By Maduka Nweke
The Managing Director of UPDC, a real estate firm in Nigeria, Odunayo Ojo, has revealed ongoing efforts to leverage infrastructure development in making housing more appealing to Nigerians.
He highlighted that the $14 billion Renewed Hope Infrastructure Development Fund is strategically allocated to road, rail and other critical upgrades, aimed at enhancing the viability of housing projects across the country.
Speaking recently at a lecture organised by the Property and Environmental Writers Association of Nigeria (PEWAN) in Lagos, Odunayo Ojo said that although there is no such thing as affordable housing, the aim of coining the term “affordable” is to reduce housing costs for low and middle-income earners.
He explained that to achieve this aim, the National Housing Fund loans are pegged at a six percent interest rate, rent-to-own schemes are reduced to seven percent interest, and government affordable units will range between N8 million and N20 million. He further explained several factors responsible for high housing prices in Nigeria.
According to him, these include land allocation costs, the high cost of building materials and the need for alternative materials, inadequate access to finance, high infrastructure costs, taxes, and fees. Other issues, he mentioned, include policy implementation challenges, skilled labor shortages, technology gaps, and a lack of cooperation between different sectors of the economy. In his assessment of solutions, he emphasized the importance of collaboration across various sectors.
“To solve the existing affordable housing problems, there is a need to leverage collaboration through Public-Private Partnerships (PPP), involving players in the housing sector and others in finance, judiciary, and beyond,” he said.
Ojo stated that to promote contractual relationships between the public and private sectors, the government should provide land with good titles, waive taxes, fast-track approvals, form strategic partnerships with the private sector, offer development expertise, and provide development capital. “These could be achieved through joint ventures and partnerships among developers, professionals, consultants, contractors, and brokers. Leveraging respective strengths and sharing industry knowledge, strategies, expertise, and ideas can tackle various areas of affordable housing,” he noted.
He added that collaboration with players in other sectors would assist in acquiring support from financial institutions, mortgage institutions, manufacturers, and even revising judiciary procurement methods and value engineering. “Providing affordable housing is a social need and an important tool for economic development. The benefits of affordable housing are far-reaching and can provide the much-needed job creation and empowerment for Nigerian youth. Affordable housing is achievable through appropriate synergies and collaboration among stakeholders,” he concluded.
At the same venue, Mrs. Funmilade Akingbagbohun, former President of the Nigerian Institute of Mechanical Engineers, stated that stable power generation and supply could significantly reduce the cost of housing development in the country.
According to her, the government should reduce the cost of raw materials by stabilizing electricity supply. She argued that many people and companies are discouraged from stationing their manufacturing equipment in Nigeria because the cost of diesel over two days often eliminates any profit.
She explained that many companies prefer importing and selling finished products in Nigeria rather than manufacturing locally.