As part of preparations to save the economy from collapse in the aftermath of the coronavirus and its devastating impact, the Central Bank of Nigeria (CBN) says it will be making funding interventions in four key sectors with capacity to support mass employment and wealth creation.
Affordable housing is one of the four key sectors. Others are renewable energy; cutting edge research, and light manufacturing.
On account of the coronavirus pandemic which the World HealthOrganisation has described as a global emergency, all economic activities have been paralysed, putting the global economy at risk of recession. National governments at various levels are putting measures in place to save their economies.
In Nigeria, the apex bank says its funding for affordable housing, the size of which is yet unknown, will target housing construction by developers who provide proof of profiled off-takers with capacity to repay the loan.
Bank verification numbers (BVN) will be used to verify the information given by the off-takers before the developers can access the facility, according to the bank which said it would also assist the mortgage finance sub-sector, and land administration agencies at the states to build capacity for prompt processing and issuance of land titles.
Analysts have described this as a good development, not only for the housing sector, but also for the economy at large, insisting that housing construction is the quickest and surest way to create economic activities that could jump-start an economy.
“At an estimated 20 million units, the housing demand-supply gap in the country is quite huge,” said Johnson Chukwuma, a construction engineer, who spoke with Housing news on Monday in Lagos.
Chukwuma noted that the structure of the housing market in Nigeria is that of a pyramid where, he explained, the top which is thin is heavy with oversupply while the base is wide and undersupplied.
“This is where you have the low income earners who need low income or what has come to be known as affordable housing. This area is largely underserved,” he said, stressing that CBN’s decision to intervene in that area is good news for the economy because jobs and wealth will be created.
It is believed that after Agriculture, housing construction sector has the greatest potential to create employment. Femi Adewole, CEO, Family Homes Funds Limited (FHF), emphasises that housing construction creates jobs fast, estimating that for every unit of housing that is produced, a minimum of four to six jobs are created.
Adewole argues that “if we have a project that will deliver 300,000 homes in Nigeria and it is spread across all the 36 states, that will, over a five-year period, bring 10 million people into employment. This is possible and it is time to think in that direction.”
Though Chukwuma has his concerns about CBN’s conditions for the loan which requires the developers to provide proof of profiled off-takers with capacity to repay the loan, the Real Estate Developers Association of Nigeria (REDAN) assures of their readiness to build affordable homes for Nigerians.
“We will continue to ensure that the housing sector remains safe from the effect of the coronavirus pandemic. We will continue to recommend pragmatic solutions to the government and major players in the real estate sector to reduce the housing deficit in the country,” REDAN National President, Aliyu Oroji Wamako, said.
It is expected that with this resolve and assurance from the players in the housing sector, CBN’s offer, when it matures, will be well received by the developers, more so as Wamako has enjoined REDAN members to remain committed to its mission of affordable housing for all.
“The CBN has also promised to assist the mortgage sector and also the various state governments to built capacity for issuing land titles. We hope all these will help both the supply and demand sides of the housing market, leading to more construction activities, more jobs and more wealth creation,” Chukwuma posited.