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National Trends in Housing-Production PracticesVolume 4: Nigeria

Table of Contents

Foreword

I. Changing shelter policies in Nigeria

A. Changing objectives in the shelter sector

o 1. Colonial period

o 2. Post-independence period (1960-1979)

o 3. Second civilian (Shagari) administration period (1980-1983)

o 4. Second military interregnum (1984-1993)

B. The current shelter policy and its links with the overall economy

C. Objectives of the National Housing Policy

o 1. Organization for shelter delivery

o 2. Federal government agencies

o 3. State governments

o 4. Local governments

o 5. Private-sector participation

D. Legal and regulatory framework for shelter delivery

E. Mobilization and allocation of financial resources

o 1. Financing for infrastructure

o 2. Financing for housing

o 3. Targeted subsidies

F. Shelter production and improvement

o 1. Land management

o 2. Infrastructure

o 3. Building materials and technology

G. Scope and scale of the shelter problem

o 1. Housing stock

o 2. Housing needs

o 3. Housing demand

II. Housing supply at the national level

A. Actors in the shelter-delivery process

o 1. Government and public-sector agencies

o 2. Private sector

o 3. NGOs, CBOs and cooperatives

o 4. Households

B. Housing finance

o 1. Household savings for housing

o 2. Housing loan systems

o 3. Housing finance in rural areas

o 4. Loans granted by staff housing boards

o 5. Creating a new housing-finance system

o 6. Incentives for investment in housing

o 7. Subsidies in the housing sector

o 8. Affordability and cost recovery

C. Housing production

o 1. Traditional housing schemes

o 2. Sites-and-services schemes

o 3. Settlement-upgrading schemes

o 4. The World Bank-assisted Urban Development-Programme (NSUDP)

o 5. Informal-sector activities

III. Lagos Metropolitan Area (LMA)

A. Scope and scale of the shelter problem

o 1. Housing stock

o 2. Housing needs

B. Actors in the shelter-delivery process

o 1. Government and public-sector agencies

a. The Federal Government

b. The state government

c. The local governments

o 2. Private-sector actors

o 3. Housing-finance institutions

C. Housing production

o 1. Traditional housing

o 2. Sites-and-services scheme

IV. Adoption of enabling shelter strategies and alleviation of the housing problem in Nigeria

A. Obstacles to an effective housing supply

B. Shelter programmes and activities and the low- income groups

C. Conclusions and recommendations

Bibliography


List of Tables

Table 1. Exchange rate US$ - Naira

Table 2. Planned federal expenditure on housing programmes during the 4th national development plan (1980-1985)

Table 3. Programme outline for private estate developers, Lagos

Table 4. Shelter quality in southern states of Nigeria

Table 5. Infrastructure Development Fund: participants, roes and financing plan

Table 6. Provisional population, Nigeria, by state (1991)

Table 7. Estimated household population, Nigeria (1991)

Table 8. Percentage distribution of households, by dwelling types, Nigeria (1984-1985)

Table 9. Estimated housing stock, by dwelling types, Nigeria (1991)

Table 10. Housing tenure, Nigeria (1984-1985) (percentage)

Table 11. Estimated housing needs Nigeria (1991-2001)

Table 12. Household income groups, Nigeria

Table 13. Income groups, Nigeria (1992)

Table 14. Housing prices by types, Owerri, Nigeria (1992)

Table 15. Household incomes and dwelling type options, Nigeria (1992)

Table 16. Housing demand, by type of dwelling units (1992)

Table 17. Sources of housing finance in selected states of Nigeria (per cent) (1980)

Table 18. FMBN savings instruments (1985-1986)

Table 19. FMBN mortgage loan applications funds

Table 20. Types of lending body preferred, northern states

Table 21. Housing construction by the Federal Government Staff Housing Board

Table 22. Housing production by FHA

Table 23. Allocation of plots under the National Sites and Services Scheme (1988-1993)

Table 24. Housing stock, LMA, by type

Table 25. Housing needs, LMA

Table 26. Housing demand, LMA

Table 27. Housing supply, LMA

Table 28. LSDPC low-cost housing production in LMA (1989-1990)

Table 29. LSDPC medium-income housing production in LMA (1989-1990)

Table 30. LSDPC upper-medium income housing production in LMA (1989-1990)

Table 31. Housing projects executed by HFP Engineering (Nig) Ltd

Table 32. The National Sites-and-Services Scheme (number plots allocated)

Table 1. Exchange rate US$ - NairaYear N/$

1976 0.501980/81 0.801982-1985 (average) 11986-1988 3-5April 1992 after deregulation) 10January 1993 18April 1993 (official) 25April 1993 ("parallel" market) 36.501 May 1993 ("parallel" market) 29-30Source: Achunine, 1993.

Table 2. Planned federal expenditure on housing programmes during the 4th national development plan(1980-1985)

Programme Content

Estimatedtotal cost

(mill ion N)Federal housing units Providing 2000 housing units per state 500Development of sites-and-services Providing 5000 plots of serviced land per state 100Staff Housing Scheme Granting housing loans to civil servants (N 40,000 per person) 175Federal Government quarters in states Construction of suitable quarters 200Industrial complex layouts Provision of plans and infrastructure at industrial sites 170Construction of housing units Development of 143,000 housing units per state in 19 states 200

Mortgage operationExpansion of mortgage services, with emphasis on medium- and low-incomegroups 300

Total 1,645Source: Onibokun (Ed.), 1985..

Table 3. Programme outline for private estate developers, Lagos

Type of scheme Deve lopers responsabilitie s

Estimated execution time(years), by area

UrbanUrbanfringe Rural

Limited lay out Preparation or provision perimeter survey, lay out earth roads, functionaldrainage, beacon sheets, report on programming.

2 3 4

Comprehensivesites-and-services

Preparation/provision of: perimeter survey, lay-out plan, beacon sheets,functional drainage, tarred roads, sewage water (borehole), and electricity,feasibility and viability report

5-6 6-7 7-8

Comprehensiveland-developmentscheme

Preparation/provision of: perimeter survey, lay-out plan, beacon sheets,tarred roads, sewage, pipe borne water, electricity and telephone linesfeasibility and viability report, design and construction of buildings

9 9 9

Source: The Guardian, 8 January, 1990.

Table 4. Shelter quality in southern states of NigeriaMeasure Urban Rural

Buildings more than 24 years old 20.6 32.1Buildings needing major repairs or dilapidated 21.3 40.8Buildings without pipe borne water 24.7 75.9Buildings without electricity supply 16.6 68.2Buildings without W/C 68.0 87.8Buildings without toilets 4.0 28.8Buildings without surfaced access roads 63.4 n.a.Source: FRN, 1982; Onibokun (ed.),1985.

Table 5. Infrastructure Development Fund: participants, roes and financing plan

Participants RolesFinancial

contributionFederal Ministry ofWorks and Housing

Overall policy guidelines and coordination; liaison with the Central Bank, participatingfinancial institutions and Federal Ministry of Finance and Economic Development

Contribution tosub-projects

Participating merchant/commercial banks

Act as financial intermediaries; assist states to identify and prepare subprojects forfinancing; co-finance, on-lend and disburse funds to States; supervise the execution ofsub-projects; and undertake debt service collection

10 per cent

Participating stategovernments

Identify, prioritize, prepare and submit sub-projects for financing; co-financesub-projects; and service the debt of sub-projects

15 per cent

World Bank Co-finance sub-projects; review all sub-projects costing above a stipulated amount; andprovide technical assistance where necessary

75 per cent

Source: Achunine, 1993.

Table 6. Provisional population, Nigeria, by state (1991)

RegionState a

Population O ld name New name

North

Bauchi Bauchi 5,104,413

BenueBenue 2,780,398

Kogi 2,099,046

Kwara Kwara 1,566,469

Borno

Borno 2,596,589

Yobe 1,439,526

Gongola

Adamawa 2,124,049

T araba 1,480,590

Kaduna

Kaduna 3,969,252

Katsina 3,778,344

Kano

Kano 5,632,040

Jigawa 2,829,929

Niger Niger 2,482,367

Plateau Plateau 3,283,704

Sokoto

Sokoto 4,392,391

Kebbi 2,062,226

Abuja Abuja 378,671

South

Anambra

Anambra 2,767,903

Enugu 3,161,295

Bendel

Edo 2,159,848

Delta 2,570,181

Cross River

Cross River 1,865,604

Akwa Ibom 2,359,736

Imo

Imo 2,485,499

Abia 2,297,978

Lagos Lagos 5,685,781

Ogun Ogun 2,338,570

Ondo Ondo 3,884,485

Oyo

Oyo 3,488,789

Osun 2,203,016

Rivers Rivers 3,983,857

T OT AL 89,252,546a Old and new names refer to names of states before and after August 1991Source: Achunine, 1993 (citing 1991 National Census).

Table 7. Estimated household population, Nigeria (1991) Urban Rural Total

Population 21,597 66,916,962 88,514,500Average household size 4.8 5.6 5.4Number of households 4,499,487 11,949,457 16,448,944Source: Achunine, 1993 (citing the 1991 National Census).

Table 8. Percentage distribution of households, by dwelling types, Nigeria (1984-1985)Dwell ing type Urban Rural

Whole building 6.5 23.5Duplex 0.4 0.1Flat 3.8 1.5Room 89.3 74.9Total 100.0 100.0Source: FOS. 1986: 53-54.

Table 9. Estimated housing stock, by dwelling types, Nigeria (1991)

Dwell ing

Urban a

Rural

Total

Percentage Units ('000)Percentag

eUnits('000)

Percentage

Units (‘000)

Maisonette (mansion) 2 67 0 12 1 79Duplex 3 101 0 - 1 101Detached bungalow 10 337 20 2,289 17 2,627Semi-detached bungalow 2 67 1 60 1 127Flat 15 506 0 - 3 506Room 65 2,194 77 9,200 74 11,393Others 3 101 2 287 3 388Total 100 3,373 100 11,848 100 15,221a 25 per cent housing shortage assumed for urban areas.

Source: Based on Achunine, 1993.

Table 10. Housing tenure, Nigeria (1984-1985) (percentage)Type of tenure Urban Rural

Owner-occupier 32.6 73.9Renting 42.2 12.7Free 25.2 13.4Total 100.0 100.0Source: FOS, 1986:53-54.

Table 11. Estimated housing needs Nigeria (1991-2001) Urban areas Rural areas Total

Housing stock 1991 ('000 units) 3,373 11,848 15,221Estimated number of households 2001 ('000) 7,289 15,295 22,584Required output 1991-2001 ('000 units) 3,916 3,447 7,363Required annual output, 1991-2001 ('000 units) 391.6 344.7 736.3Source: Based on Achunine, 1993.

Table 12. Household income groups, NigeriaMonthly household income (N) Percentage of total population

< 100 45100-199 30200-299 1 4300-399 8500 + 4Total 101N= 4,668 households.Source: FOS, 1986.

Table 13. Income groups, Nigeria (1992)Income grup Percentage of all households Monthly household income (N)

Lowest 30 1-250Low 63 251-1250Middle 5 1251-2500High 2 2500 +Source: Achunine, 1993.

Table 14. Housing prices by types, Owerri, Nigeria (1992)

Housing type

Estimatedmarket value(N thousands)

Estimatedmonthly rental

value (N)Maisonette 1,200-2,000 1,500-2,000Duplex n.a. n.a.Detached bungalow w/1 bedroom 150-180 200-250Detached bung&low w/2 bedroom 300-350 350-400Detached bung&low w/3 bedroom 450-500 800-1,000Detached bungalow w/4 bedroom 600-700 1,200- 1.500Semi-detached bungalow w/2-3 bedrooms 300-350 400-500Block of flatsa w/1 bedroom 700-800b 160-200c

Block of flatsa w/2 bedroom 1,000- 1,200 -50Block of fiatsa w/3 bedroom n.a. -100Room in tenement building n.a. 50-60Room in "shanty" dwelling n.a. 10-30a A typical block contains 6 flats.b For entire block.c For a single flat.Source: Achunine, 1993.

Table 15. Household incomes and dwelling type options, Nigeria (1992)Income group Dwell ing options

Lowest Room in shanty dwellingsLow Room in tenement dwelling; and 1-bedroomed flat (in block of flats)Middle 2-3 bedroomed flats; 1-2 bedroomed detached bungalow; and 2-3 bedroomed semi-detached bungalowHigh 3-4 bedroomed detached bungalow; duplex; and maisonetteSource: Achunine, 1993.

Table 16. Housing demand, by type of dwelling units (1992)Dwell ing types Percentage of demand

Rooms; and l-bedroomed flats 90.0T wo-bedroomed flats; and 1-2 bedroomed bungalows 7.13-5 bedroomed bungalows; duplexes; and maisonettes 2.9Total 100.0Source: Achunine, 1993.

Table 17. Sources of housing finance in selected states of Nigeria (per cent) (1980)State Building socie ty Bank loan Loan from employer Loan from family Personal e fforts Total

Gongola 0 0 1 1 99 101Kano 2 15 8 17 58 100Kaduna 6 17 9 9 59 100Anambra 0 13 4 14 69 100Rivers 0 3 0 0 97 100Bendel 3 7 1 12 77 100Oyo 6 2 1 12 84 105Lagos 5 5 3 7 79 99Source: UNCHS (Habitat), 1991.

Table 18. FMBN savings instruments (1985-1986)

Category of savingAnnual interest rate

(percentage)Popular savings 9.5T arget savings 9.75T erm savings 9.75-10Children's savings 10Source: Achunine, 1993.

Table 19. FMBN mortgage loan applications fundsYear Loan applications (N) Available funds (N)

1979 223.3 95.81980 350.9 128.91981 584.5 89.71982 676.8 74.01983 535.0 68.51984 418.6 81.5Total 2,789.1 538.4Source: Achunine, 1993.

