AFRICA

Nigeria’s Housing Sector, Building Industry Struggling Under Inflation and Subsidy Removal, Says AHCN

The Association of Housing Corporations of Nigeria (AHCN) on Monday lamented the effect of Nigeria’s rising inflation on the built environment, stressing that the removal of subsidy on petrol was rendering several Nigerians homeless.

In a press briefing in Abuja, the President and Chairman of Council, AHCN, Eno Obongha, an Estate Surveyor, noted that Nigeria’s current economic indices do not favour the growth of the housing sector.

Speaking on the state of the housing sector in Nigeria, Obongha stated that the business environment during the year has been characterised by so many economic variables such as hike in petrol pump price, electricity price hike and unstable economic policies resulting in high interest rate.

According to him, these have almost crippled all businesses, including the Monetary Policy Rate (MPR) which has experienced five consecutive hikes and the interest rate is currently at 27.25 per cent from 18.75 per cent in January.

“The galloping inflation does not help matters as prices of building materials continue to rise uncontrollably during the year. Many construction sites have closed down thereby increasing the unemployment rate which stood at 5.3 per cent in first quarter of this year,” he stated.

With the theme of this year’s World Habitat Day being: “Engaging Youth to Create a Better Urban Future”, he stated that this provides the government with the opportunity to come up with creative solutions that will help drive economic recovery using housing to create and generate employment opportunities for Nigeria’s teeming unemployed youth.

On the way out of the current quagmire, the president stated that Nigeria needs pragmatic approaches and appropriate strategies to tackle housing deficit and affordable mass housing production with a view to utilising housing as a tool for economic recovery to reduce unemployment in the society.

“The impact of removal of petroleum subsidy is grossly affecting the low and middle income earners which are rendering many homeless as a result of surge in construction costs and materials as well as hike in housing rentals.

“These segments of the society are confronted with inadequate resources and affordability question to provide roofs over their heads. To mitigate and provide succour to these segments of the society, government involvement and commitment to social and affordable housing is inevitable.

“Governments need to come up with deliberate and targeted policy to encourage provision of social housing through attractive tax rebates and incentives. One of such incentives is a specially crafted housing finance backed and supported by appropriate laws that will regulate the process both on the supply and demand sides at a single digit interest rate,” Obongha argued.

With the rising instability in foreign exchange market, the use of local building materials, he maintained, should be deliberately encouraged and promoted to arouse acceptability by the general public who have developed apathy for its usage.

According to him, the trend in most state and federal ministries before now was most state ministries of housing are now duly involved in direct housing construction under the guise of public private partnership while state housing corporations are rendered redundant.

The federal and state ministries, he said, are principally created for policy formulation while state housing agencies are statutorily saddled with the implementation of government policy of housing provision.

He argued that ministries both at the federal and state levels have no business in direct construction.

“Usurpation of the statutory responsibilities of housing agencies in housing construction and development (which has become a norm) for federal and state governments by ministries is purely an unnecessary duplication of duty which will in the long run cause distraction, needless rivalry, unfair competition and sheer wastages and repetition of efforts and resources.

“Ministries of Housing both at the federal and state level should concentrate on providing the enabling environment and supervision for the housing agency to fulfil its statutory mandates. If the supervising ministry must intervene, it should not be at the expense of relegating the state housing agency to the background,” the association stated.

On rental housing, AHCN described it as one of the critical areas of housing that have been neglected over the years which it believes will greatly address certain segments of the housing challenges, especially among the low and medium income groups that cannot afford outright purchase if developed on a large scale.

It argued that there is hardly any recognised institution that provides well-structured and formal rental housing on a large scale targeted at the medium to low income segment in existence throughout the country.

Obongha stressed that the association in collaboration with state housing corporations have attempted severally to kick-start the scheme but have not been able to secure adequate government support, especially at the state level.

“Until deliberate attempt is made to address housing challenges of low and medium income group through mass housing that will engage youth, housing deficit gap will continue to be on the increase and our youth will continue to be redundant,” the association said.

Emmanuel Addeh

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