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201512_Closing Nigeria's housing deficit
Closing Nigeria's housing deficit
On Tuesday the 8th of December, the minister saddled with perhaps the biggest responsibility in the new cabinet released his agenda in a media briefing.
Babatunde Raji Fashola, a former governor of Lagos State and now in charge of the omnibus ministry of Works, Power and Housing told Nigerians what to expect from his ministry in the years to come.
The speech touched on each component of the ministry as well as key issues affecting each component. For the purpose of this analysis, we will be focusing on the stated agenda for housing. The goal is to dissect the thoughts put forward by the minister, provide answers to some of the questions he posed and suggest what we think will be a workable approach to closing the housing deficit in the
In Fashola’s opening remarks on housing, he stated that the government would first need to verify the numbers available on Nigeria’s housing deficit. Whilst we understand the minister’s desire to be sure about the numbers he is planning with, we do not think that this is necessary for two reasons: the first is that there are publicly available, detailed studies on the housing deficit in Nigeria, trending it from 1991 when it was 7 million units to date when it
is put at 17 million units. Second is that the party’s manifesto clearly accepts these figures and in fact used it in making the campaign promise of 1Million new units per annum.
This promise is important. Fashola in his address stated that he hopes to spend N360 billion per annum on government directly building houses. Let us determine the average cost of each flat based on the other number in the address. Fashola hopes to deliver 17,760 flats in the first year. This puts the average cost of each apartment at N20.27 million. If we put this beside the campaign promise of 1 million houses per annum, with average cost of each apartment put at the N20.27 million figure we arrived at above, this proposed budget figure falls short of the N20.27 trillion that will be needed, 3.4 times
the proposed record breaking National Budget. This clearly shows that if APC is to meet its campaign promises, government directly building houses will not be the answer.