Incremental steps to cut the housing deficit

Housing supply is grossly inadequate in Nigeria, which is evident from the national deficit of 17 million units. Housing finance remains in its infancy: its mortgage/GDP ratio of 0.5% compares with South Africa’s 30%. Instinctively, and because of the social and developmental role of housing, we look to the government to fill the vacuum. However, as we have noted in our commentary on agriculture and other sectors, the FGN has competing claims for its limited budgetary funds.


  • The 2018 budget allocates N32bn and N683bn to the power, public works and housing ministry for recurrent and capital spending respectively. This includes N27bn for the national housing programme, reduced from N35bn in the to-ing and fro-ing with the National Assembly.
  • The Federal Mortgage Bank of Nigeria (FMBN) is the main public financing institution but has been hamstrung by its modest capital of N5bn, half of which is paid up. The FGN is to increase its capital by N500bn over five years.
  • Over three years, the FMBN has issued 3,900 mortgages, broadened the national housing fund to non-government employees, and launched rent-to-own and other products. Since its establishment, the bank has provided about N80bn in housing finance and boosted the housing stock by 20,000 units.
  • In November the Port Harcourt City Development Authority and a private company signed an agreement for the construction of 3,000 homes in the new city near the airport.
  • We can see from the above that the efforts of the bank (and other institutions) have had a negligible impact on the national housing deficit. Comparisons with a city-state have limited relevance but since the 1950s working Singaporeans and permanent residents have had to pay into a compulsory savings plan for housing, healthcare and retirement.
  • The Nigeria Mortgage Refinancing Company has raised N18.5bn from the issue of two bonds, guaranteed by the FGN, maturing in 2030 and 2033.  The role of the company, established in 2013, is to provide liquidity to the mortgage market and enhance the maturity structure of the industry’s loans.
  • Turning to Kenya, we find that the government has KES480bn (US$4.8bn) outstanding in its series of dedicated infrastructure bonds with maturities out to 15 years. A brief look at its fixed-income market also shows two issues of medium-term notes by Shelter Afrique, the pan-African finance institution largely owned by the continent’s governments, and a KES3bn note issued by the HF Group (Housing Finance Company of Kenya).


Our site uses cookies to enhance your experience. By continuing to browse, you agree to our Privacy Policy