Table 20. Types of lending body preferred, northern statesState Coperatives Local government State government Friends

Kano/Kaduna 28 1 24.2 29.8 17.9Benue/Plateau 16.9 20.2 22.6 40.3Borno 8.3 6.3 38.2 47.2Sokoto 2.8 5.0 28.4 63.8Niger 26.4 21.9 26.4 25.2Bauchi 24.4 25.2 25.2 25.2Gongola 13.3 3.3 17.8 65.6Kwara 49.0 14.3 32.7 4.0Total 17.8 13.8 28.0 40.4N= 807 respondents.Source: FMH&E & ABU, 1981:121.

Table 21. Housing construction by the Federal Government Staff Housing BoardYear Amount committed ( N'000)

1980 10,3291981 16,3281982 n.a.1983 16,3281984 7,293Source: Achunine, 1993.

Table 22. Housing production by FHALocation (state ) Number of unites Status of occupiers and units

Lagos (Lagos)

FEST AC 15,000 Varied: low-, middle- and high-incomeIpaja 4,000 Mostly low- and middle-incomePrototype 100 Low-income

Akure (Ondo) 320 Mostly low- and middle-incomeBenin (Edo) 162 (suspended in 1989)Sokoto (Sokoto) 81 Middle-income

Port Harcourt (Rivers)

T rans-Amadi layout(Abuloma) 48 High- and middle-incomeRumueme 44 High- and middle-income

Owerri (Imo) 320 High- and middle-incomeCalabar (Cross River) 120 (suspended)

Abuja (FCT )

Karu 251a High- and middle-income

Kubwa Estate 1,3162 bedroomed terraced and semi detached, low- andmiddle-income

Maitama District 620b 2-3 bedroomed flats, low- and middle-incomeAsokoro Estate 126 2-4 bedroomed units, mixed

Kano (Kano)Sharada 169 3-4 bedroomed bungalows, high and middle-incomePrototype 9 Detached and semi-detached, middle- and high-income

Kaduna (Kaduna) 176 Detached and semi-detached, middle- and high-incomeMinna (Niger) Bosso Estate 260 2-3 bedroomed bungalowsTotal 23,134 a: Bungalows.b: Flats.Source: Achunine, 1993.

Table 23. Allocation of plots under the National Sites and Services Scheme (1988-1993)Project (state ) Number of plots

Akure (Ondo) 305llorin (Kwara) 190Onitsha (Enugu) 485Owerri (Imo) 685Rumeme/Woji (Rivers) 409Sharada/T ukun T awa (Kano) 398Satellite T own (Lagos) 893Isheri Olofin 11 (Lagos) 1,585Abesan 1 & 11 3,312Total 8,072Source: Achunine, 1993.

Table 24. Housing stock, LMA, by typeArea Single -family Flat or apartment Rooming type Total

Lagos Island 3.9 0.2 95.9 100.0Ebute-Metta 4.8 4.8 90.4 100.0Yaba 3 0 9.6 87.4 100.0Surulere 38 1 12.0 49.9 100.0All areas 19.5 7 3 73.2 100.0N = 1566 households.Source: Achunine, 1993, citing a LEDB study.

Table 25. Housing needs, LMAParticulars 1970-1974 1975-1985

Household formation (natural population and migratory growth) 47,800 177,440Accumulated deficit and demolitions arising from public works 12,000 20,000Replacement of substandard dwellings 44,920 510,000Vacancy reserve and units converted to secondary uses 6,282 55,120Total 111,002 762,560Source: Achunine, 1993.

Table 26. Housing demand, LMASource of demand 1976-1980 1981-1985

New households 84,000 90,000T o eliminate overcrowding 17,000 19,000Immigration 52,000 54,000Relocation of displaced households 1,200 1,500Total expected demand 154,200 165,500Source: Achunine, 1993.

Table 27. Housing supply, LMASource of supply 1976-1980 1981-1985

Number of houses completed with official approval 7,919 9,775Number of houses completed without permit (estimate) 2,000 3,000FEST AC housing scheme 15,000 0Houses vacated (by dissolved elderly households, out-migrants etc.) 2,000 6,000Nigerian Building Society 3,200 7,580LSDPC projects 2,140 3,200Federal Housing Scheme etc. 15,000 15,000Sub-total 47,259 44,564Less demolitions for public works 4,000 6,000Total supply 43,259 38,564Source: Achunine, 1993.

Table 28. LSDPC low-cost housing production in LMA (1989-1990)

Name of e state

Number of unitsStarted

Comple ted

1989 1990 1989 1990Abesan 21 122 8 4,272Abule-Nla - - - 90Akerele - - - 18Amowu Odofin 7 - 8 2,968Anikantomo - - 5 714Badagry 10 - 1 6Bank Olemoh - - - 36Dolphin - 576a - -Epe 10 48 - 12Iba - 828 114 1,560Ijaiye 2 6 116 702Ijeh 7 - 38 462Ikorodu 11 - 2 78llasan 72 n.a. 216 n.a.Iponrin - - 10 1,002Isolo 6 32 30 3,632Ita-Agarawu - - 3 18Itire - - - 42Lawanson 5 30 - -Ojokoro 11 12 79 528Oko-Awo - - 8 48Surulere - - - 24Total 157 1,624 643 16,242a In 1991.Source: Achunine, 1993.

Table 29. LSDPC medium-income housing production in LMA (1989-1990)

Name of e state

Number of unitsStarted

Comple ted

1989 1990 1989 1990Alaperc 2 - 3 56Amuwo Odofin - - - 36Ijaiyea 7 108 128 492Ogba - - - 52Omole - - - 100Opebi (Maryland) - - - 20Total 9 0 131 756a An additional 108 units was started and 28 units completed in 1991.Source: Achunine, 1993.

Table 30. LSDPC upper-medium income housing production in LMA (1989-1990)

Name of e state

Number of duplexesStarted

Comple ted

1989 1990 1991 1989 1990 1991Amuwo-Odofin 7 86 43 Dolphin Scheme 298 250 236 1 400 656Dolphin Phase 11 Herbert MacauleyScheme 31 - 26 528 Isolo (Bungalow duplexes) - 320 - -Ojota-Ogudu GRA - 6 45 Total 329 263 642 27 1,016 656Source: Achunine, 1993.

Table 31. Housing projects executed by HFP Engineering (Nig) LtdNumber and type of units Client

4 units of accommodation for ratings Ministry of Defence (Navy)108 one-bedroomcd units Ministry of Defence (Navy)36 two-bedroomed units Ministry of Defence (Navy)80 three-bedroomed units Ministry of Defence (Navy)24 four-bedroomed units Ministry of Defence (Navy)14 four-bedroomed duplexes Ministry of Defence (Navy)2 five-bedroomcd duplexes Ministry of Defence (Navy)16 domestic quarters Ministry of Defence (Navy)1 bachelor officers' quarters Ministry of Defence (Navy)Dolphin Phase 1: 620 duplexes Lagos State Govt.Dolphin Phase 11: 136 two-bedroomed flats LSDPC

138 units of three-bedroomed flats 216 units of duplexes Lagos State Govt. Ebute Motto Scheme Ikota Low Income SchemeDany Estate 6 units of five-bedroomed detached houses HFP32 units of four-bedroomed duplexes HFP1434 high-income units, Victoria Garden City Estate HFPSource: Achunine, 1993.

Table 32. The National Sites-and-Services Scheme (number plots allocated)

LocationDensitie s

Industrial TotalHigh Medium LowIsheri-Olofin (Phase 1 & 11) 886 1,417 478 109 2,890Abesan - Suleru Oje 97 882 98 41 1,138Abesan - Aboru 416 1,477 322 7 2,222Satellite T own - - 473 - 473T otal 1,399 3,776 1,371 157 6,723Source: Achunine, 1993.


List of AcronymsCBN Central Bank of NigeriaCBO Community-based organizationFCT Federal Capital TerritoryFHA Federal Housing AuthorityFMBN Federal Mortgage Bank of NigeriaFMH&E Federal Ministry of Housing and EnvironmentFMW&H Federal Ministry of Works and HousingFOS Federal Office of StatisticsFRN Federal Republic of NigeriaGRA Government Reservation AreaGSS Global Strategy for Shelter to the Year 2000IDF Infrastructure Development FundLEDB Lagos Executive Development BoardLMA Lagos Metropolitan AreaLSDPC Lagos State Development and Property CorporationN NairaNBRI National Building Research InstituteNBRRI Nigerian Building and Road Research InstituteNBS Nigeria Building SocietyNEP PLC National Electrical Power PLCNEPA National Electrical Power Authority (Now NEP PLC)NGO Non-governmental organizationNHF National Housing FundNISER Nigerian Institute of Social and Economic ResearchNITEL Nigerian Telecommunications Limited


Bibliography

Aaron, Henry, J. 1972. Shelter Subsidies: Who Benefits from Federal Housing Policies? Washington, D.C., TheBrookings Institution.

Abrams, Charles. 1964. Housing in the Modern World: Man's Struggle for Shelter in an Urbanizing World, Cambridge,MS., M.I.T. Press.

Achunine, B.O. 1977. "Dynamics and strategies for urban housing and infrastructure in developing countries: a casestudy - Lagos Metropolitan Area, Nigeria", unpublished Ph.D. Dissertation, Michigan State University, 1977.

Achunine, B.O. 1989. "Financing investment programmes for human settlements developments in Nigeria-, case studyprepared for UNCHS (Habitat), Nairobi.

Achunine, B.O. 1990. "Residential stability of the inner-city urban poor: evaluation of relocation experience in Nigeria",case study prepared for UNCHS (Habitat), Nairobi.

Achunine, B.O. 1993. "National trends in housing production practices in Nigeria-, case study prepared for UNCHS(Habitat), Nairobi.

Association of Housing Corporation of Nigeria. 1977. Nigerian Housing and Development.

Baross, Paul (ed.). 1981. Experiences with Settlement Improvement Policies in Asia: Four Case Studies, Rotterdam, BIEForum.

Chief Statistician. 1990. Urban Consumer Surveys in Nigeria, Lagos, Federal Office of Statistics.

Federal Department of Information, Policy Division. 1981. "2 years of President Shagari's Administration-, Lagos.

Fingerhuth and Partners. 1977. Imo State Capital Owerri, Master Plan Twin City Zurich and Owerri, May.

FMH&E and Ahmadu Bello University, Zaria (ABU). 1981. Rural Housing Research, Final Report.

FMH&E and NISER. 1981. Rural Housing in the Southern States of Nigeria: Final Report.

FMW&H. 1985. Draft Report of Committee on the New National Housing Policy.

FOS. 1986. National Integrated Survey of Households, Report of General Household Survey, April 1981 March 1982,Lagos, Household Survey Unit, FOS.

FRN.1975. Third National Development Plan, 1976-1980, vol. 1. Lagos, National Planning Office, Federal Ministry ofNational Planning.

FRN. 1981. Fourth National Development Plan, 1981-1985, vol. 1. Lagos, National Planning Of Office Federal Ministryof National Planning, Lagos.

FRN. 1985 Report of the Special Committee on New National Housing Policy, Lagos.

FRN. 1990. Draft New Housing Policy, Lagos Federal Ministry of Works and Housing.

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Grimes, Orville F. Jr. 1976. Housing for Low-income Urban Families Economic Planning in the Developing World,Baltimore, The Johns Hopkins University Press.

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LSDPC. 1989. Annual Report, Lagos.



LSDPC (not dated). "Housing delivery in Lagos State - challenges of the eighties".

LSDPC (not dated). "Fifty years of housing and planning development in Metropolitan Lagos: challenges of theeighties-.

Odimuko, C.L. 1987. Shelter for All by the Year 2000. Strategies for Public and Private Sector Involvement in aDepressed Economy, published in commitment to IYSH by the Urban and Regional Planning Division, FederalMinistry of Works and Housing, Lagos.

Odimuko, C.L. 1990. "Evaluation of experience with and initiating Enabling shelter strategies; country case study ofNigeria, prepared for UNCHS (Habitat).

Onibokun, P. 1971. "Housing finance in Nigeria: a critical survey of private and G.A., public sources", Town PlanningReview, vol. 42, No. 3, July.

Onibokun, P. 1975. "A critical review of Nigerian Government housing policy and programmes-, 2nd InternationalConference on Housing, University of Ibadan.

Onibokun, P. (ed.). 1985. Housing in Nigeria (A Book of Readings), Ibadan, NISER.

Report of a Workshop on Urban Planning for Housing and its Infrastructure, Owerri, Imo State, 1986.

Smith, Mary E.H., 1983. Guide to Housing, The Housing Centre Trust.

Smith, Wilbur, and partners. 1976. Master Plan Lagos Metropolitan Area, Lagos.

Strassman, W.P., "Housing strategy in developing countries: costs and simulated consequences", unpublishedmonograph.

UNCHS. 1990a. Shelter For All, Nairobi

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Notes

1. The data contained in this report were collected before the military coup in 1993.

2. A number of those displaced by this scheme settled in the Falomo squatter settlement on Lagos Island. Whenland was needed for the development of a large shopping centre in the mid-1960s, the squatters were evicted.No arrangement was made for their resettlement. Most of them moved to the slum areas of Maroko and Iladowhich wee demolished in 1990.

ABOUTNational Trends in Housing-Production

PracticesVolume 4: Nigeria

HS/313/93 EISBNE 92-1-131489-5 (electronic version)

Text source: UNCHS (Habitat) printed publication: ISBN 92-1-131239-6 (published in 1993).This electronic publication was designed/created by Inge Jensen.

