our expectations that the conference will provide opportunity for experts and stakeholders in the real estate sector to chart pathways towards increasing housing provision in the country to bridge the huge housing deficit estimated at 28 million, removing the limitation to effective production by increasing access to low-cost financing and also focusing on federal government’s housing agenda,” she emphasized.
High point of the event is the presentation of the PEWAN Award by former president, Nigerian lnstitute of Building (NIOB), Mr Kunle Awobodu to the Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa which was received on his behalf by Salisu Babamasi Haiba, Director of Press in the ministry.
PHOTO NEWS
