HOUSING FINANCE IN NIGERIA: ISSUES AND SOLUTIONS
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HOUSING FINANCE IN NIGERIA: ISSUES AND SOLUTIONS
CHAPITRE ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Housing has been universally recognised as one of the most basic necessities of human life and is a significant economic asset in every country. Adequate housing is essential for stable communities and social inclusion (Oladapo, 2006). Gilbertson et al. (2008) discovered a link between an individual’s home conditions and his or her physical and mental wellbeing.
People’s right to shelter is so fundamental, and providing appropriate housing to everyone who need it should be a hallmark of every civilised society and one of the criterion for measuring development.
However, providing appropriate housing in Nigeria and other developing countries remains one of the most difficult hurdles to human and national development. Attempts by all stakeholders,
including government agencies, planners, and developers, to supply the necessary ingredients for resolving the housing crisis have met with little or no success.
Ogundele (1989) and Teufic and Ural (1978). Agbola (1987), Okpala and Onibokun (1986) acknowledged finance as a component of housing challenges, but considered land and building materials as more important.
Their findings affected government housing policies, as well as the later formation of relevant projects and institutions such as the Site and Service Programme and the National Institute of Road and Building Research.
The scarcity of information and practical understanding about home finance operations is a big issue nowadays. Housing is the first to suffer in a tight money market since neither the builder nor the consumer can easily secure housing financing. Even in normal circumstances, many builders have trouble securing funding for their projects.
Two of these issues include high interest rates, which contribute to housing costs, and the difficulty in acquiring finance for home development. According to Onabule (1996), between 1991 and 1996, 245 Primary Mortgage Institutions were founded under the NHP.
Unfortunately, only 54 are currently operational, primarily in the country’s south-west and Abuja. According to Abiodun (1999), the Mandatory Saving Scheme generated around 4 billion naira for the National Housing Fund. Only N100 million of the N300 million credit sanctioned by FMBN was advanced.
According to Arilesere (1997), Abiodun (2000), and Okupe et al (2000), Nigeria’s housing financing history has been horrible. The abrupt transition from an agrarian to a petroleum-based economy did not help problems.
The comment attributed to one of our heads of state that “money was not our problem, but how to spend it” is a summation of a Nation that lacked focus in its formative years. Since since, this condition, combined with tremendous population expansion, has gone uncontrolled.
The housing sector is more important to a country’s welfare than is commonly recognised, as it has a direct impact on not just the well-being of its citizens, but also the performance of other sectors of the economy. Since the early 1970s, adequate housing provision has drawn the attention of most governments, particularly developing ones, for a variety of reasons.
For starters, it is one of humanity’s three most fundamental necessities, along with food and clothing. Second, housing is a critical durable consumer item that has a beneficial impact on productivity since it improves workers’ health and well-being, and hence growth.
Third, it is one of the indexes used to assess people’s standard of life across societies. As a result, governments have created assistance schemes in the areas of finance, infrastructure provision, and research to improve the delivery of suitable housing.
The emphasis on money, on the other hand, has been quite prominent for obvious reasons. This is because housing provision necessitates a large capital outlay, which is frequently beyond the means of the middle and lower income groups.
Housing financing, which has frequently been identified as one of the most difficult limitations in the housing sector, has been a major source of concern. The researcher is investigating housing financing in Nigeria; challenges and solutions in acknowledgment of the crucial relevance of finance in housing delivery.
1.2STATEMENT OF THE PROBLEM
The issue of housing has become a daily topic of conversation in all areas of public and private services in Africa’s developing countries, particularly in Nigeria, which is the focus of this study. It has become increasingly clear that the majority of Nigeria’s urban population lives in dehumanising housing environments,
while those who have access to average housing do so at exorbitant costs. According to Onibokun (1986) and Nubi (1991), rent in Nigeria’s main cities is approximately 60% of an average worker’s disposable income.
According to Ekweme (1979), Iyagba et al (1998), the rate of demand for new houses was determined in part by the pace of production of new houses and in part by the rate of replacement of old housing stock.
With the challenges of high house financing costs in the construction industry, the researcher will provide an overview of housing finance in connection to the concerns and challenges in this study.
1.3 OBJECTIVES OF THE STUDY
The following are the study’s objectives:
1. To investigate issues concerning housing finance in Nigeria.
2. To find a solution to Nigeria’s housing finance problems.
3. Determine the level of housing funding provided by the Nigerian government.
1.4 RESEARCH QUESTIONS
1. What are the problems with house finance in Nigeria?
2. What is the solution to Nigeria’s housing finance problems?
3. How involved is the Nigerian government in housing finance?
1.6 SIGNIFICANCE OF THE STUDY
The following are the study’s implications:
1. As it is widely known that the capital involved in housing development is very large, the results of this study will enlighten the general public on the issues of housing finance. This study will educate on strategies that can be used in executing housing projects with minimal financial problems.
2. The findings of this study will also alert policymakers to the importance of developing good housing policies, as well as the current government to the importance of putting those policies into action by investing heavily in housing development, particularly in urban areas, to meet citizens’ housing needs.
3. This research will also serve as a resource base for other academics and researchers interested in conducting additional research in this sector in the future, and if implemented, will go so far as to provide new explanations for the topic.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
This study on housing financing challenges and solutions in Nigeria will address the degree of housing development in Nigeria, with a clear identification of housing concerns. It will also address the extent of government investment in housing through mortgage lenders.
STUDY LIMITATIONS
Financial constraint- A lack of funds tends to restrict the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data collection procedure (internet, questionnaire, and interview).
Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.
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