By Maduka Nweke
Despite government initiatives and private sector efforts to provide affordable housing, many Nigerians are unable to access the benefits of low-cost housing due to challenges like poor awareness, bureaucratic bottlenecks, and limited financing options.
Low-cost housing was introduced as a solution to Nigeria’s growing housing deficit, yet millions of citizens remain excluded from its advantages. Factors such as inadequate policy implementation, lack of transparency in allocation processes, and rising construction costs have left many struggling to secure affordable homes.
Additionally, limited access to mortgage financing and high-interest rates have made it nearly impossible for low- and middle-income earners to afford even subsidized housing options. Coupled with inadequate public awareness of existing programs, many Nigerians remain unaware of opportunities to own affordable homes, further widening the gap in housing accessibility.
Urbanisation and population growth have exacerbated the housing crisis, particularly in major cities like Lagos and Abuja, where demand far exceeds supply. Developers often prioritize high-income projects due to better profit margins, leaving low-cost housing initiatives underfunded and underserved. This imbalance has further marginalized those who need affordable housing the most.
To bridge the gap, experts emphasize the need for stronger public-private partnerships and streamlined housing policies that prioritize inclusivity. Simplifying access to housing finance, increasing public awareness of low-cost housing schemes, and reducing bureaucratic hurdles could make these programs more accessible to Nigerians, ensuring that affordable housing fulfills its intended purpose.
Furthermore, a shift in government focus towards sustainable, cost-effective building materials and technologies could lower construction costs, making low-cost housing more viable. By embracing innovative solutions such as prefab homes or alternative building methods, Nigeria could significantly reduce the financial burden of developing affordable housing, ultimately benefiting a larger portion of the population.
Moreover, empowering local communities to actively participate in the planning and construction processes can foster a sense of ownership and accountability. By involving residents in decision-making, the government can ensure that low-cost housing projects meet the specific needs of the population, while also creating jobs and stimulating local economies in the process.
In the long term, addressing the root causes of Nigeria’s housing crisis requires a comprehensive approach that integrates affordable housing with broader urban planning. This includes improving infrastructure, expanding access to basic services like water and electricity, and ensuring that low-cost housing developments are strategically located to provide residents with access to employment opportunities and essential amenities. Only through such holistic strategies can the full benefits of low-cost housing be realized for Nigerians.
Ultimately, political will and consistent policy enforcement will be key to unlocking the potential of low-cost housing in Nigeria. While initiatives exist, the sustained commitment from all levels of government, combined with effective collaboration with the private sector, can turn the tide. By prioritizing long-term solutions over short-term fixes, Nigeria has the opportunity to significantly reduce its housing deficit and improve the quality of life for millions of citizens.
As the housing crisis continues to deepen, the need for immediate action is more pressing than ever. Nigerians must demand greater accountability from both the government and developers, advocating for transparent processes and sustainable policies that prioritize the nation’s most vulnerable populations. Only through collective effort, innovation, and strategic investments can Nigeria begin to turn the tide on its housing challenges and ensure that the benefits of low-cost housing reach those who need it the most.
Persistent challenges
Low-cost housing in Nigeria faces numerous challenges, including exorbitant construction costs driven by expensive land and building materials, limited access to financing for low-income earners, poor urban planning, weak policy implementation, bureaucratic bottlenecks, and a persistent mismatch between housing supply and demand. These issues often result in substandard housing located in less desirable areas, leaving low-income populations with few truly affordable options.
Contrary to misconceptions, low-cost housing does not equate to subpar quality or cheap materials. Instead, it involves strategic cost management, the use of locally sourced materials, improved construction techniques, and phased implementation of finishing works—all while maintaining structural integrity and durability. During Nigeria’s First Republic, governors such as Lateef Jakande in Lagos, Jim Nwobodo in Anambra, and Abubakar Rimi in Kano championed affordable housing projects, providing subsidized homes to citizens. Estates like Festac Extension and Mile 2 in Lagos are legacies of these efforts. However, successive administrations failed to sustain these initiatives, and nepotism, corruption, and self-interest eroded the effectiveness of low-cost housing schemes.
The lack of infrastructure further compounds the problem. Basic amenities like water, electricity, and sanitation remain inadequate in many urban and suburban areas, driving up construction costs and limiting the reach of affordable housing projects. Without government subsidies or significant investments in infrastructure, housing remains inaccessible to many low-income earners. Population growth also exacerbates the issue. Nigeria faces a housing deficit of 25 million units, with over 60% of Lagosians living in slums. Migration to urban centers continues to rise as rural areas remain underdeveloped, worsening the strain on housing supply.
Although successive governments have proposed solutions—such as the “Housing for All by the Year 2000” initiative, the National Housing Policy of 2006, and the establishment of the Nigerian Mortgage Refinance Company in 2013—these efforts have largely failed to deliver. Affordable housing remains an unfulfilled promise, leaving millions of Nigerians without access to safe and decent shelter. Addressing this crisis requires a combination of political will, strategic planning, and sustained investment in infrastructure and housing development.
Poor workers’ remuneration
Nigerian workers face an uphill battle trying to secure decent housing with their meager salaries. Many have resigned themselves to the harsh reality that their income can barely cover basic accommodation, let alone allow for homeownership. This dire situation has led to widespread resentment toward tax enforcement, as the majority feel their contributions are misused. A small percentage of the population shoulders the economic burden, while others exploit the resources generated. This inequity exacerbates the housing crisis, as even government-backed housing schemes remain out of reach for most workers. Double-digit mortgage rates and exorbitant rents are insurmountable hurdles for over half of Nigeria’s working class. Meanwhile, the cost of constructing housing estates is so high that selling them at subsidized rates would plunge the government into an unsustainable budget deficit. This creates a vicious cycle: while the demand for affordable housing is immense, the government lacks the resources and strategy to meet it effectively.
