Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala
In order to spur the growth of the Nigerian economy, the federal government has been advised to adopt policies that will stimulate growth of the housing sector.
The Financial Derivatives Company Limited (FDC) stated this in its bi-monthly economic report for September made available Wednesday.
It expressed concern that the housing sector in Nigeria contributes an insignificant 0.38 per cent to the country’s gross domestic product (GDP).
It argued that various housing initiatives by successive governments had recorded minimal success, even as it stressed the need “to think outside the box in the country’s approach to housing provision.”
The report pointed out that housing is affordable when it costs a household no more than 30 per cent of its monthly income, saying any household that pays more than 30 per cent of its monthly income for utilities and a mortgage or rent is considered housing burdened.
The provision of adequate housing that is safe, secure, accessible, affordable and sanitary is a fundamental human right, as enshrined in the United Nations Habitat Agenda - the global call on human settlements.
“With a housing deficit of 17 million in Nigeria, affordable housing remains one of the most important variables needed to foster economic growth and development in the country. The housing sector is the bedrock of the economy of developed nations.
“In more advanced economies like the United States of America, Great Britain and Canada, this sector contributes between 30 per cent and 70 per cent of their Gross Domestic Product (GDP). Investment in housing accounts for 15 per cent to 35 per cent of aggregate investment globally and this employs approximately 10 per cent of the labor force,” the report said.
Continuing, it said: “Home ownership is a measure of household wealth and GDP. It is generally accepted that the standard of housing in a nation indexes its effective economic development; standard of living and its height of civilisation. The housing sector has the potential to generate employment, increase productivity, raise standard of living and alleviate poverty.
“It also has the capacity to reduce crime rate, insurrections, militancy, and terrorism, thereby substantially addressing wealth distribution as well as security concerns. Investment in housing affects all facets of life through its multiplier effect on economic development.”
The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, had said with the planned Mortgage Refinancing Company, Nigerians should expect cheaper mortgages that would assist them to own houses as from early next year.
She had noted in an interview with THISDAY that lack of access to mortgage loans due to high charges and inadequate liquidity among the primary mortgage Institutions (PMIs) had compounded the problem of housing in the country.
However, Okonjo-Iweala said the proposed housing problem would begin to reduce as from next year because cheaper mortgages would be available from the Mortgage Refinancing Company that would be launched this month.
The World Bank is assisting the federal government to set up the company, which take off in September, with a financial support of $300 million.
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