Rising Construction Costs and the Need for Housing Reforms in Nigeria
The rising cost of construction in Nigeria has become a major concern, particularly for those seeking affordable housing. Adeniyi Akinlusi, the Director of Greenstem Group and former President of the Mortgage Banking Association of Nigeria (MBAN), has highlighted the issue, attributing it to the economic crisis that continues to impact the country.
Akinlusi emphasized that the current economic situation has made housing increasingly unaffordable. He pointed out that many building materials are imported, which significantly drives up costs. To address this, he called for a shift toward using locally available materials as a more sustainable and cost-effective solution.
The Role of Local Building Materials
According to Akinlusi, the reliance on imported materials is a key factor in making housing unaffordable. He suggested that exploring local alternatives could help reduce these costs. This approach not only supports the local economy but also reduces dependency on foreign markets, which are often volatile due to global economic fluctuations.
In addition to material sourcing, Akinlusi outlined several areas where housing reforms are needed in Nigeria. These include land management, infrastructure development, and the provision of social housing for individuals who cannot afford market-rate homes. He stressed the importance of rental housing as an alternative, noting that many people prefer stable, decent living conditions over the pressure of homeownership.
Government Support and Mortgage Reforms
Akinlusi also spoke about the role of the government in facilitating easier access to homeownership. He noted that while the Federal Mortgage Bank exists, its effectiveness is limited if properties cannot be mortgaged. This is particularly concerning in Abuja, the capital city, where even government employees face challenges in purchasing homes.
He mentioned the importance of the model mortgage foreclosure law, which has been implemented in some states. However, he expressed disappointment that similar measures have not been adopted in Abuja. Akinlusi urged the National Assembly to support the current administration and the Ministry of Housing to ensure that such laws are extended across the country.
Addressing Land Titling and Accountability
Another critical issue Akinlusi highlighted is land titling. With the recent appointment of a new minister for the Federal Capital Territory (FCT), he expects progress in resolving long-standing issues related to property ownership. He proposed that the ministry should publish all land titles signed by the minister each month, regardless of the amount involved. This would promote transparency and accountability in the process.
Recapitalizing the Federal Mortgage Bank
Akinlusi also called for the recapitalization of the Federal Mortgage Bank. He explained that the bank’s current financial state is unsustainable, with shareholders’ funds eroded over time. A well-capitalized mortgage bank is essential for supporting the housing sector and ensuring that mortgages can be issued effectively.
In addition to this, he advocated for the passage of several mortgage-related bills in the National Assembly. These include the establishment of a mortgage guarantee company, which would provide liquidity in case of loan defaults. Such a mechanism is crucial for maintaining the stability of the mortgage banking industry and encouraging commercial banks to participate in housing finance.
Reviewing Existing Laws and Attracting Investment
Akinlusi emphasized the need to review existing laws governing the National Housing Fund (NHF) and mortgage banks. He argued that outdated regulations hinder progress and create obstacles for both developers and homebuyers. By implementing the right reforms, Nigeria can create a more enabling environment for housing development.
He also stressed the importance of attracting private investment, both domestic and international, to address the housing gap. The federal government alone cannot bear the financial burden of providing adequate housing for all citizens.
Conclusion
Akinlusi’s insights highlight the urgent need for comprehensive housing reforms in Nigeria. From addressing the cost of construction to improving access to mortgages and ensuring land titling processes are transparent, there are multiple areas that require attention. By taking these steps, Nigeria can work toward reducing homelessness and ensuring that all citizens have access to decent, affordable housing.