Poor mortgage facilities
Nigeria’s mortgage system also falls short of expectations, offering little relief to the average citizen. Mortgage institutions are often inaccessible to the majority due to stringent requirements and high interest rates. Recognizing the sector’s challenges, private entities are stepping in to address the gap. Converged Dynamics Capital Services Limited, a financial service firm, recently announced plans to launch a private equity fund targeted at the real estate sector. According to the company’s Managing Director, Mr. Abiodun Akinniranye, the fund aims to accelerate real estate development, reduce the housing deficit, and provide investors with opportunities to profit from the sector. The initiative involves both local and foreign partnerships, offering a glimmer of hope for bridging the housing gap. However, these efforts are still in the preliminary stages and will take time to impact the market significantly.
NMRC’s N6bn injection into mortgage market
The Nigerian Mortgage Refinancing Company (NMRC) has taken proactive steps to tackle the housing crisis, injecting N6 billion into the mortgage market to reduce the housing deficit. NMRC’s Managing Director, Mr. Charles Inyangete, revealed this during the signing of a Memorandum of Understanding (MoU) with the National Bureau of Statistics (NBS). The MoU enables the NBS to conduct surveys that will provide crucial data to guide NMRC’s mortgage refinancing strategies.
According to Inyangete, the agency has refinanced hundreds of housing projects without any of the loans turning bad—a testament to its robust partnerships. He emphasized that NMRC’s primary role is to provide liquidity to mortgage lenders, enabling them to create more accessible financing options for homebuyers. Currently, the NMRC is evaluating 5,000 mortgage refinancing transactions and plans to expand its activities significantly. With an ambitious program approved by the Securities and Exchange Commission for N140 billion, the NMRC aims to be the dominant player in Nigeria’s housing sector.
While initiatives like NMRC’s refinancing efforts and private equity funding show promise, they do not address the root causes of Nigeria’s housing crisis. Poor wages, high construction costs, inadequate infrastructure, and systemic inefficiencies continue to hinder progress. For sustainable solutions, the government must prioritize housing as a fundamental right by increasing subsidies, improving urban planning, and creating policies that incentivize affordable housing developments. Additionally, addressing wage disparities and enforcing accountability in public spending could restore trust and ensure that more Nigerians have access to decent, affordable housing.
25m housing deficit
Nigeria’s housing crisis has reached a critical point, with an estimated deficit of 25 million units. This alarming figure highlights the scale of the challenge and the urgent need for innovative solutions to bridge the gap. According to Mrs. Monica Efe Osaghae, Managing Director of Efe Enterprise Limited, neither the government nor traditional banks alone can provide the funding required to address this deficit. Instead, specialized investment vehicles, such as structured funds, offer a more viable path for financing large-scale housing projects.
Mrs. Osaghae dismissed the common belief that Nigeria is unattractive to international investors due to foreign exchange liquidity challenges and other economic issues. “These challenges will eventually stabilize, and global investors understand that Nigeria remains a compelling story,” she said. She emphasized that many investors in structured funds are looking at long-term horizons of seven years or more, reflecting their confidence in Nigeria’s potential as a viable investment destination.
Role of structured funds
Structured funds are emerging as a key solution to Nigeria’s housing crisis. These long-term financial instruments attract investors by offering stability and growth prospects. However, as Mrs. Osaghae pointed out, one of the major barriers to attracting such investments is the absence of appropriately structured financial instruments. Investors prioritize factors such as the structure of the fund, the expertise of its investment committee, the reputation of service providers, and the experience of fund managers.
To overcome these challenges, institutions like Converged Dynamics Capital Services Limited (CDCSL) are stepping in with the required expertise and capabilities. By offering well-structured funds and long-term financing options, they aim to inject stability into Nigeria’s housing market. This stability is essential to creating affordable homes that are accessible to the average Nigerian, a goal that remains elusive under the current system.
Driving affordable housing development
Mrs. Osaghae stressed the importance of making affordable homes a reality for Nigerians. While the government has implemented various initiatives, such as the National Housing Fund and partnerships with mortgage institutions, progress has been slow. The high cost of construction, limited infrastructure, and a lack of financing options have hindered large-scale housing developments. Specialized investment vehicles can help address these barriers by providing the long-term capital needed to fund projects from conception to completion.
One of the most pressing challenges in Nigeria’s housing sector is the affordability gap. The average Nigerian worker cannot afford the high mortgage rates or rent prices in urban centers. Structured funds can help bridge this gap by enabling developers to reduce costs and offer housing units at more accessible prices. Additionally, investments in infrastructure, such as roads, electricity, and water supply, are critical to ensuring the sustainability of housing projects.
Future
According to experts, the 25 million housing deficit in Nigeria highlights the scale of the problem, but it also presents an opportunity for transformation. By leveraging structured funds and fostering partnerships between the public and private sectors, Nigeria can begin to address its housing crisis. These investments must be coupled with policies that promote affordable housing, streamline land acquisition processes, and reduce construction costs.
Moreover, the government must play a more active role in creating an enabling environment for investors. This includes improving macroeconomic stability, addressing foreign exchange challenges, and ensuring transparency in the housing sector. With the right strategies, Nigeria can unlock its housing potential and provide millions of citizens with access to safe, affordable, and dignified homes.
As Mrs. Osaghae aptly noted, “The biggest challenge today is finding an affordable home.” Tackling this challenge will require bold, innovative solutions and a commitment to long-term planning. The journey ahead is daunting, but with determination and collaboration, Nigeria can rewrite its housing story”, she said.
For industry watchers, the journey toward solving Nigeria’s housing deficit is long, but with coordinated efforts from the public and private sectors, meaningful progress is achievable.