Lack of funding impedes housing delivery in Nigeria, says Okonjo-Iweala
The Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said lack of a vibrant housing finance sector is among the bottlenecks militating against home ownership in Nigeria.
The minister, who decried the high cost of housing development in Nigeria, noted that the country lacks an effective housing finance sector to assist potential landlords.
Nigeria’s mortgage penetration rate in comparison with other sub-Sahara African nations is 10 per cent. Its interest rates are close to 20 per cent.
The cost of housing development in Nigeria is also said to be too high, compared to that of other countries.
This limits the number of Nigerians who can decent homes.
Okonjo-Iweala spoke in Abuja at The Mortgage Finance Roundtable of the Lands, Housing and Urban Development.
The minister noted that if majority of Nigerians owned their homes, it would considerably reduce the level of corruption.
She said: “The housing sector also holds huge potentials for job creation and employment, particularly for our youths. The National Bureaus of Statistics (NBS) reports that the real estate market contributed 1.64 per cent to the Gross Domestic Product (GDP) in the first quarter of 2011, while the Building and Construction sub-sector contributed 1.99 per cent to the GDP in the fourth of 2011. Many of the unskilled youths can find useful employment in this sector.
“The ability of people to obtain mortgages will also reduce the incidence of corruption because most people will have honest ways to actualize their dreams of owning their own homes.
“A strong Mortgage Finance System is very crucial to achieve sustainable growth in Nigeria’s housing sector towards ensuring secure and decent housing. However this must come with institutional checks to prevent abuse both by borrowers and exploitations by lenders.
“For the Banks, an adequate mortgage finance systems will require long term lending structures over a period of years to ensure that this system works and that people can access mortgage over a number of years,” she stressed.
Source- The Nation