MANY middle-income earners are still struggling to access affordable homes, citing financial difficulties, rising inflation, and the weakening of the naira as major concerns, The ICIR findings have shown.
President Bola Tinubu’s administration came up with the Renewed Hope Housing scheme initiative aimed at providing affordable housing to Nigerians.
However, findings by The ICIR showed the scheme is falling short of its expected impact of bridging an estimated 20 million housing deficit.
When President Tinubu assumed office in May 2023, he admitted that access to decent housing is not just a matter of shelter but a cornerstone of national development, adding that it promotes social stability, improves health outcomes, reduces poverty, and drives inclusive economic growth.
Although the government has rolled out some policies, checks by The ICIR show that inflation, inefficient data, lack of local manufacturing hubs, as well as high interest rates, are still some of the issues affecting affordable housing for would-be homeowners.
Ayo Olowookere, the President of the Mortgage Bank Association of Nigeria (MBAN), faults the government’s strategy in bridging the housing deficit gap, while stressing the importance of attracting private capital with good policy initiatives to close the housing deficit gap.
“A lot of factors determine the price and affordability of a house. Location is a key component. When you say affordable housing, it ranges from N10 million to N100 million relatively. Can our mortgage systems, affected by high interest rates, policy inconsistency, and currency devaluation, allow a middle class to conveniently own a home?”
“The government needs to know that it’s not its duty to build 20 million houses. The focus should be ability to attract private capital into this industry with good policy incentives and intervention funds,” he said.
The government needs to know that it’s not its duty to build 20 million houses. The focus should be ability to attract private capital into this industry with good policy incentives and intervention funds,
He suggested to the government to step up arrangements that bring in capital that bridges the housing deficit gap.
“The government needs to understand also that from the supply side, we can only show ‘proof of consent'(build an estate in a certain area of Nigeria and work with manufacturers on supplying building material at a subsidised rate).
“Once you replicate this in some local government areas, you can work towards attracting private capital from investors because the government cannot bridge the housing gap alone,” he said.
He stressed the need for policy continuity, noting that,” it’s an assurance to investors as no one wants to invest in an area where there’s no clarity and policy consistency.”
Rising inflation and its impact on cost components of housing
Inflation remains the sector’s most severe challenge. The National Bureau of Statistics (NBS) released its Consumer Price Index report for April 2025, revealing a slight easing in Nigeria’s inflation rate compared to previous months and the same period last year.
The inflation rate moderated to 23.71 per cent year-on-year, marking a decline from 24.23 per cent recorded in March 2025 and a sharp reduction from 33.69 per cent in April 2024.
However, analysts say inflation at over 20 per cent remains high for meaningful development in the industry.
“Investors are eyeing huge returns from their investment. With high interest rates by commercial banks informed by the Central Bank of Nigeria’s monetary policy measures, it’s really difficult to attract private capital currently into Nigeria’s housing sector,” a development economist, Kingsley Obiakor, told The ICIR.
A key driver behind this inflationary pressure is the depreciation of the naira, coupled with global commodity price shocks, both of which have severely inflated the cost of building materials.
Another structural problem is the dearth of reliable housing data. The government has no comprehensive audit of existing, abandoned, or informal housing stock, thereby complicating effective policy formulation and resource allocation.
Civil servants difficulties accessing homes
For some civil servants, the experience of accessing housing through primary mortgage institutions is, in most cases, not a pleasant one.
“Most civil servants struggle to make the equity contributions to their primary mortgage institutions because of high inflation. In most cases, when they do, they are not guaranteed that their file will get the needed attention and access to own a home.
“Many of my colleagues made some equity contributions, followed through with the information they got from the website, yet they didn’t have a breakthrough. I got mine because I know someone in the Federal Mortgage Bank who was a classmate, and she assisted me, linked me with an estate owner. Sometimes, your file will be there without anyone pushing it,” Ebube Okafor, a civil servant, told The ICIR.
“I made efforts to get a N24 million 2-bedroom flat from Brains and Hammers last year. I am to pay 20 per cent as a precondition to access the house. How many civil servants can be able to pay this money with other conditions before accessing the house with the current level of food inflation?” she queried.
Experts’ concerns about affordable housing
Other experts in the real estate sector told The ICIR that with the devaluation of the naira, many mortgage institutions struggle for repayment, and are left with no option but to increase rents.
“The value of the naira three years ago is not the same today. Let’s say you translated N1.5 million into dollars three years ago; if translated today, can it fetch you a quarter of what it used to be years back? No! It’s the economy that’s driving the cost of rent,” Stephen Ola Jagun, a facility manager and the vice chairman of the Estate Surveyors and Valuers Registration Board of Nigeria, told The ICIR.
“The naira value of an investment 10 years ago is not the same today. Some clients told me that the annual returns from their investments can no longer take care of their mortgage because of the loss in naira value,” he added.
The ICIR reports that affordability remains an issue despite the government’s efforts, with some policy initiatives focused on the housing sector.
“Affordability is at the core of bridging the housing gap. How do people working afford a decent home? Every administration comes in with its initiatives, as we also have a growing population.
“The first problem that I see is that the government needs to come to terms that they need to provide leadership in the sector. We have the renewed hope housing initiatives. We also have social housing initiatives.
“All these initiatives give us roughly 800,000 units of housing per annum. We need to be consistent so that, at least in the next decade, we would have cracked the housing deficit numbers. This will come with lots of coordination of policy by the government,” he stressed further.
He added that the government needs to coordinate solutions geared towards solving housing problems by bringing all policy actors and stakeholders into a coordinated plan to achieve targeted results.
Can recapitalisation of Mortgage Bank do the magic?
The Federal Mortgage Bank of Nigeria (FMBN), which is tasked with promoting mortgage access in the country, has on several occasions called for its recapitalisation, from the current N2.5 billion to N500 billion.
According to its managing director, Shehu Usman Osidi, such recapitalisation would promote the growth and development of the mortgage system in Nigeria.
“To stem the national housing deficit, the country will need to produce an average of 550,000 housing units per annum for the next 10 years. The financial outlay for this annual housing target is over N5.5 trillion per annum,” Ahmed Dangiwa, Nigeria’s minister of housing and urban development, revealed at an international housing show recently.
On the flipside, according to the minister, the country’s average annual housing production is about 100,000 units, mostly through predominantly informal, incremental self-construction dictated by the availability of excess household income, scarce savings, or loans from friends and relatives.
To worsen this situation, the government’s budgetary provision to housing has never been allocated N11.5 billion for the construction of 20,000 housing units for the Renewed Hope Agenda’s housing scheme.
Besides finance, Nigeria is faced with a huge population. Estimated at over 200 million growing at about 2.52 percent per annum, the high urban-rural ratio of about 50 percent. Also, it is growing at an astronomical rate of 4.3 percent per annum, and perennial unfavourable regulatory and macroeconomic factors.
“The combination of these unfortunate circumstances has resulted in a significant housing gap estimated at millions in the double digits,” Shehu Osidi said.
“In addition, the nation’s dismal record of untitled land implies that about $300 billion, roughly 60 per cent of national GDP, is ‘dead capital’ as the owners cannot realise tangible earnings or utilise the assets to improve their economic status,” he added.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.