Homeownership Hope Dims As 2014 Housing Budget Shrinks 40% To N18.5bn

Odinaka Mbonu
 

T

he hope of most mid-low income earners to become homeowners in 2014 may have dimmed as the Federal Government in this year’s budget estimate allocated just N18.5 billion to the Ministry of Lands, Housing and Urban Development, representing 40 percent decrease from the N36 billion that was given to the ministry in last year’s budget.

Of this figure, N5 billion is for recurrent expenditure, leaving only N13.5 billion for capital expenditure on housing and urban development, meaning that even if this allocation is spent 100 percent, the ministry would be able to build just 2,600 two-bedroom bungalows at a conservative unit price of N5 million.

Analysts say this is just a drop of water into an ocean in a country where housing deficit is over 17 million, a projected annual housing delivery of 72,000 housing units and home ownership level a little above 10 percent.

The allocation of N18.5 billion out of the projected N4.6 trillion 2014 budget, representing just 0.39 percent of the entire budget, also shows a 60 percent decline in capital expenditure for the sector as the N30 billion earmarked for same in 2013 has been slashed to N12 billion. This has raised concerns among housing industry stakeholders as it belies Federal Government’s promise of mass housing for the growing population of the un-housed in the country.

“The Federal Ministry of Housing has been handicapped in executing mass housing projects in recent times because of the poor allocation from the Federal Government,” said an industry stakeholder.

According to him, most of the ongoing housing projects in different parts of the country are financed by private firms through Public Private Partnership (PPP) scheme as the ministry has been constrained by lack of adequate funds to execute projects.

Ladi Lewis, chairman, Nigerian Institute of Architects (NIA), Lagos State chapter, blamed the low homeownership level on lack of a sustainable policy by the Federal Government to provide an enabling environment for low-income earners to own affordable houses.

“Governments in most parts of the world do not concern themselves with providing affordable housing for their populace anymore. Rather, they create the enabling environment for private developers to thrive and that is what is expected in Nigeria,” Lewis said.

“I will suggest that the Ministry of Housing concerns itself more with providing infrastructure such as roads and drainages in remote areas to entice real estate developers to veer into these areas,” he further said.

It would be recalled that the Federal Government has, in recent times, adopted several mass housing policies, such as building one million housing units yearly for the next 50 years, as it aims to avert an impending crisis in the sector by 2020. However, stakeholders have expressed reservation on the government’s political will to execute such an ambitious project.

Source: BusinessDay