Current Housing Challenges in Nigeria

Nigeria faces a critical housing crisis, with a significant shortfall in adequate and affordable housing across the country. This issue is driven by various interrelated challenges that have persisted over the years. Here’s a detailed look at the key housing challenges in Nigeria:

1. Housing Deficit
Nigeria’s housing deficit is one of the largest in Africa, currently estimated at **22 to 28 million housing units**. This massive gap has grown due to rapid population growth and urbanization. Cities like Lagos, Abuja, and Port Harcourt experience a surge in demand for housing due to rural-to-urban migration. Unfortunately, the rate of housing production has been unable to keep pace with the population growth, leading to overcrowded living conditions in urban areas, slums, and informal settlements.

2. High Construction Costs
The high cost of building materials and construction makes housing unaffordable for a large segment of the population. Key factors contributing to high construction costs include

Import dependency: Many construction materials, such as cement, steel, and roofing sheets, are imported, making prices vulnerable to fluctuations in foreign exchange rates and import duties.

Inflation: Persistent inflation in Nigeria further raises the prices of construction inputs, making housing development more expensive.

Land acquisition challenges: Land in urban centers is highly priced, and securing land titles is bureaucratic and expensive, especially under the **Land Use Act**, which complicates land ownership and transfers.

3. Inadequate Mortgage Financing :Mortgage financing in Nigeria is underdeveloped and inaccessible to the majority of citizens. Only a small percentage of the population can access mortgage loans, which typically require significant collateral, long processing times, and very high-interest rates (sometimes over 20%). Key issues with mortgage financing include:
– Limited availability of long-term financing options:Most Nigerians cannot afford long-term mortgage plans, as banks are reluctant to provide loans due to economic instability and lack of credit infrastructure.

– Low purchasing power: Even where financing is available, many Nigerians have low and irregular incomes, making it difficult to service mortgage loans.

– Lack of basic infrastructure: Many urban dwellers lack access to essential services like clean water, sanitation, and electricity. Roads and drainage systems are poorly constructed or non-existent, which leads to flooding during rainy seasons.
– Insecure property rights: Slum dwellers often face eviction threats because they lack formal land ownership or tenancy agreements, leading to further housing instability.

5. Land Tenure and Policy Issues:
The Land Use Act of 1978 vests land ownership in the state government, meaning individuals need to obtain a governor’s consent to secure land titles. This process is expensive, slow, and riddled with corruption. As a result, the legal process to secure land titles and property rights is a significant obstacle to homeownership and real estate development. Many Nigerians build houses on unregistered land, which limits access to financing and formal recognition of property rights