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Foreword

In most developing countries today, the provision of shelter is grossly inadequate. This is so despite severaldecades of direct government intervention in the shelter sector. The adoption by the United Nations GeneralAssembly of the Global Strategy for Shelter to the Year 2000 (GSS) in 1988 implied a global recognition of the severityof the housing problem. Since the public sector has shown itself unable to meet the increasing housing demand, theGSS calls for the adoption of new roles and responsibilities of the various actors in the shelter-delivery process. Itdoes not, however, propose that governments should withdraw from housing. On the contrary, the GSS placessignificant responsibilities on the public-sector agencies for creating an enabling environment and ensuring theavailability of shelter for all. By emphasizing the need for flexibility and local initiative in designing the new housingpolicy, it recognizes that the response of government in various countries may differ, depending on their respectivehousing conditions and the state of administrative and regulative system.

That is the point of departure for this publication, which is a series of four volumes on national trends inhousing-production practices in India, Indonesia, Mexico and Nigeria, respectively. All four countries have recentlyadopted new national housing policies that incorporate the enabling approach advocated in the GSS. Thesepublications identify problems encountered and lessons learned during the process of initiating enabling shelterstrategies. Yet, because the experiences in different countries in many ways are unique, it is necessary to discuss theexperiences gathered against the background of a more comprehensive discussion of the shelter-delivery process inthe individual countries. None of the four publications in this series thus attempts to compare the experiences ofdifferent countries. That has been done - with a particular focus on the lowest income groups - in a separatepublication entitled National Experiences with Shelter Delivery for the Poorest Groups.

The four volumes take a close look at the implementation of the GSS at the national level. They also reviewlessons at the sub-national level, by presenting the experience of the cities of Bombay, Calcutta and Delhi in India;Jakarta and Bandung in Indonesia; Mexico City, Ciudad Obregon and Papa in Mexico; and Lagos in Nigeria. Aparticular emphasis of all four publications is the presentation of data documenting the performance of the sheltersector at large and of the various actors involved therein.

Each of the four volumes consists of four main parts. The first part takes a close look at the development ofnational shelter policies and strategies in the light of the introduction of enabling shelter strategies. It also describesthe scope and scale of the shelter problem in each of the four countries. The second part analyses the changing rolesand responsibilities of the various actors in the shelter-delivery process, including relevant financial institutions andinstruments. It also provides figures on actual housing production at the national level. The third part takes a closerlook at the above issues at the city level. The fourth and concluding part, is just that, a conclusion to the abovediscussion. The chapter highlights obstacles to an effective housing supply, as well as particular innovativeapproaches towards alleviating the housing problem in the country.

The main conclusion that can be drawn from these studies is that the shelter problem today in most developingcountries is worse than it was before massive public-sector interventions were initiated two to three decades ago. Theexample of Indonesia can serve as a good illustration of the rather limited success of two decades of direct shelterprovision by the public sector. Total public-sector housing supply during the entire 1974-1991 period is less than theannual housing need created by population growth alone. Furthermore, there are signs in all four countries thatpublic-sector involvement in housing is being reduced, i.e., while the volume of units produced is increasing,public-sector investments in housing are decreasing. This indicates a trend where the focus of formal-sector housingproduction is turning away from the production of ready-to-move-in units and towards the provision of a wide menuof actions that lead to the construction of a dwelling unit. This results in a situation in which more units (althoughqualitatively different) can be produced with the same amount of funds. Yet, if the total formal-sector investment isreduced, this may indicate the beginning of a trend where the importance of shelter is being reduced rather thanstrengthened.

However, the picture is not altogether bleak. The four publications also show examples of how the shelterproblems can be effectively addressed. We should, nevertheless, keep in mind that in any market, choice is a positivefunction of income. The consequence is that in a situation of housing shortage, the poor have no choice in housing atall. Any strategy to alleviate the shelter problem should keep this in mind. Unless housing supply is fully able to meetthe need, direct interventions are required if the needs of the poorest groups are to be addressed.

We gratefully acknowledge the contribution of Dr. Basil Obi Achunine for the preparation of the case study onwhich this publication is based.

Dr. Wally N'DowAssistant-Secretary-General,

United Nations Centre for Human Settlements (Habitat)


Chapter I. Changing shelter policies in Nigeria

Housing represents one of the most basic human needs and has a profound impact on the health, welfare,social attitudes and economic productivity of the individual. It is also one of the best indications of a person'sstandard of living and of his or her place in society. Despite this essential role played by housing as a basic need, anadequate supply of this commodity has been lacking in virtually all societies throughout history.

The situation is particularly serious in the developing countries where population growth and urbanization areincreasing very rapidly and where the gap between housing need and supply is greatest. This condition remainsbecause housing has typically been regarded as an unwanted stepchild, a frustrating nuisance in the family of projectsthat constitutes development or economic programmes. Paradoxically, past theories of economic developmentregarded housing as a non-productive, durable consumption good or service with an extremely high capital outputratio. Nigeria belongs to the category of countries where the above conditions prevail.

The subject of housing has generated much discussion and interest in Nigeria in the last two decades. This hasgiven rise to calls on the various levels of government to give greater priority to the inherent housing problems and toallocate a reasonable percentage of their annual budget to housing.

Unfortunately, the provision of housing has been generally viewed by policy-makers in Nigeria as something tobe tolerated rather than desired. This attitude has resulted in giving housing a low priority rating (until recently) indevelopment planning. For example, specific output targets have always been set for agriculture, manufacturingindustries, roads, water etc., but housing has been treated as a "social overhead."

Relatively little continues to be done in improving housing supply in comparison with overall needs. Therefore,housing remains one of Nigeria's most intractable problems; one which is continually getting worse as the rapidpopulation growth and consequent urbanization goes on unabated in spite of the seemingly huge assets allocated tothis sector. In fact, it may well be seen as the great Nigerian failure of the last two or three decades. In order to achievethe national objectives of the shelter strategy it should be linked to the overall settlements policies, since shelter is anintegral part of settlements development.

The basic relationship of land to housing is at times not obvious. A house is fixed to land and involves apackage of related goods and services. The house is helpless in escaping development shifts and changingenvironmental conditions as land uses are not readily interchanged. Housing is more than shelter, it encompasses allthe ancillary services and community facilities which are necessary to human well-being. These include the land,utilities and services (infrastructure), access to employment and social amenities as well as the structure or shelteritself.

The relationship between the provision of housing and adoption of urban or city planning measures as aprerequisite to that provision is very fuzzy and sometimes utterly unclear in Nigeria, even among practicingprofessionals in related fields. Urban planning as an integral component of the housing-delivery system has consistedof a framework of rules, presented as being neutral, and legitimized on the grounds of being in the public interest.However, within the urbanized areas of Nigeria characterized by extreme social and economic inequalities, it is notdifficult to show that the neutrality is a myth. Invariably, its impact on different sections of the population is far fromequal - an example of the "social injustice within the city". But evidence of this does not in itself help in identifying themeans by which that situation could be transformed.


Chapter I. Changing shelter policies in NigeriaA. Changing objectives in the shelter sector

A casual review of past housing policies and programmes of both the public and private sectors in Nigeriareveals that effective solutions to housing problems are yet to be found. The varied approaches made by thesuccessive Nigerian Governments towards solving the housing problems have depended mainly upon the specificsituation encountered, the resources they could command and the general attitude towards housing.

Because of the above, Governments in Nigeria have maintained that housing should be an integral part ofeconomic development plans, while encouraging the private sector to be the main source of investment in housing. IDthis way, as earlier said, housing production and delivery has been an important part of national development planningclassified under the major heading "social sector" It has always been assumed that the housing situation in Nigeriawould improve as general economic conditions improved, especially in the major urban centres. Yet, based on this"wait and see" attitude there have been more failures than successes. In Nigeria most individuals aspire for the daywhen they will own their houses. The aim of private house developers is not necessarily to live in them asowner-occupiers, but to rent them out at exorbitant prices to recoup their investments as soon as possible. Thus,house-owners in the cities are not interested in providing the needed facilities, and do not care if there is access totheir houses or not.

The shelter history of Nigeria reflects four public-sector policy periods (FRN, 1985; Onibokun (ed.), 1985; I RN,1990), which are outlined in the sections below.



1. Colonial period

During the early colonial period, the housing activities and policies of the Government in Nigeria focused onthe provision of quarters for expatriate staff and for selected indigenous staff in some specialized occupations likerailways, police, education etc. This period saw the establishment of Government Reservation Areas (GRA) as well asa few African Quarters and has been aptly described as the era of "housing reservations." No efforts were made bygovernment to build houses either for sale or rent to the general public and little was done to order the growth ofsettlements outside the GRA. At this period, public housing development was restricted to Lagos and the regionalprovincial headquarters.

One housing scheme that was introduced to benefit Nigerians during this era was the African Staff HousingScheme (which became operational in 1956). It was, however, just a token effort. Under this Scheme, qualifiedindigenous senior civil servants could be granted housing loans of up to five times their annual salary. The conditionsor resources for funding the Scheme were not substantial and only a few officers benefited from it.

Pursuant to the Town Planning Ordinance (Cap.95), the Lagos Executive Development Board (LEDB) wascreated in 1928 and charged with the effective planning and development of Lagos. The creation was as a result of thebubonic plague which ravaged Lagos in the early 1920s. After 1954, and with the approval of the Lagos CentralPlanning Scheme, the LEDB for the first time attempted to solve the problems of public housing in Lagos. Inimplementing its schemes, the LEDB encountered a number of problems, one of which was that not much wasachieved in regard to satisfying the housing need and demand of the inhabitants of Lagos.

Among other strategies and measures taken by the Government during the colonial period was theestablishment of the Nigerian Building Society (NBS). It was set up in 1956 to provide mortgage loans and to (partially)satisfy Nigeria's housing needs. One of the functions of this Society was to encourage Nigerians to save, particularlyfor housing investment. The savings scheme witnessed poor response by the public. The demand for mortgage loanswas heavy while the resources of the Society were sufficient to meet only a very small proportion of the demands. Theloans favoured only upper and middle-class people; low-income earners did not benefit from NBS operations.



2. Post-independence period (1960-1979)

During this era, especially the period immediately after independence, emphasis was placed on the five-yearlyDevelopment Plans as an instrument for economic growth. In the first two plans, the housing sector was virtuallyneglected. Further deterioration was witnessed in the housing situation during the civil war period, especially in thewar-affected areas. In 1967, more housing corporations were established in the newly created states. However, theircontributions were rather insignificant. In other words, the scope of their operations were severely restricted due tolack of finance and technical personnel. Hence, these institutions served the upper-income earners only, as onlyrelatively expensive housing estates were developed and loans were rather restricted.

The Third National Development Plan period (1975-1980) introduced the most comprehensive and activeintervention by the Government in the housing sector. The plan clearly recognized the housing problems and aimed toincrease the supply of housing to a substantial level. The Federal Government decided to participate directly in theprovision of housing, rather than leaving it principally to the private sector. A total of N 2.6 billion (US $3 billion) wasearmarked for the implementation of the various projects during the Fourth National Development Plan period. Thisrepresented about 5.6 per cent of the planned total expenditure in all sectors.



3. Second civilian (Shagari) administration period (1980-1983)

The first two periods and especially this third housing period, witnessed a steady increase in the interest andinvolvement of the public sector in shelter delivery, and the awareness of the importance of the shelter sector withinthe overall economy. Although some of the shelter strategies and activities during these periods may be seen to be inconformity with the enabling concept, the direct production of shelter by the public sector remained their commonfeature. This strategy, which is contrary to the enabling approach, witnessed huge failures during the Shagariadministration, when the Federal Government of Nigeria allocated N 1.9 billion for housing construction, in all the 20states of Nigeria, including Abuja. By June 1983, N 600 million (37.5 per cent) had been spent to complete only 32,000units, yielding an overall achievement level of just 20 per cent (FRN, 1990: 3). See also table 1 .

This period coincides approximately with the Fourth National Development Plan period (see table 2 ). Itwitnessed the continued increasing deficit on urban housing as well as its continuous deterioration in the rural areas.The beneficiaries of this programme were identified as the low-income earners whose annual income did not exceed N8000. A total of 40,000 units (of which 90 per cent were to be one-bedroomed, 10 per cent three-bedroomed) were to beconstructed annually throughout the country. In this way, 2000 units were to the built in each state including theFederal Capital Territory (FCT), Abuja. In the states, these housing units were located in their capitals and localgovernment headquarters. This effort was implemented by the then Federal Ministry of Housing and Environment.Mid-way through the implementation, a second phase of the programme was commenced, comprising 20,000 units oftwo-bedroomed core houses for the low-income groups. It is pertinent to mention that this phase of the programmefailed to take off in most states, and that the shelter policy, came to an abrupt end in December 1983, making way for afresh look at the shelter sector which has culminated in the new National Housing Policy.



4. Second military interregnum (1984-1993)

It is perhaps somewhat premature to undertake an evaluation of the policy strategy and performance of thisperiod because the period so far has been very much a transitional one in which the Federal Government has beenpreoccupied with the preparation of a new and more relevant National Housing Policy. This policy was finalized andlaunched by the President in February 1991. The policy has since become operational as the detailed modalities for itsimplementation have been put in place.

Though there is not much to say by way of the experience derived from its implementation within the shortspan of its existence, there is no doubt that under the present administration, remarkable achievements have beenmade in the area of housing and the improvement of the quality of our environment. (1)


Chapter I. Changing shelter policies in NigeriaB. The current shelter policy and its links with the overall economy

As stated above, the current shelter policy of Nigeria can only be described as emergent. Following thelaunching of the new National Housing Policy, the unfolding scenario in the housing sector economy is a cleartestimony that with dedication and seriousness of purpose, the citizens can collectively and gradually ameliorate thehousing crisis plaguing Nigeria. A meaningful discussion of the current policy must, therefore, at the same time dealwith the immediate past policy and its emergent successor, the National Housing Policy.

