According to the World Bank’s Global Competitiveness Report 2015, Nigeria ranked 8th in West Africa for “Quality of overall infrastructure”.  In recent years,  infrastructure has only accounted for about 1.5% of GDP, significantly lower than other developing countries.

Nigeria has a low homeownership rate, lower than that of Indonesia (84 percent), Kenya (73 percent), and South Africa (56 percent). The major issues that continue to affect housing in Nigeria include constraints related to the high cost of securing and registering secure land title, inadequate access to finance, slow administrative procedures, and the high cost of land.

It is clear that the mortgage finance industry in Nigeria is still in its infancy, targeting primarily high income earners and largely excluding middle and low-income earners.  For the majority of Nigerians, mortgage finance is not an option due to the lack of a robust land tenure and financial system, and because loan repayment costs remain prohibitively high.

There are examples of countries like Mexico, Brazil, Egypt, Morocco, Singapore, Malaysia, India and Thailand that have become first class models of emerging economies that have developed sound housing finance systems that overcame all these challenges and mitigated these risks. These countries were worse off than Nigeria at some point as it concerns housing its citizenry. But high level of professionalism and strong political will witnessed in their housing sector has made them succeed.

Today, countries enjoying very high level of housing finance systems are the ones that have created sound enabling environment for the private sector (except Thailand whose Government Housing Bank is a world class model of direct government involvement in lending to the individual through the primary lending model).

A Memorandum of Understanding (MoU) was signed between Nigeria Mortgage Refinance Company (NMRC) and The Centre for Affordable Housing Finance (CAHF), secretariat to the AUHF, to deepen and increase the knowledge and understanding of the housing finance markets in Africa, specifically Nigeria. According to CAHF’s Executive Director Kecia Rust, the collaboration will center on knowledge derived from country-level data on the housing finance sector in Africa and Nigeria.

Increased quality and availability of data will advance public and private initiatives to increase access to housing finance, especially to the lower-and middle-income housing market, as well as improve the functioning of the Nigerian housing market.

Formal housing production is at approximately 100 000 units per year and this is highly inadequate because at least 1 000 000 units are needed yearly to bridge the 17 to 20 million housing deficit by government’s target date of 2033.

Click images below for details on infrastructure in Nigeria.