Presidential Research & Communications Unit - Land Tenure Changes & Home Ownership

Nigeria has a huge housing deficit, evidenced by low levels of the real estate sector and mortgage credits to the sector, accounting for less than 1% and 0.5% of GDP respectively. This is what led to the evolution of the current National Policy on Urban Development and Housing that provides for a private sector-led housing policy with the government providing the enabling operating environment.

The paucity of long term funds has been the bane of housing finance in Nigeria and the banking sector has consistently demonstrated its aversion to financing home ownership. Our legal and regulatory environment is characterised by archaic laws inhibiting efficient land transaction, while prevailing monetary and fiscal parameters are not conducive for sustainable housing finance. Furthermore, the existence of weak primary mortgage structures with attended weak capitalisation, poor corporate governance and technical skill deficiencies have worsened the situation.

The solutions to land administration problems, therefore include: expunging the Land Use Act from the Constitution; review of the Land Use Act particularly removing of the provision pertaining to Governor’s consent to assign and mortgage; establishment of specialised courts to determine the terms and timing of challenge/contestation of foreclosure; computerisation of all land related records at all levels among others. Others include the need to persuade State Governments to convert their Housing Corporations into land companies with mandate to develop new towns in the states, reorganising the Federal Housing Authority (FHA) to provide mortgage insurance for affordable housing, passage of foreclosure and securitisation laws, sustaining the Federal Mortgage Bank of Nigeria as a secondary mortgage institution refinancing mortgage loan originators through the capital market and the provision for legal protection of lenders against bankruptcy to attract investors in housing finance.