The Third National Development Plan was like a watershed, in the history of policy development in relation toshelter in Nigeria. In that plan it was possible to go beyond the basic human need concept of Shelter to one in which itcontributes productively; "shelter" represents one of the most basic human needs and has no doubt a profoundimpact on the ... productivity of the individual" (FRN, 1975: 1:307). Shelter was transferred from the social (consumer)sector of the economy to the regional development sector which was acknowledged to have a greater impact upondevelopment than mere consumption. The priority accorded to the sector and the level of projected public-sectorinvolvement rose dramatically.

Post-independence development plans have given little emphasis to Housing having been lumped ... with townand country planning which itself has hitherto been regarded as a low priority sector. The government now accepts itas part of its ... responsibility to participate actively in the provision of housing ... and will therefore intervene on thelarge scale in this sector ..." (FRN, 1975: 1 :308).

By far the largest and most conspicuous component of the programme was the National Low Cost HousingProgramme which required the direct construction of 200,000 low-cost housing units by government, making use of theservices of contractors. The lapses and failures noticed during this period were significant in forcing the search for anew National Housing Policy.

Although the plan recognized a number of other measures and instruments for the achievement of its statedshelter objectives - increased investment in the domestic production of building materials, importation of buildingmaterials to supplement local input etc. - its basic strategy was clearly the direct production of the set productiontargets of the plan period. The Federal Government undertook a major reform of the land-tenure system, expanded thefinancial base of its mortgage agency, and of the institutional base of its mortgage agency, as well as that of theinstitutional framework for the public sector in the production of shelter. The issue of rent control as a mechanism forincreasing access to shelter - though of some concern to government during this plan period - did not make anysignificant impact.

The improved perception of the shelter sector by the Government during the Third Plan periodnotwithstanding, little overall emphasis was placed on the vital role of the private sector in shelter production or themass mobilization of human and material resources and participation in support of shelter output.

The Fourth National Development Plan period (1980-1985) also accepted the recognition accorded to the sheltersector during the Third Plan period. The basic policy of the Government - of massive intervention in the sector toprovide large quantities of housing units with special emphasis on the low-income group - remained unaltered and wasreinforced. The fourth plan came to an abrupt end in 1983 when the civilian administration was overthrown in a militarycoup d'etat. In 1985, the Federal Government, conscious of the inability of previous policies and programmes to dealsatisfactorily with the mounting shelter problems of the country, set up a special committee, made up ofrepresentatives of relevant public-sector bodies and other non-governmental interests in the shelter sector, to analysethe past national policies and programmes and make proposals for a new national housing policy. The report of thepanel formed the basis of the present National Housing Policy, which has a definite and far-reaching enablingorientation.


Chapter I. Changing shelter policies in NigeriaC. Objectives of the National Housing Policy

The ultimate goal of the National Housing Policy is to ensure that all Nigerians own or have access to decenthousing accommodation at affordable cost by the year 2000.

In order to achieve this laudable goal, the Government decided to pursue the following policy objectives:

Encourage and promote active participation in housing delivery by all tiers of government;

Strengthen institutions within the system to render their operations more responsive to demand;

Emphasise housing investments which satisfy basic needs;

Encourage greater participation by the private sector in housing delivery.

The above objectives, among others, constitute the cardinal points for the implementation of the housingpolicy.

To accomplish the objectives, the following strategies have been put in place (FRN, 1991 10-12):

Establishment of an appropriate institutional framework to facilitate effective planning in housing supply;

Restructuring all existing public institutions involved in housing delivery at the federal and stategovernment levels with a view to making them more effective and responsive to the needs of all Nigerians;

Reviving existing laws and regulations, such as the Land Use Decree, the planning laws etc., in order tofacilitate housing provision;

Improving the finances and strengthening the executive capacity of local governments to enable them tocontribute more effectively in housing delivery;

Mobilizing private-sector participation in the provision of housing;

Producing adequate cadastral and topographical maps to facilitate land use planning and landadministration;

Producing and updating regional development plans and urban and rural master plans;

Upgrading and rehabilitating low-quality or sub-standard houses in urban areas as a step towards improvingthe quality of the environment;

Providing sites and services to facilitate home-ownership and orderly urban and rural development;

Improving the quality and quantity of rural housing and infrastructure in order to enhance the quality ofrural environment;

Restructuring the Federal Mortgage Bank of Nigeria to serve as an apex housing-finance institution;

Mobilizing savings through the establishment of a National Housing Fund (NHF);

Ensuring a continual flow of adequate funds from various sources into the apex institution for on-lending toother mortgage institutions;

Encouraging research into and promoting the use of locally-produced building materials as a means ofreducing housing costs;

Adoption of functional design standards to reduce costs and enhance socio-cultural acceptability, safetyand security and privacy;

Increasing the number and improving the quality of labour and other personnel needed in the housingsector;

Utilizing the location of housing estates and other residential neighbourhoods as an instrument for abalanced population distribution in order to minimize associated problems of transport and services;

Ensuring the preparation of a National Housing Plan to spell out the details and strategies for achieving theobjectives of the Housing Policy.



1. Organization for shelter delivery

So as to achieve effective implementation, shelter strategies will need to be introduced at the national level bythe Federal Government and further developed by the different governmental agencies, local authorities, the privatesector, non-governmental organizations and community-based organizations (CBOs).

A recent significant development in Nigeria within the institutional framework is the clearer definition of thefunctions of, and assignment of roles to, the main public-sector actors in the shelter sector, as well as theirinterrelationships. Thus, the institutional framework forms the basis of the entire housing-delivery system and as suchgreatly influences the success of housing supply. A major factor in which the fundamental relationship between thevarious actors in housing delivery can be achieved is the flexibility to adjust to dynamic socio-economic and politicalchanges, without unnecessary disruption to the system. Hence it is very desirable to centralize policy and programmecontrol while decentralizing the activities.

The functions and roles of the various actors are specified in the new national housing policy and some ofthem are briefly summarized below.



2. Federal government agencies

The Federal Government is to initiate, define and coordinate the policy options and instruments for achievingthe objectives in the housing sector while the actual implantation is to be undertaken by appropriate agencies atfederal-, state-and local government levels. Basically, the Federal Government is to formulate policy, and coordinate,construct and monitor housing programmes and projects. The specific roles and functions of some relevant federalagencies are outlined below:

The Federal Ministry of Works and Housing (FMW&H) is to formulate national policy on housing;articulate, coordinate and monitor housing programmes; promulgate relevant laws and regulations for theshelter sector; and generally facilitate the attainment of national shelter objectives.

The Federal Housing Authority (FHA) was set up in 1973 to perform three principal functions, i.e., prepareproposals for national housing programmes for submission from time to time to the Federal Government;develop and manage real estates on a commercial and profitable basis throughout the Federal Republic ofNigeria; and provide sites-and-services facilities for all income groups, with special emphasis on thelow-income group in the major cities.

The Federal Mortgage Bank of Nigeria (FMBN) was - until quite recently - the sole specialized mortgageinstitution in Nigeria, undertaking both wholesale and retail mortgage transactions. Under the currentNational Housing Policy, the FMBN is assigned to play the central banking role in the mortgage-bankingsystem. It will engage in wholesome transactions, and control the activities of the primary mortgageinstitutions.



3. State governments

Each state government in Nigeria is to formulate its own housing policy and execute housing programmes inline with the overall national policy. Specifically state governments are to, among other activities, perform thefollowing functions:

Establish appropriate agencies for shelter delivery;

Promote the formation of housing cooperatives;

Establish building societies and similar mortgage institutions;

Prepare regional and settlement master plans;

Ensure that local governments play more active roles in shelter matters;

Promote and facilitate the development of sites-and-services schemes;

Play an active role in the identification, production and use of building materials from local resources in orderto ensure availability of cheap building materials for housing construction.



4. Local governments

In the past, local governments were not active in shelter production and delivery. Yet, it is their function underthe new policy to:

Assist in the formation of housing cooperatives;

Determine the housing needs of the rural population;

Provide residential layouts for low-income housing within their areas of jurisdiction;

Provide and maintain infrastructural services to shelter;

Be responsible for environmental sanitation;

Upgrade and rehabilitate dilapidated houses in collaboration with the state governments.

Most of the changes and functions specified for the public-sector agencies in the new institutional frameworkfor shelter are promotional in nature. The private sector is saddled with the greater responsibility of providingresidential accommodation for the majority.



5. Private-sector participation

The formal and informal private sectors have provided over 90 per cent of the housing stock in Nigeria. In viewof the past and current contribution of the private sector - and in order to increase the national housing stocksubstantially - this sector needs to be mobilized, organized and motivated in line with the overall organizationalstructure of the shelter-delivery system. For this purpose, the private sector is defined to include all financialintermediaries (both banking and nonbanking); industrial and manufacturing organizations and large commercialhouses. It also includes purely private and individual investors.

The main participants and programmes in the private sector are the employees' housing schemes and theinsurance companies. The employees' housing schemes were established by the Special Provisions Decree No.54 of1979 (as amended). Under this scheme staff housing estates have been developed by United African Company ofNigeria, Union Bank of Nigeria, Elf Oil Company, Shell Oil Company, Mobil Oil etc. These schemes have beenoperating to an appreciable degree of success within the following stipulations:

Every designated employer (whether corporate or unincorporated) is to submit proposals for considerationfor the establishment of a housing scheme for its employees;

Three quarters of the units so provided are to be reserved for employees who are not executive or seniorstaff;

The provision of the housing scheme includes provision, on a rental basis, of separate buildings or block offlats

The scheme is mandatory for all employers who have not less than 500 persons in their employment in anypart of any state of the Federation or any part thereof.

Another arm of the private sector that has contributed to residential housing development consists of theinsurance companies. This has been a result of the Decree No.59 of 1979 which made it mandatory that all insurancecompanies invest not more than 25 per cent of their life funds and not more than 10 per cent of its non-life funds in realestate. The provisions have since been amended by Decree No.3 (National Housing Fund Decree 1992) which states,inter alia, that, every registered insurance company shall invest a minimum of 20 per cent of its non-life funds and 40per cent of its life funds in real property development of which not less than 50 per cent shall be paid into the fundthrough the FMBN. This has led to a lot of protests and the insurance community has requested further amendment ofthe provisions.


Chapter I. Changing shelter policies in NigeriaD. Legal and regulatory framework for shelter delivery

The existing basic legal and regulatory instruments on shelter in Nigeria include:

The Land Use Decree of 1978;

The Nigerian Town and Country Planning Ordinance No.4 of 1946 (Cap 155 of the Laws of Nigeria);

Building regulations and bye-laws of the various previous Governments.

It is widely recognized that the above legal instruments are either obsolete and unrelated to the realities of thepresent-day shelter situation in Nigeria, or deficient in some significant respect.

The Land Use Decree, which is a major land-reform instrument, remains a controversial law. Nevertheless, thelaw is so basic to the livelihood of the majority of people that it has received unusual government protection since1979. One point, on which both defenders and opponents of the law agree, is that the machinery of land managementand administration built into the law is very cumbersome and at times counterproductive.

For this reason it does not release land speedily and adequately enough to satisfy the basic land needs of theeconomy, especially for housing construction. Furthermore, its cumbersome procedures are intimidating for the poorand illiterate, to whom formal access to land is very difficult. To this extent, the law has a discriminatory effect,favouring the middle and upper segments of society against the poor and underprivileged (FMW&H, 1985; Onibokun(ed.), 1985; Odimuko, 1990). Currently, efforts by Government in reviewing the decree to make it more functional as amachinery for land delivery are nearing completion through the Law Reform Commission.

One example of a law that is thoroughly obsolete is the Nigerian Town and Country Planning Ordinance 1946,(Cap. 155 of the Laws of Nigeria). As the basic regulatory planning mechanism, it is vital in the shelter sector becauseit controls the major part of the process of translating raw land into shelter and a living environment. The maincriticisms of this law are that it does not offer sufficient participation by the relevant actors, it does not reflect modernland-use planning concepts, uses and practice, and it has not been synchronized with the provisions of the Land UseDecree of 1978. This necessitated the setting-up of a National Committee for its review. The final draft of a newNigerian Town and Country Planning Law has since been submitted to the Government and it is hoped that it will soonbe promulgated to assist in the implementation of the new National Housing Policy.

As regards the enforcement of building regulations and bye-laws, the practice over the years has been for localgovernments, planning and development authorities to adopt these instruments for local use. A common feature ofthese byelaws is the very strong similarity between them and the eighteenth century building codes and standardsintroduced by the early colonial administrations. These building standards do not reflect contemporary socioeconomicrealities, while the machinery of building approvals is unnecessarily sluggish and fraught with malpractice. TheFMW&H has caused these laws to be reviewed and updated and a draft was placed before the Government inNovember 1991 for approval and adoption.


Chapter I. Changing shelter policies in NigeriaE. Mobilization and allocation of financial resources

It has already been globally recognized that

"for the shelter sector to operate in an optimum manner, there will be a need to channel an appropriate level ofresources into this sector, in line with an enlightened understanding of its role in the development of the nationaleconomy. Financial resources will have to be mobilized in three important areas: public infrastructure investments,operation and maintenance; housing financing; and explicitly targeted subsidies to enable needy families to meet basicshelter needs" (UNCHS, 1990b: 26).

The question of how this recognition is applicable in Nigeria is examined below. The three areas mentionedabove are discussed separately.



1. Financing for infrastructure

Currently, the common practice in Nigeria is for the public sector to be directly involved in the provision andoperation of infrastructural services. Normally, the Government makes annual budgetary allocations for infrastructure.It is then left to its officials (through direct labour) or for contractors to build or install the road, water-supply anddrainage systems, sewerage networks, water-disposal electric power and communication facilities in new residentiallayouts. But because of inadequate funding, coupled with budget fluctuations, the high cost of these services and theinfluence of spiralling prices, it sometimes takes up to 10 years to provide these services to a layout after itsdevelopment. Consequently, in many cases, development precedes the installation of infrastructural services. Thismakes it even more difficult and costly to provide them later. The impact of this situation in terms of shelter provisionand availability is that houses built in these types of layouts are shunned by prospective renters unless as a lastresort.

