Affordable Housing in Nigeria; Role of the Private Sector

Finding a lasting solution to the challenges of affordable Housing has remained elusive to an average Nigerian, despite the numerous programs put in action by the various government of the country. Housing being one of the basic necessities of man alongside food and clothing remains a critical issue in the socio-economic well-being of any country.

The population of the country was estimated to be over 140 million people as at 2006 population census and believed to be over 170 million today and predicted by the United states census bureau to be 264 million by 2050. This figure places enormous pressure on the existing yet limited housing facility in the country that already suffer problems of high cost of rent, overcrowding, over utilization of infrastructural facilities and insecurity.

The housing sector in Nigeria has remained one of the under developed sector of the economy in spite of the high allocations it receives yearly.  The housing sector composed of two distinct markets – the private sector market and the public sector market, has not been able to meet up with the demand especially those that adequately accommodate the financial capacity of the low-income class.

Several factors identified as the reason for the relatively high-cost building in major cities in the country are;

  • Rapid urbanization resulting into urban population growth due to high fertility rate, rural –urban migration etc.
  • High cost of building materials caused by high cost of production and extraction as well as dependence on imported materials to supplement local sources
  • lofty and expensive designs adopted by building professionals
  • deficiency of indigenous technology and skilled manpower resulting from the engagement of foreign expatriate and even artisans from neighboring countries

Although the government through the public sector market has invested into developing various low-cost housing schemes across the Federation the pace of urbanization seems to be surpassing the capacity of governments to deliver affordable housing

Role of the Private Sector in Providing Affordable housing

The private sector involvement in providing affordable housing is beyond just direct housing construction but extends to the manufacturing of all types of building materials, the supply of labor and capital.

The private sector in the context of this article comprises of members of the real estate developers association of Nigeria, private equity funds, Real Estate Investment Trust (REIT) and financial institutions that have real estate departments.

The roles of the private sector can be summarized to include;

  • Development of physical houses
  • Provision of access to affordable mortgage options
  • Investing in mortgage securities
  • Production and supply of building materials, particularly local content.

The concept of private sector involvement in housing financing, delivery, and maintenance system is based on the pooling together of resources from the various stakeholders, each party making decisive inputs.

Fundamentals that should guide the private sector in low-cost housing delivery to the public are:

  1. Affordability: What determines the affordability of a project are household income and price of housing. Affordability in the case of home ownership or rental is defined as owning a house with a value equal to slightly more than twice the household annual income or renting a house not more than 30 per cent of the household gross monthly income.
  2. Target Group: The private sector should target the low and the middle-income groups in its housing provisions. These groups constitute the masses of this country and from about 90 per cent of the country’s population
  3. House Ownership/Rental Option: Houses should be developed on both owner-occupier and rental basis so as to promote a vibrant housing market in the country. A logical mix of rental housing and rent-to-own projects will be able to accommodate the different housing needs of low-income earners in the country.
  4. Design/Construction: A realistic and functional design that minimize cost and enhance utility should be adhered to by the private sector. Value Management The objective of private sector involvement in housing development is to achieve value maximization in relation to the cost.

Meeting the housing deficit in Nigeria isn’t a task that could be undertaken and conquered by one sector in isolation. Hence there is a pressing demand for a strong public-private partnership within the sector to meet the housing deficit in the country.


Real Estate Unite 2017 (the largest Real estate event in Africa) provides the needed platform for dynamic public-private partnership geared towards providing lasting solutions to effectively tackle the challenges of affordable housing in Nigeria especially within major cities like Lagos, Abuja, Port-Harcourt among others.

The event also unites all sectors of Africa’s property industry to network, learn, showcase and discuss opportunities as well as proffer solutions to other major issues that have so far limited the growth of the sector.

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