being in the first place are not frontally addressed. The root causes of slum development include the lack of access to planned and titled land by the poor, on terms they can

afford; and access to housing finance. Great opportunities await aggressively proactive governments that have a heart for their people and are willing to encourage mass

housing provision as a key social responsibility to their teeming electorates.

Mortgage Bank of Nigeria alone. All sectors of the economy ought to have a special interest in a vibrant housing sector. As countless studies have shown, revamping activities

within the housing sector will trigger a nation-wide economic chain reaction that can only be imagined, due to the extensive backward and forward linkages that housing has to

other sectors of the economy.

The conclusions of the Mabogunje-led technical committee on housing that was set up by the Obasanjo administration, state quite categorically the need for a private

sector-led rebirth of the housing sector, where Government’s role would be limited to the creation and nurturing of an enabling environment. This apparently has not gone

down well with the government machinery, which continues to clinch to its desire for a direct role in the creation of housing stock through various government departments and

agencies. In a future article, we shall compare the roles of government agencies in various countries around the world in effectively promoting affordable housing provision.

While many are of the opinion that Government should be directly involved to help bring prices down, there are others who argue that in much the same way that Government

over the years has been unable to effectively provide adequate telephone services, or electric power supply, so it simply does not have the wherewithal to cater directly to

the housing needs of ordinary Nigerians. Rather than clog the wheel of progress in this sector therefore, it ought to step back and take a purely supervisory and regulatory

role.

There are many issues that need to be addressed in order for the housing sector to thrive. These include, among others, issues of land administration, legal & regulatory

framework, the building of local capacity, use & development of appropriate technologies and materials, and lastly of course, that of finance.

With regards to housing finance: there are many who argue that simply providing cheap, long-term funds for housing development will adequately solve Nigeria’s pressing

housing problems. In reality however, we all know that those funds are presently no where around to be found! Otherwise, we would have found them all these years. At 6%

per annum, the cheapest funds currently available on the Nigerian market are generated through the National Housing Fund (NHF) via statutory deductions from workers’

salaries. This fund is managed by the Federal Mortgage Bank of Nigeria (FMBN) which has recently spread its tentacles more widely, in search of additional funding from

international sources. In addition, there has been talk for a number of years, of developing a secondary market through the introduction of mortgage-based securities on the

capital market. Even at that however, the present contribution of that institution, though commendable, remains but a trickle in the vast ocean of housing need that is the

Nigerian population.

A simple calculation illustrates this ugly reality: assuming a target was set to meet Nigeria’s present housing deficit of 15 million homes within the next 20 years at a rate of

750,000 houses per annum - this is further assuming that Nigeria’s population remains static over the next 20 years – as a nation we would need to raise at least N750 billion

for housing alone if each house were to cost an average of one million naira only! This annual requirement represents almost 20% of the entire 2010 federal budget of N4.076

trillion.

According to its web site, FMBN’s total loan disbursement as at April 2005 was N10 billion since its inception in 1977, for a total of 13, 672 homes. This total over the last

30-odd years represents just over 1% of the N750 billion naira required annually to begin to effectively solve the problem. How clear it becomes then that the journey to

adequately providing for the housing deficit has hardly begun.

Furthermore, applicants and beneficiaries of the NHF all seem to agree that the turnaround time for processing housing loans is far too long. While one is usually assured that

a loan can be accessed within a few short months, the reality is that most loan applications usually take up to 24 months to process! The documentation requirements are also

extremely tedious, trying the patience and intellectual capacity of even the most educated, not to talk of the less educated “average Nigerian”.  While the typical US-based

applicant for a mortgage will fill an application form, often from the comfort of his home, via the internet and expect his loan within weeks, his Nigerian counterpart applying for

an NHF loan would go through countless requests for documentation, and more documentation, and more documentation as the process wears on over several months and

even years!

Despite some brave reform that has taken place over the last 8 years, the civil servant’s penchant for “elongated” due process has not wholly been overcome within the

bureaucratic workings of the FMBN system. It would augur well to institute a system that reduces the levels of approvals and above all, decentralize the process. It is

scandalous that one single board of directors seating periodically in Abuja, approve ALL loan applications from across the entire nation. Needless to say, many, many applicants

fall by the wayside in the process, while many others are simply too intimated by the statutory and administrative requirements to even begin the journey.

What initial conclusion then can we draw from the foregoing? First of all, it is not reasonable to expect any meaningful salvation from government housing agencies as

presently constituted if the bare-faced facts stated above are any thing to go by; whether as a direct source of primary or secondary funding it is unreasonable to expect

government on its own to singlehandedly raise even a major share of the nation’s mortgage financing requirements. All around the world, nations that are effectively housing

their citizens, are doing so through a private sector-led housing economy, with government playing a supervisory and guarantor role.

Secondly, in an environment where high interest rates refuse to fall, a home-grown, organically developed, grassroots model for housing provision should be vigorously

developed, so that the enormous totality of activities in the informal sector can be drawn into the mainstream of officially recognized housing activities. Only then can we be

said to be providing mass housing or prefarably, housing for the masses.

•Sam Odia ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) is a National Director of The Fuller Center for Housing – a worldwide non-profit housing organization working to ensure that every one

has at least a simple, decent and affordable home, and operates in Nigeria under the name of The Millard Fuller Foundation.