Experience shows that the responsibility for the provision of infrastructure and services is often beyond thefinancial capability of the public sector, especially at the local-governrnent level. Thus, only the federal and stategovernments have generally found it possible to undertake services for infrastructural development. However, tworecent developments associated with the National Housing Policy has changed this.

The first of these developments is the entry of private-sector developers. Private developers in Lagos State likeHFP have acquired tracts of lands, laid them out as essentially residential estates and have commenced actualdevelopment (see table 3 ). Thus, the funding of infrastructural development will now depend less on annualgovernment budgetary allocations and more on the money and capital markets. Furthermore, to reduce interestpayments, the private-sector developer is likely to execute jobs faster than the public sector.

A second positive development on the infrastructure development scene is the establishment of theInfrastructure Development Fund (IDF), a source of long-term soft loans for state and local governments and theiragencies to support infrastructure provision. The origin of this programme lies in the recognition by the FederalGovernment of the need for an appropriate financing mechanism for urban infrastructure and services and forincreased resource mobilization, investment prioritization and programming. While it is expected that the structuraladjustment programme would in time alleviate the financial crisis, the states urgently require a viable and sustainablefinancial mechanism for urban infrastructure and services.

Problems of city-wide infrastructure and urban improvement financing began to be addressed undersubsequent projects in the erstwhile Nigerian States Urban Development Programme in the states of Benue, Ondo andGongola (these are now sub-projects of the IDF). During technical and fiscal preparations and surveys of theseprojects, the need for a sustainable mechanism for funding investments became increasingly apparent.

In 1983, the FMW&H requested the World Bank for assistance in finding an institutional solution to theproblem. The IDF concept was proposed and accepted by the Government in June 1985. Subsequently, consultantswere engaged to study the issue of the institutional location of the Fund. Their recommendation to license some ofNigeria's merchant banks to operate the fund was adopted as the institutional framework for the Fund. The FederalGovernment's acceptance to utilize the merchant banks in this venture is a major policy breakthrough and will facilitateprivate-sector participation in the financing of urban infrastructure.

The primary objective of the IDF is to initiate the establishment of an urban infrastructure wholesalingmechanism. This mechanism would assist states to manage, maintain and consolidate existing infrastructure andservices and to improve financial management and resource mobilization. An equally important and complementaryobjective of the project is to assist individual states to improve infrastructure investment planning and prioritization.

The institutional framework of the project relies on the demonstrated managerial strengths and track records ofthe merchant banks. A few banks were selected to serve as financial intermediaries for the project. These were:Continental Merchant Bank Limited, Nigerian Merchant Bank Limited and NAL Merchant Bank Limited. The bankswere selected on the basis of size of assets, quality of staff, interest in lending to state governments, willingness tomove to longer-term lending for infrastructure projects and readiness to make the changes in their operations andprocedures necessary to help states improve their project execution, resource mobilization and financial managementcapabilities. The minimum size asset base regarded as necessary to serve as an IDF financial intermediary is in therange of N 300-N 400 million ($1.5-2.0 million). Additional merchant banks or other financial institutions may in future

be selected as the IDF expands. Recently, Diamond Bank Limited, a purely commercial bank has been added to thisgroup.

The changes introduced by Lagos State (see section I.E.1 and table 3 ) are expected to relieve the public sector,both financially and logistically. The public servant, for instance, who previously would be engaged in taking his/herstaff to the site to install water pipes or electric poles would now be freed by the private developer to concentrate onspecifying and controlling the standards to be met by the developers. In this regard, one sees the changingcommunities and NGOs undertaking direct responsibilities, in the provision and/or operation of infrastructure andservices.

Lagos State was not alone in moving towards an enabling strategy, even before the formal launching of theNational Housing Policy. In the community of Ota (Ogun State) a sites-and-services scheme, Benjaville Suburbia, isbeing undertaken by a private developer. It involves roads (15 km, N 9 million), water supply (N 14 million), electricitysupply (N 6 million), telephone (300 lines, N 5.5 million) and recreation facilities (N 3.9 million).

At a different and larger scale of operation in the provision of infrastructure and services, the big publiccorporations - Nigerian Electricity and Power Authority (NEPA), the state water boards and authorities, etc. - are verymuch in firm control of the situation. There are serious moves to commercialize these operations across the board, inline with the structural adjustment programme. Indeed, both NEPA and NITEL have gone commercial to improve theireffectiveness.

From the above, one realizes that adequate investments in infrastructure networks are crucial to meeting shelterneeds. Equally, payments for infrastructure need to be collected from users and from those who benefit from increasedland values as a result of infrastructure improvements.



2. Financing for housing

Housing finance is the provision of finance or capital for housing. There are three ways of looking at this:housing finance can be taken to mean the capital required for the construction of housing or housing projects, theresources required to acquire or access housing by households, or the credit supplied by housing finance institutions(UNCHS, 1991: 1).

Housing finance has been identified as a key component of a shelter strategy. It is therefore, mandatory forgovernments to ensure that an appropriate environment is created for the mobilization of funds. The development orreform of institutions engaged in financing housing should be part of an overall effort to strengthen and develop thefinancial system of a country. The objectives of such an effort should be geared towards the promotion andmobilization of savings, reduction in costs and improvement of the efficiency of financial intermediation, therebypromoting free movement of capital throughout the national economy.

In the past, public-sector efforts to stimulate savings for shelter were insignificant in Nigeria. They consisted ofthe savings and loans units of FMBN and the state housing corporations, none of which could be described assuccessful. However, some significant changes may have been recorded under the new National Housing Policywhich seeks to encourage and stabilize contractual and voluntary saving schemes whereby individuals obtain futurehousing loans at low cost, and save at low deposit rates.

The policy also incorporates a mandatory home savings scheme within the framework of NHF, with thefollowing terms:

Participation in the scheme shall be by workers earning N 3000 or more in both the public and private sectorsof the economy;

Such participants shall be required to contribute 2.5 per cent of their monthly salaries to NHF;

An interest rate of 4 per cent shall accrue to such savings/contributions made as stipulated above;

The savings/contributions can be withdrawn as retirement benefit plus accrued interest at commercial rate,by contributors who for any reason could not utilize the housing loan facilities available under the scheme.

A mechanism similar to the clearance certificate is also being utilized to gain the participation of theself-employed workers in the scheme.



3. Targeted subsidies

In Nigeria, the Government has all along engaged in the development of layouts for residential purposes. Thisusually involves the provision of subdivided land and the necessary infrastructural facilities at a very high cost. It isnormal practice that each plot allottee is charged a token fee as development charges while the Government bears thebulk of the costs. This could be regarded as indirect subsidization. For example, in the implementation of thesites-and-services programme, there is evidence of cross-subsidization whereby the larger plot sizes are charged morepremiums and development charges. Recently, the FMW&H built 100 one-bedroom prototype housing units at theIsheri-Olofin Housing Estate to alleviate the housing problems of junior civil servants. The production cost of each flatwas N 35,000 ($1750). Each unit was sold for N 25,000 ($1250). This represents a subsidy of N 10,000 ($500) or about 12per cent which excludes the price of land. The prototype housing scheme is an experimental direct construction effortaimed at providing affordable housing especially for low-income groups. It is usually allocated through the ballotingmethod.


Chapter I. Changing shelter policies in NigeriaF. Shelter production and improvement

1. Land management

The availability of land constitutes an important factor in shelter production or improvement. In Nigeria, theLand Use Decree has had both positive and negative impacts on shelter production. In some ways it has helped tocurb land speculation. In the recent past, Government has allocated vast tracts of land to private development underspecial arrangements. Since land has become a limiting factor, it is offered as a government input to shelter production.Land, thus, becomes a kind of indirect subsidy.

The goal and objective of the Land Use and Settlement Development Policy in Nigeria has been to "ensureeasy access to, and efficient utilization of land for public and private use and promote balanced regional developmentand growth". However, the noble objectives of the Land Use Decree are yet to be realized. The constraints include:

Lack of follow-up action in promulgating supplementary legislation for effective implementation of theDecree;

Failure of the Land Use Decree to spell out the rights and powers of the Federal Government as trustee ofland which seriously hampers the Federal Government's efforts to acquire suitable land in the states fordevelopment purposes;

Cumbersome procedures for obtaining certificates of occupancy and Governors' letters of consent formortgage purposes;

Failure of the Decree to set up realistic yardsticks for determining compensation payable by government forimprovements on acquired land;

Delay and non-payment of compensation for improvement and economic crops and trees on acquired land.

To achieve the goals and objectives mentioned above, the Government inaugurated a committee to look intothe constraints. The review has gone through many stages and was, in early 1993, at the final stage where it is beinggiven final touches by the Law Reform Commission for promulgation.



2. Infrastructure

The lack of infrastructural facilities is a serious constraint to shelter production. To attain the quantities ofserviced land required, infrastructure needs to be provided at standards affordable for the target populations andproviding agencies. Unfortunately, shelter-related infrastructure has not been given the priority it deserves in Nigeriauntil quite recently.

The financing mechanism of infrastructure provision has been exhaustively dealt with in an earlier section. Inthis section it is the physical relation of infrastructure to shelter production and improvement that is discussed. Astable 4 clearly shows, the quality of the existing shelter stock in Nigeria is low, partly due to the low level of availableinfrastructural services. By the early 1980s, it became clear that although there were national programmes for theprovision of shelter, there was no parallel infrastructure financing mechanism in the housing sector. Consequently, theidea of IDF was articulated and approved by the Federal Government, as a mechanism to assist the state and localgovernments in Nigeria to obtain long-term financial credit for identifying, appraising and cofinancing infrastructureinvestments. The objectives and types of infrastructure to be funded have been discussed earlier.

The Government currently limits the aggregate size of IDF sub-project loans in any one state to a maximum of N10 million ($500,000), to spread the facilities to as many states as possible. Sub-projects are currently being executed inthree states (Benue, Gongola and Ondo) while prioritization studies and sub-project preparations are taking place in afew other states (Akwa Ibom, Kano, Katsina and Niger).

The IDF programme is currently restricted to urban investments. Its overall size (a maximum of N 40 million perstate or N 840 million nationwide), needs to be increased substantially. Nevertheless, the IDF programme is a welcomeparticipatory strategy for the provision of infrastructure, which had hitherto depended almost entirely on irregulargovernment budgetary allocations. Furthermore, its advantages are quite obvious. Table 5 illustrates a programme inwhich the public sector is playing a (generally) facilitating role, leaving the bulk of financing and, to some extent,management to private and external sources. Success with the initial projects may provide the encouragement neededto expand the programme in terms of financial scope and its national coverage.



3. Building materials and technology

Building materials and components constitute 50-60 per cent of the total cost of construction inputs in Nigeria.Consequently, this sub-sector cannot be left to develop haphazardly. To stem the current indiscriminate import ofbuilding materials, local capabilities and resources must be developed.

The rapid increase in the cost of basic building materials began after the civil war. Other major increasescoincided with the Udoji award and the mismanagement of the economy since the beginning of the last civilianadministration. During these periods, sharp rises were recorded for all categories of building material. The major causesof high construction are:

High demand for building materials arising from post-civil-war reconstruction, creation of new states and theoil boom;

Adoption of high space standards, costly specifications and over-design;

Massive imports of building materials;

Over-priced contract costs;

Inefficient distribution system aggravated by intermediaries and high transport costs.

Nigeria should gradually and systematically develop appropriate capabilities to reduce construction costs andachieve self-sufficiency in the production of basic building-materials and components from local resources ataffordable cost. The public sector has had a long-standing interest in building-materials production. Under theimport-substitution policy of the first National Development Plan (1962-1968), the building-materials sub-sector wasearmarked for action. Many government-sponsored building-materials factories were established at that time. Cementwas the most popular of the materials in this regard, although factories for paints and roofing materials wereestablished. The current policy of the public sector is to move away from direct production of building materialstowards that of facilitation. The Government intends to expand the scale of building-materials production. To achievethis goal, the Government has decided to pursue the following strategies:

Develop simple, imaginative and functional building designs, realistic specifications and space standards tofacilitate cost reduction, affordability and acceptability;

Develop appropriate technologies to facilitate production and use of local building materials;

Encourage and support originality and creativity in housing projects. The products of such initiatives are tobe made available to users.

To expand the production of building materials, plans are underway to determine, on a continuous basis, theconsumption pattern of basic building materials. Specifically it is intended to promote the establishment of cottage andsmall-scale industries to produce building materials and components from local sources, such as clay, brick, concreteproducts, timber etc. In addition to these measures the Government has decided to encourage, through fiscalmeasures, the expansion of those existing industries that produce building materials and components from localsources. Moreover, it intends to identify new local raw materials available for the manufacture of building materials.These measures will be successful if it is ensured that a substantial percentage of the construction inputs are localbuilding materials and components.

To achieve these objectives of the new housing policy, the Government has decided to pursue the followingstrategies:

Reorganize and adequately fund the Nigerian Building and Road Research Institute (NBRRI) with regionalcentres in order to promote effective research and development in the housing industry;

Reconstitute NBRRI into the National Building Research Institute (NBRI). The first section of this outfit shallbe responsible for the commercialization of the products, components and technique evolved by theInstitute;

Ensure that the NBRI collaborates with other research institutions and centres to carry out research intobuilding materials and construction methods; users attitudes, requirements, preferences and aspirations; andbuilding techniques and construction management, including productivity and cost studies.

The capacity of the building industry to accept and adapt new technologies needs to be enhanced throughtechnical assistance and incentives for innovation (UNCHS, 1990b). In Nigeria, the public sector's support for thedevelopment of appropriate construction techniques has been very low-keyed. Its impact upon the shelter-deliverysystem has been negligible. One of its best known efforts is the campaign to replace sandcrete/cement blocks withburnt bricks as the basic building material. This idea was based on the desire to utilize effectively the widely occurringclay soils required for the burnt-brick production. For a time, the use of such bricks was made a condition in allpublic-sector projects. Yet the campaign failed to "catch on" because of the limited supply of the product, high unitcosts and scarcity of labour experienced in the use of bricks (Odimuko, 1990).

It is the intention of the public sector under the New Housing Policy to "develop appropriate technology tofacilitate production and use of local building materials; encourage and support originality and creativity in housingprojects' and make available to the public the products of such initiatives (FRN, 1990: 19).

As has been rightly observed,

"the whole task of expanding the capacity of the building materials and construction sector should beapproached (as is happening in Nigeria now) with the aim of maximizing economic benefits. The obvious target of thesector will continue to be the provision of shelter, infrastructure and similar output' (UNCHS, 1990b).


Chapter I. Changing shelter policies in NigeriaG. Scope and scale of the shelter problem

1. Housing stock

No official census of the housing stock has ever been made in Nigeria. Yet this section attempts to arrive at areasonable estimate, based on the total population figures, the average household size and a plausible assumption ofthe level of shortage in the housing markets, i.e., 25 per cent in urban areas.

The population of Nigeria in 1991 was about 89 million (see table 6 ). A demographic survey conducted by theFederal Office of Statistics in 1990 showed that the overall average household size was 5.4 persons. The figures forurban and rural areas were 4.8 and 5.6 persons respectively (see table 7 ). The same survey estimated that 24.4 per centof all houses in Nigeria

were located in urban areas. Based on the above figures, the total number of households in Nigeria in 1991 isestimated at 16.4 million, of which 4.5 million are urban and 11.9 million rural.

If one further assumes that the housing shortage in urban areas is 25 per cent, the total urban housing stockwould be about 3.4 million units.

Table 8 presents the official figures from 1984-1985 on the volume of different types of dwellings in Nigeria. Thereliability of these data, however, is very low. First the terminology on house types is unconventional. For example,"single" is used to refer to maisonettes and duplexes, and sometimes to semi-detached houses as well. Secondly, someof the figures in the table are rather unrealistic. The figures do, however, provide a rough indication of the actualdistribution of dwelling units by types. The dominance of the room type of dwelling in both rural and urban areas, forinstance, is made quite clear. Informative as this table may be, the contents do not portray any realism to what is onthe ground. Based on concrete experience in both urban and rural areas, as well as discussions with various observers,Achunine (1993) has estimated the composition of the housing stock in Nigeria as is outlined in table 9 . The tableindicates that the vast majority of housing units can be classified as either rooms (74 per cent) or detached bungalows(17 per cent). ID the urban areas, however, flats are estimated to account for about 15 per cent of the total housingstock.

Available data indicate that in rural areas, three out of every four households are owner-occupiers. Theremainder are either paying rent or living in their units free of charge (see table 10 ). The dominance of owner-occupierhouseholds is understandable in the rural setting where the standard of housing is modest and almost everyhousehold is able to erect some form of shelter for itself without the usual institutional, regulatory and otherconstraints associated with shelter development in urban areas. ID urban areas, however' only one out of every threehouseholds is an owner-occupier. Even in the best of times it is difficult for the average household to own property inthe urban area. Since the early 1980s, Nigerians in urban areas have experienced very harsh economic conditions. Theprospects for the average household of becoming an owner-occupier have thus diminished even further.

The vast bulk of housing production in Nigeria's urban areas has been produced by the informal sector.Achunine (1993) estimates that about 70-80 per cent of all housing units produced in Nigeria's urban centres in thepast have been built by the informal sector.



2. Housing needs

Table 11 provides an estimate of shelter needs in Nigeria for the decade 1991 to 2001. It shows that - given theestimated current housing stock, assuming an annual increase in the number of households of 5 per cent in urbanareas and 2.5 per cent in rural areas, and a target of one housing unit per household in 2001 - the annual housing needbetween 1991 and 2001 is 392,000 units in urban areas, and 345,000 units in rural areas. The current housing deficit wasabove estimated to 25 per cent in urban areas, i.e., 1,126,000 units.

The quality of the housing stock in Nigeria is poor, particularly in the rural areas where the majority of thepeople live. Table 4 shows that there is a widespread lack of facilities in urban areas as well. Possibly the most strikingissue in the table is that 20.6 per cent of all housing units in urban areas (694,000 units), and 32.1 per cent of all units inrural areas (3,803,000 units), are more than 24 years old. If all these old units are taken as a (modest) estimate of thenumber of units in need of replacement or upgrading, it implies that the total current housing deficit is about 5,623,000units, of which two thirds is in rural areas. If these are to be replaced or upgraded during the 19912001 period, it impliesan additional annual need of 70,000 units in urban areas and 380,000 units in rural areas. Legitimate as the need forupgrading of existing shelter stock may be, this need fades into relative insignificance compared with the immediateneed for new units to satisfy the requirements of an population growth of 1.4 million people per annum.



3. Housing demand

The demand for housing is a reflection of the ability of households to pay for them. Thus, an examination ofhousehold incomes and prices of housing units provides a basis for assessing housing demand. There are no currentdata on the distribution of household incomes in Nigeria. The most recent survey on the matter was carried out in 1984and the result is summarized in table 12 . About the same time that these data were being collected, the officialdefinition of the low-income groups, at least as far as housing policy was concerned, included all households earningan annual income of N 3000 or less. This group was estimated to account for over 70 per cent of the Nigerianpopulation (FRN, 1985).

The economic polices and conditions in Nigeria in the 1980s were devastating. Although, in numerical terms,household incomes have risen by a factor of about 5 since 1987, the purchasing power has declined by a factor ofabout 8. Thus, the average Nigerian household is worse-off today than in 1984. Based on this scenario, Achunine(1993) has estimated the income distribution in 1992 as is outlined in table 13 .

Housing prices vary considerably from one part of Nigeria to another, and from one city to the next. The 1992situation in Owerri, the capital city of Imo State, a medium-size city, is shown in table 14 . Table 15 indicates theaverage household incomes available for housing (assumed to be 25 per cent of monthly income) and the dwellingtype options open to each income group. The table clearly shows that the household incomes of the lowest-incomegroup are too low to allow them to exercise any effective demand in the open market for formal housing. Thesehouseholds cannot afford any form of formal housing without subsidies. This leaves a balance of 70 per cent ofhouseholds with sufficient income capacity to demand some form of housing in the market. Given an estimated 17million households in 1992 and an annual growth rate of 2.5 Her cent. the expected number of households in 1997would be 19.2 million. This means that over the next five years there would be a total demand in the formal housingmarket for 2.2 million units or 440,000 units per year most of which would be single rooms and one-bedroomed flats.

The poorest 20 per cent of the households do not earn enough to participate in the formal housing markets. Inthe urban areas they resort to various informal housing arrangements for themselves. These arrangements include thesetting-up of shanty dwellings of their own on land not belonging to them (squatting); renting shanty dwellings;colonization of uncompleted multiple-storey buildings; occupation of vacant spaces in public buildings at night; etc.See also table 16 .


II. Housing supply at the national levelA. Actors in the shelter-delivery process

The determination of roles assigned to the different actors in the shelter-delivery process normally begins atthe initial stages of policy development and continue through the implementation stages. A major factor on which thefundamental relationship between the various actors in the housing-delivery system can be achieved is the flexibilityto adjust to dynamic socio-economic and political changes without unnecessary disruption. In Nigeria it has becomedesirable to centralize policy and programme control, while decentralizing implementation activities. Given thesocio-economic and political significance of housing and housing facilities in Nigeria, both the public and privatesector must be actively involved and perform specific roles to harmonize effective housing delivery. Theresponsibilities and relative importance of each actor in the housing delivery process has been discussed above. Whatfollows below is thus a brief outline.


II. Housing supply at the national levelA. Actors in the shelter-delivery process1. Government and public-sector agencies

The FHA and FMBN have been assigned the responsibilities of providing houses for sale and providing loansto individuals. However, it has been noticed that these agencies sometimes duplicate the statutory functions ofFMW&H.

In the housing-production process, each level of government initiates, defines and coordinates the policyoptions and instruments for achieving the objectives in the housing sector. The Federal Government carries itsresponsibilities by pursuing a number of strategies. It concentrates on policy formulation, coordination, construction,monitoring, codes and regulations for housing development. It also promotes the establishment of building societiesand other primary lending agencies, thereby facilitating home-ownership for all income groups. Moreover, it isresponsible for providing adequate funding, particularly for the facilitation of low-income housing.

The state governments are expected to formulate housing policies and programmes in line with the overallnational housing policy. One of the primary functions of the state governments is the establishment of appropriateagencies to execute public housing programmes. In view of the serious problem of funding and lack of executivecapacity, local governments have not been able to perform effectively in housing delivery. However, being the closestlevel of government to the people, the local government authorities have a key role in housing. Specifically, theyshould provide residential layouts for low-income housing through their local planning authorities while also assistingthe formation of housing cooperatives.

At the federal level, FHA was set up to prepare and submit proposals for national housing programmes to theFederal Government. FHA has, however, been only minimally involved in the federal housing programme. Untilrecently, FHA was not able to discharge effectively the functions of providing affordable housing for all incomegroups. This was due to a number of reasons among which are:

Over-dependence on subventions from FMW&H;

Inability to recover outstanding mortgage repayments from the beneficiaries of its housing schemes;

Administrative and financial mismanagement.

In view of these shortcomings, FHA teas not made enough of an impact on housing production. Its role inhousing delivery has recently been redefined, to enable it to perform more effectively.

FMBN is now the only institution, at the national level encouraging the flow of funds from various sources tothe housing industry. To this end, it has been reorganized to function as an apex mortgage institution.



2. Private sector

A few large-scale contractors are engaged in nationwide residential provisions. These include G. Cappa, HFP,Bobygues, Taylor Woodrow and some indigenous contracting outfits. Recently, some large-scale estate developers(among others: HFP, Alma Beach Estate Developers, and Seagate Estate Developers) have joined these in theproduction of residential houses. They also develop serviced plots in Lagos, mostly for the high-income groups.

There are quite a number of small-scale contractors that have contributed tremendously to the housing deliveryprocess. Their efforts have been geared towards the production of housing for the middle- and low-income groups.There are, however, no data to substantiate their relative importance vis-a-vis other actors.

Other private-sector actors include commercial banks like the United Bank for Africa, the Union Bank of Nigeriaetc. They also include insurance companies like British American Insurance Company PLC and large-scale departmentstores and trading organizations like United African Company, SCOA etc. Some oil companies have also engaged inthe provision of residential houses, either for their staff or for commercial rental purposes. These actors normally caterfor the middle- and high-income groups.



3. NGOs, CBOs and cooperatives

These organizations are just emerging in Nigeria in terms of housing production. Recently, the Better LifeProgramme for Rural Women has become very popular, all over the country. In addition to engaging in economicventures the organizers have undertaken the provision of housing for destitute widows and orphans.

The potential of housing cooperatives in housing production is considerable. It is hoped that as theimplementation of the National Housing Policy unfolds, the mortgage institutions will recognize collective guaranteeschemes that will utilize cooperative societies, especially in the rural areas, as support collateral for individual membersor joint applications for housing loans.



4. Households

Individuals and households have in the past constructed more than 70 per cent of the housing stock. In view ofthe past and current contribution and in order to increase the country's housing stock substantially, this sub-sectorneeds to be better organized. Their main preoccupation is the provision of houses for themselves, i.e., mostlylow-income housing.


II. Housing supply at the national levelB. Housing finance

The issue of housing finance was discussed in an earlier section. It was pointed out that public-sector effort tostimulate savings for housing has been insignificant. A casual review of the existing housing-finance system inNigeria shows that it is severely underdeveloped, and thus ill-equipped to mobilize and channel savings to thehousing sector. FINN was created to serve as a wholesale and apex institution, yet the other component of themortgage market - in terms of primary mortgage institutions, such as building societies, housing association, creditunions, housing cooperatives etc. - concentrates largely on retail functions of lending to individuals (FRN, 1991).



1. Household savings for housing

Charles Abrams (1964) rightly recognized that

"in the more advanced countries, the mortgage system enables most families to buy houses with a reasonabledown payment and monthly payments for twenty to forty five years. Subsidies are generally available for lower-incomefamilies. But in the underdeveloped countries, where the average family has small savings, a house must usually bepaid for outright. Even if there is a surplus from earnings, years of saving are required before a family can accumulateenough money. Where buildings costs are low (a situation non-existent today) interest rates are prohibitive. Oftenhigh interest rates combine with high land and building materials costs to make home ownership impossible.

"In the advanced countries, a good portion of savings is channelled through savings institutions intomortgages in homes. But in under developed countries like Nigeria, savings are usually in the form of personal effectslike jewellery, cash, etc. This is so because the average person does not trust the banks and inflation as a constantthreat to savings. The critical absence of mortgage capital has had untold negative impact on housing production."

In summary, one can say that to some extent, housing-finance measures that work for developed countrieshave little impact in developing countries, especially for the low-income households. Another reason why formalinstitutions modeled on those of developed countries do not work for low-income earners in developing countries is atthey require formal guarantees in the form of collateral. Whereas in the former, most of the housing finance is requiredby households to purchase houses (from other households or from developers) in the latter, housing finance isrequired by households to build their own houses.

In developed countries, the land and the house form security for the lender, and can be mortgaged. Addedsecurity can be provided through life insurance policies. In developing countries, many households cannot providevalid title deeds to the land on which they intend to build. In the absence of life insurance policies or other securities,few if any, institutions will finance land purchases if the only security is the land that is being bought. Notsurprisingly, only a tiny proportion of households in developing countries purchase their houses with financeprovided through formal institutions. There is no doubt that the propensity to mobilize the savings of each householdmember for the building of a family house is widely acknowledged and practiced. It is, however, difficult to determinethe volume or percentage contributed by this measure. In processing the application forms for land allocation by theFederal Government under its sites-and-services scheme, about 90 per cent answered that the building would befinanced through personal savings and help from other family members. Table 17 clearly illustrates the situation inNigeria, where informal sources of finance account for 96 per cent of all housing finance.

Until the promulgation of the National Housing Policy for Nigeria in 1991, the only agency that had a structuredsavings mechanism for housing was the FMBN. The main categories of savings operated by the Bank with therelevant interest rates in 19851986 are outlined in table 18 . Other savings or deposits accepted by the FMBN includethose for mortgage administration on behalf of employers for their staff-housing loan schemes, as well as depositsfrom institutional corporate bodies. The Bank also operates a contract savings scheme tied to specific housingdevelopment projects under a World Bank-assisted programme on urban development. FMBN's total savings portfolioamounted to N 114.4 million in 1986. Total deposits were N 10.4 million.



2. Housing loan systems

The vast majority of the houses for sale are disposed of directly to individual members of the public, whonormally purchase by means of a mortgage from a building society. The building societies make loans available on thebasis of the householders's ability to make repayments out of income. An increasing number of people now want toown rather than rent their homes. The Government welcomes this trend, as it will eventually reduce the demands onthe public sector and help job mobility. In pursuance of this goal, a vast reorganization has taken place to elevate thestatus of FMBN to a veritable apex institution.

During its first eight years of operation (1977-1985), FMBN granted loans totalling N 442.6 million to only 8874applicants. On the whole, the Bank has concentrated its operations on social loans which accounted for about 90 percent of its total loan portfolio. Wholesale lending to housing corporations and estate developers constituted only 10per cent of its total loans. Moreover, FMBN's lending practice does not favour low-income households; 93 per cent ofloans granted to individuals has gone to middle- and high-income households. Thus, its objective of assistinglow-income groups has not been realized.

The Bank has also failed to mobilize adequate funds for the housing sector. Apart from the equity capital of N150 million, FMBN's major sources of funds are loans from the Federal Government and the Central Bank of Nigeria (CBN). Between 1979 and 1983 such loans totalled N 220.8 million from the Federal Government and N 25.7 million fromCBN. Funds from savings deposits rose from N 21.4 million in 1979 to N 113.2 million in 1984. The funds available fromall these sources have, however, proved grossly inadequate (see table 19 ).

New sources of funds must be found if FMBN is to make any meaningful impact on the housing sector.Nonetheless, FMBN continues to give priority to the financing of residential housing development. The two loancategories operated during 1986 were essentially in compliance with the credit policy guidelines of the CBN. Thesewere:

Residential loans for properties costing not less than N 100,000 at an interest rate of 9.5 per cent; and

Commercial loans for properties costing more than N 100,000 at an interest rate of 13 per cent.



3. Housing finance in rural areas

The above discussions on housing finance relate mostly to the urban setting. In all housing production,whether in the urban or rural areas, funds are required at all stages. Land has to be leased or bought; building materialsand labour have to be paid for and - in the developed economy - fees have to be paid to the different consultantsinvolved (if any). In the formal sector, the prospective house-owner may have to provide funds for a number of items;i.e., land acquisition, legal preparation of the site, physical preparation of the site, development of infrastructuralfacilities (roads , sewerage , services, landscaping etc.), construction of the shelter itself, professional fees, interest oncapital used during construction works, amortization charges and disposal expenses. In the rural areas, however, onlya few of the above items require funds in practical terms (FMH&E and NISER, 1981). Residential housing in the ruralareas may be financed through a variety of methods which are summarized below.

By kind. This is the old method whereby a person building a mud hut employs the services of friends, relationsand in-laws. The cost to the prospective owner is the food and palm wine provided for the periods the helpers spendon constructing the house. As for the land, this may only cost a few bottles of hot drinks or a goat since the buildermay be allocated a portion of the family land.

Private sources. It is a normal practice for a potential house-owner to have to build up a reserve from his/her ownincomes. For example, houses are built in some parts of southern Nigeria on an interest-free loan from a friend orrelative and this could be classified as finance from a private source. Membership of a thrift society may yield fundsmuch earlier than savings from incomes and these can assist in shortening construction period. Moneylenders. Due to the absence of formal financial houses in the rural areas, potential home-owners may resort tousing the services of moneylenders. The rate of interest from these, however, is very high. Institutional sources. Unfortunately, the rural areas - which contain more than 70 per cent of the national population- did not enjoy the services of these formal-sector outfits until very recently. Government housing loan boards assistonly civil servants who have satisfied the laid down requirements. The cooperative societies, which may be describedas an advanced stage of thrift societies, could have been a major source of housing finance in the rural areas. Yet theirpotentials are not being tapped as they are still largely undeveloped.

Research on lending preferences in the northern states has shown that friends are the preferred source of loansfor 40 per cent of rural dwellers (see table 20 ).

This may be because of the mutual trust and confidence rural dwellers give to one another.



4. Loans granted by staff housing boards

The federal and state governments have created staff housing boards to grant loans for residentialdevelopment to their staff. These boards have, however, not done much to increase the overall housing stock, eventhough their impact has been significant in other ways. Details of the performance of these boards are discussed insection II.C.1



5. Creating a new housing-finance system

The Government has established a two-tier financial structure to improve the effectiveness of thehousing-finance system. FMBN has been converted to an apex institution that will concentrate on wholesale mortgagelending to the primary mortgage institutions. In the past two years the Government has registered 145 primarymortgage institutions, most of which have commenced operations. There are also a decentralized network of buildingsocieties, housing cooperatives, housing associations, credit unions and savings banks forming the second tier, at thegrassroots level.

The two tiers identified here will work side-by-side with each other. Thus, the FMBN will guarantee loan stocksfloated by the primary mortgage institutions. Meanwhile, the Mortgage Institution Decree No. 53 of 1989, now in force,will facilitate the establishment and growth of primary mortgage institutions including the regulation of theiroperations. This arrangement will therefore divest FMBN of its retail mortgage loan portfolio.

In order to make the above processes successful, both voluntary and mandatory schemes have been put inplace by the Government to ensure a continuous flow of funds into the housing sector. The voluntary schemes areintended to encourage individuals to save at low interest rates and also borrow at the same low interest rates to buildor buy theirs houses at any given time, now or in the future. The programme generates a financing system where theguarantee of a future housing loan at low cost encourages personal savings at low deposit rates. The voluntary natureof these measurers manifests itself in the recent operations of the primary mortgage institutions. The common practiceof these institutions is to advertise and call for prospective home-buyers to start a savings scheme that will serve asdone payment for the house of say, between 10 to 20 per cent of its costs. These institutions have been accused ofcarrying out functions like commercial and merchant banks, that is, collecting deposits and paying interest todepositors. The critics have a point, it is doubtful if any of them have given an appreciable number of loans to makeany impact on the housing situation in Nigeria.

In view of the need for long-term financing of housing development, the Government has prescribed mandatorysavings schemes in the National Housing Fund (NHF) Decree of 1992. Indeed, such schemes have been implementedin many developed and developing countries. Mandatory savings schemes have great potential for mobilizing cheapfunds for low-income housing finance. The Nigerian Government therefore established its mandatory home savingsscheme through the promulgation of the NHF with the following terms or conditions:

Participation in this scheme shall be by workers with monthly earnings of N 3000 or more, in both the publicant private sectors of the economy;

Participants are required to contribute 2.5 per cent of their monthly salaries to NHF;

An interest rate of 4 per cent is payable on contributions thus made;

The savings/contributions can be withdrawn as a retirement benefit plus accrued interest at the commercialrate, by contributors who for any reason could not utilize the housing loan facilities available under thisscheme.

There are some other functions that have been allocated to major financial institutions which deal with themobilization of funds and granting of loans for housing production. Some of these have been spelt out in the NationalHousing Policy, namely:

The FMBN has been given the mandate to simplify the procedure for the refund of any contribution underthe mandatory scheme, in order to encourage full participation.

The NHF will be administered by FMBN, who will utilize the fund in financing the housing sector of theeconomy. An accurate record of each worker's contribution is to be maintained by FMBN.

To ensure the participation of self-employed workers in the scheme, a strategy similar to the requirements oftax clearance certificate or receipts for the payment of a special levy prior to any dealings with anyappropriate federal, state or local government department may be adopted.

In addition to the above, the Government has adopted the following measures:

The commercial and merchant banks have been directed by the Central Bank's credit guidelines to invest 10per cent of their loans and advances in FMBN, at an interest rate of I per cent. This transfer of funds intoFMBN will relieve the commercial banks of the burden of mortgage loans. The measure has becomenecessary because, within the operating framework, prudent commercial banking practice does not allow thebanks to approve substantial long-term loans for the housing sector.

Insurance companies have also been directed to invest a minimum of 20 per cent of their non-life funds and40 per cent of their life funds in real-estate development, of which not less than 50 per cent must bechannelled through FMBN, at an interest rate not exceeding 4 per cent. In order to achieve this target, thepresent restrictive provisions contained in the Insurance Decree No. 59 of 1976 and the Trustee InvestmentsAct No. 13 of 1962 have been amended so as to allow the insurance industry and pension funds to investgreater resources in housing development. The removal of such restrictive provisions will make huge fundsavailable to the mortgage banks from insurance companies.

Furthermore, in order to maintain a meaningful interest rate structure, the Government has directed that allfunds flowing from FMBN to building-mortgage institutions are to be administered at an interest rate whichwill enable the primary institutions to lend to individuals at a rate not exceeding 50 per cent of the chargeableor prevailing interest rate in the economy. The loan ceiling for individual borrowing is pegged at five timesthe taxable income of the beneficiary, subject to a maximum of N 80,000 repayable over a period of not morethan 25 years. All applications for such loans have to be supported with a three-year tax clearance certificate.



6. Incentives for investment in housing

The Nigerian situation does not present outstanding examples of incentives to the private sector as a means ofencouraging individuals or private organizations to invest in housing development. However, there are a number ofpractices which may be recognized as forms of incentive to the private sector. First, it is a longstanding practice inNigeria's urban areas for the Government, as part of its settlements planning and development activities, to acquireland in the urban fringes. The Government has then surveyed, laid out and parcelled the land so acquired into buildingplots. The land is provided with access roads, water and electricity and the serviced plots are allocated to individualsand organizations (at well below market prices) for housing development. This is a practice inherited from the colonialadministration and is still in vogue today especially with the popularization of the sites-and-services schemes by boththe federal and state governments. The overall impact of this entire process is less than impressive, as it has not beenable to generate a level of activity in the housing-production industry that is commensurate with Nigeria's rapidlygrowing urban settlements (Odimuko, 1987: 58). Yet it should be noted that the practice and methods adopted underthe current sites-and-services programme have gone a long way towards making land for housing development moreaccessible to all categories of income earners, by removing some of the stiff incumbrances associated with landacquisition for housing development purposes. Moreover, the practice has created a system of in-built subsidies inthe pricing of developable land. For example, in the Lagos area, a low density plot of 36 x 36 m will be sold at about N200,000 by private vendors in the sections of the city like Isolo, Ipaja, Iju etc. New and more responsive incentives arerequired to deal with the enormous settlement and housing development problems of Nigeria.

Secondly, through the Employees Housing Schemes (Special Provisions) Decree 54 of 1979, the FederalGovernment required employers of labour of a certain number (about 500 plus), the majority of which are private-sectororganizations, to provide suitable residential accommodation for their employees. On its own part, the Governmentwould provide the incentive of facilitating the acquisition of building land by the employers. The decree and its relatedgovernment incentives have produced very little results (Onibukun, 1985: 453-470). Their contribution to the goal ofproducing the required number of houses to meet even the minimal demand has been insignificant.

Yet, it is through this means that the Union Bank of Nigeria, CBN and other organizations acquired land anddeveloped quite a number of housing units for their middle-management staff. In a similar manner, some oil companies- like Elf and Chevron - have acquired land and developed houses for their workers in the Lekki Peninsula developmentarea.



7. Subsidies in the housing sector

There are no clear records of the application of subsidies in the housing sector in Nigeria. It is therefore difficultto identify cases or examples of the application of real subsidies in the housing sector. Yet the Government's staffquarters is clearly a case of heavy subsidies. For example, an average three-bed roomed duplex in Ikoyi GRA . Lagos,attracts a rent of N 50 per month or N 600 per annum. A similar housing unit in the same location being rented privatelyattracts as much as N 100,000 per annum. This represents a glaring distortion in the housing market. There may besome variations in other parts of the metropolitan area but the trend is almost identical. The practice of the Governmenthousing its staff in official quarters is inherited from the colonial times. Unfortunately, because the number of thesequarters has been rather small relative to the overall demand, only a few government officers have been allocatedquarters.



8. Affordability and cost recovery

Affordability and cost recovery are two of the most thorny issues associated with housing-delivery systems,especially in developing countries with limited resources. The issue of affordability could be considered at thegovernmental level or individual beneficiary level. Can the governments afford to produce the housing units at pricesthe individuals can pay? Need all the costs of production be recovered, and at what rate? In Nigeria, the cost ofproviding infrastructure is far greater than the cost of providing housing units. In the past, infrastructure provisionhas been treated as a social overhead and heavily subsidized, hence when the Government allocated serviced orunserviced plots to individuals in their layouts for eventual development, the premiums and ground rents paid are nextto nothing compared with the real economic cost of putting the services in place.

The concepts of affordability and cost recovery were introduced in Nigeria by the World Bank during theimplementation of its sites-and-services and settlement upgrading programmes. Part of the reasons for thisintroduction was to make sure that the programmes as designed (in scope and objectives) were within the reach of thetarget beneficiaries. It was also meant to instill financial discipline in the operators of the projects so as to ensurereplicability.

Yet it needs to be seen whether these objectives have been achieved or not. The idea of cost recovery was laterextended to the implementation of the Federal Low Cost Housing Programme cited above. A mortgage arrangementwas fashioned out and the cost-recovery exercise is being undertaken on behalf of FMW&H by FMBN. Usually, arequirement for obtaining ownership is that each household establishes savings accounts with FMBN and depositsums equal to the subsequent total monthly mortgage and service change for a stipulated time, starting at aconvenient time prior to the allocation of plots or units and granting of loans. This was the case for the Bauchi andImo NSUDP projects. For the Imo project, the remaining sum was to be recovered through monthly mortgagerepayments over 15 years, at 6 per cent interest.


II. Housing supply at the national levelC. Housing production

1. Traditional housing schemes

These are the schemes described as the deli very of "ready-to-move-in units. By and large, the production ofresidential housing in Nigeria has been dominated by the private sector, mainly on a rental basis. The public sector hasso far concentrated its efforts on owner-occupier housing, a policy which is somehow unrealistic in view of thesteadily diminishing income of the masses. The public-sector organizations and agencies that have been active overthe past one or two decades in shelter production are FMW&H, FHA, the various state governments and theirrespective housing corporations. The efforts of these public agencies in the shelter-production process have beendiscussed in chapter I of this report. The most prominent among the public programmes and activities are the NationalLow Cost Housing Programme, the National Medium and High Income Programme, the World Bank-assisted NigeriaState Urban Development Programme (Bauchi and Imo States) and, recently, the prototype housing schemes by theFederal Government and the FHA in Lagos and Abuja.

The performance of these public-sector agencies has been criticized, particularly on the following grounds:

High unit cost of output;

Slow rate of output;

Low quality of production;

Inadequate attention to the site location of the housing estates;

Heavy influence of bureaucratic procedures in programme administration.

By the middle of the 1980s, it had become clear that the role of the public sector in the shelter sector required aradical shift from that of direct production, by which little had been achieved, to the facilitation of the activities ofother actors. By June 1983, the sum of N 600 million had been spent to complete only 32,000 one-bedroomed andthree-bedroomed units out of a planned output of 40,000 units in phase I of the Federal programme. In the secondphase, which came to an abrupt end in December 1983, only about 20 per cent was achieved.

For several decades the Federal Government has engaged in the practice of building and allocating officialquarters to its staff both in Lagos and in other states. Achunine (1993) estimates that the Government has a total of9249 staff housing units, 5135 of these in the Lagos area. After the promulgation of the National Housing Policy in1991, the Federal Government has adopted a policy of disengagement from the provision of additional quarters for itsstaff. As in the past, the staff occupying these quarters paid only a token amount for rent whereby the differencebetween the rent and the real market or economic rent is regarded as part of their fringe benefits. It should be notedhere that more than 70 per cent of the more than 9200 staff quarters were produced before the adoption of the NationalHousing Policy in 1991.

Another method by which the governments - especially the Federal Government - participates in the productionof houses for its staff is through the efforts of the staff housing boards which offer housing loans at very low andsubsidized interest rates (usually 3 per cent per annum). It could be said that not much has been added to the nationalhousing effort through this method. Between 1980 and 1984 (except for 1982 when data were not available) there were atotal of only 2104 housing loans approved with a financial commitment of NSO million (see table 21 ). The amount ofloan available to each applicant had been N 40,000, but has recently been increased to N 80,000. This loan is repayableor amortized according to the number of years an applicant has served and his or her retirement expectations in termsof benefits and entitlement.

The FHA has developed two large residential estates in Lagos, namely Festival Town (otherwise known asFESTAC) and Ipaja New Town. During the last civilian administration (19791983) FHA built medium and high-incomehouses in several states. Feasibility studies were not conducted and locations of the estates were based on politicalconsiderations only. After the military take-over in December 1983, a review of the projects was undertaken and veryfew states survived the viability tests applied. In the recent past FHA has intensified its housing productionnationally, especially in Abuja.

Table 22 provides a summary of the total national housing production of FHA since its inception, totalling more

than 23,000 housing units. In Abuja alone FHA has built about 2300 units, most of them since the promulgation of theNational Housing Policy. The occupiers of FHA units range from high to low-income groups, while the majority of theunits themselves are flats of two or three bedrooms.

The state governments and their agencies have been very active in the production of residential houses.Unfortunately, data are not readily available on their efforts.



2. Sites-and-services schemes

Land has hitherto been a major stumbling block to prospective homeowners, particularly the low-income group.In order to enhance wider coverage of housing beneficiaries throughout Nigeria, Federal Government launched aNational Sites and Services Programme in 1986. This was seen then as a viable alternative to direct construction andproduction of houses by government in view of the attendant problems and failures in the wake of the implementationof the Federal Low Cost Housing Scheme. The concept of sites-and-services as a means of human settlementsdevelopment dates from colonial times whereby government had adopted the method of acquiring large tracts of land,laying them out, and providing the necessary infrastructure before allocating the serviced plots to individuals orcorporate bodies for development. Many parts of Nigeria's existing cities were developed in this manner. The methodwas used both by the federal, state and, at times, even by the local government authorities. This time around, underthe leadership of the Federal Government the sites-and-services scheme has become very popular and its scopeconsiderably expanded.

The key elements of the scheme include, among others, the provision of land in three categories of residentialplots, namely, low, medium and high densities. The average size of plots are as follows: low-density (1296 m2),medium-density (648 m2) and high (360 m2). Land is also provided for commercial, industrial and social facilities. Theuniqueness of the ongoing scheme is the deviation from the traditional practice, where the beneficiaries are mainlylow-income people and housing types or design are homogenous. Instead, plot beneficiaries are given the opportunityto decide on the design of houses that would suit their need.

Due to lack of data from other parts of Nigeria, it is only possible here to discuss the implementation of theFederal Government efforts. As mentioned earlier, the sites-and-services scheme is a national programme. It has takenoff in seven states (namely Lagos, Kano, Imo, Kwara, Ondo, Rivers and Enugu) and in FCT Abuja. The scheme had tostart in the above locations because of the availability of large expanses of undeveloped land previously acquired forPhase 11 of the rather unsuccessful low-cost housing schemes of the last civilian administration in those states. Table23 shows the volume of serviced plots obtained nationwide through this scheme and allocated to the public by theFederal Land Use and Allocation Committee as constituted under the Land Use Decree.

Since the inception of the scheme in 1986, until the end of the 1991 financial Year, the Federal Government hadallocated about N 85 million to the scheme N 37 million of which were allocated for 1993). It is yet to be seen whatimpact the above fiscal provisions will have on housing production in Nigeria. The greater part of these financialprovisions teas been spent on the provision of infrastructure, especially roads. The plot beneficiaries are left to fundtheir own developments. Less than I per cent of the actual plots provided have been developed during the past fiveyears. The implementation of the scheme will be extended to several other states. The sale of application forms hascommenced in Bauchi, Bendel, Borno, Niger, Ogun, Oyo and Cross River states.



3. Settlement-upgrading schemes

Over the last 40 years or so, the public sector in Nigeria has been involved in the effort of settlement upgradingof the inner sections of the larger cities. While some of the efforts were undertaken some four decades ago, theexperiences thus gained seem to have become dim, though their impacts are remembered with mixed feelings. Theseinclude the Central Lagos Slum Clearance Scheme the Falomo Squatter Settlement Clearance Scheme and the OlaleyeUrban Renewal (which will be discussed later).

In its determination to rid the major urban centres of unwholesome living environments and blight and to curbthe spread of slums the Federal Government initiated the Urban Renewal and Slum Upgrading Programme in 1988 as anoffshoot of the International Year of Shelter for the Homeless. Schemes under this programme are expected to have ademonstration effect enabling states and local government authorities to undertake their own projects. Currently,schemes have been successfully executed in Port Harcourt (Rivers State) Kano City (Kano State) Ganye (AdamawaState) and Maiduguri (Borno State). The emerging concept of these projects is the improvement of living conditionswithin the urban centres through the provision and upgrading of basic infrastructural facilities such as roads,drainage, water etc. Yet, except in an indirect way, it is doubtful if any of these projects has added much to thehousing-production process in the country.

The total budgetary allocation for these schemes up to the end of 1992 was N million. Out of this amount onlyabout N 4.5 million had actually been released by the end of 1991. A major constraint of this programme is the lack ofadequate funding to make an appreciable impact in the face of the enormous slum problems across the country.



4. The World Bank-assisted Urban Development-Programme (NSUDP)

The NSUDP is a joint undertaking of the Federal Government, state governments and the World Bank. Theprogramme is aimed at providing shelter for the low-income group, who would be provided with serviced plots,building materials loans on favourable terms as well as technical assistance and supervision, i.e., it was essentially asites-and-services/soft building loan scheme. Another component of the programme is the upgrading scheme,intended to provide infrastructural services to blighted neighbourhoods and to grant soft loans for individual homeimprovement within the neighbourhoods.

The NSUDP was formulated in the mid-1970s, to assist the then newly-created states of Bauchi, Benue,Gongola, Imo, Niger, Ogun and Ondo, as well as Lagos, in improving their housing stocks. Yet 10 years after itsinception, the programme had neither spread to other states as originally planned nor had it made any appreciableimpact on the shelter needs of the poor. It is a matter for regret that a self-help programme which had all the promisesof success should perform this poorly, and fail to be propagated. It may be for this reason (among others) that thefocus of the programme has been changed to the provision of infrastructure, hence its conversion to the IDFprogramme which was discussed earlier in this report.



5. Informal-sector activities

The contributions of the informal sector in the production of residential housing has been quite obvious overthe years. Unfortunately, data are not readily available to demonstrate this assertion. One can only make a guess onthe estimated percentage of their contribution. The informal sector has been very dominant prior to the promulgationof the New National Housing Policy. Yet, for the past two decades or so, when the public sector became more active inhousing production, the importance of the informal sector has been on the decline, its share of total production fallingfrom about 80 to 70 per cent (Achunine, 1993).


Chapter III. Lagos Metropolitan Area (LMA)

LMA, otherwise known as Greater Lagos, is an urban complex that embodies tremendous contrasts. As theformer national capital and the major port of the largest country in Africa, it is a powerful magnet for migrants from allover Nigeria. On to a nucleus of traditional African urban settlements are grafted modern industrial, commercial andadministrative establishments, as well as mushrooming settlements of new entrants into the labour force. Thesesettlements are sometimes up to 30-40 kilometres from the original city centre

Elements of widely-spread cultures coexist and intermingle. There are those suburban subdivisions of modern,single family homes alongside closely packed extended-family neighbourhoods without water or paved streets.Air-conditioned department stores and market stalls compete with thousands of street hawkers and tradeswomencarrying trays of cloth, oranges and tooth brushes on their heads. Trade unions and professional associations, kinshipmeetings and ethnic associations, elected council-men and inherited chieftaincies are some of the contrastinginstitutions. Factories and subsistence agriculture, office skyscrapers, luxury hotels and open sewers all coexist.

The "city of Lagos" has become the largest metropolis in Nigeria. The rapid urban growth which Nigeria hasexperienced is well manifested in Lagos, the major parts of which are the product of modern economic, social andpolitical forces in interaction with traditional culture. While the "heart" of Lagos is several hundreds years old, themetropolitan complex and modern sectors are products of the past 80 to 90 years and particularly of rapid growth sinceNigeria attained independence in 1960. Like many young metropolises in developing countries, Lagos does not havethe adequate supporting framework of urban infrastructure. It has no closed sewerage systems; a poor road network;an unsatisfactory public school system and severely restricted capital resources for which many investments compete.

The Lagos urban area as sometimes defined, includes the city and former Federal Territory of Lagos, theboundaries of which coincide. It also includes the suburban districts which were parts of the mainland previouslyunder the jurisdiction of former Western Region. The boundaries of this metropolitan complex are discernible on thebasis of both population density and economic patterns, although there is no formal administrative jurisdictioncorresponding to it. The metropolitan area is contiguous and its entire expanse could be traversed in a few hours if thetraffic congestion were to be eliminated. Persons living in Agege or Ikeja, at the northern extremity, often work inApapa (20 kilometres away) at the southern extremity. The population density falls off radically outside the perimeterof the settlements defined as part of LMA.

A very small proportion, less than 5 per cent of the urban area, is now devoted to agricultural uses. The city ofLagos itself has only about six square kilometres of undeveloped land; the rest is either built-up or reserved publicopen spaces which are gradually being converted into commercial and ceremonial edifices. By contrast, however, thereis a good deal of undeveloped land in outer portions of the urban area.

Lagos Island was the site of a traditional city whose population was swelled by refugees fleeing from wars inthe north of Nigeria and by conquerors from Benin. Vestiges of traditional settlement patterns are found in thenorth-western end of Lagos Island, which consists of singlestorey extended-family compounds and market stalls.Average population density is more than 500 persons per acre and 36 persons per house. This density is comparablewith New York's Manhattan Island.


Chapter III. Lagos Metropolitan Area (LMA)A. Scope and scale of the shelter problem

There is no city in Nigeria where the "housing failure' is more manifest than in Lagos. The legal acquisition ofland is far beyond the means of most people, as buildable land is in short supply; opportunities for employment arevery limited and the rate of population increase is high, thereby compounding the problematical housing situation.

Added to the above, it is common knowledge that prospective rental seekers have to queue up for more than ayear on "the waiting list" before they can even be considered eligible for or become fortunate enough to secure arental unit. Ownership of a house is a dream realized by only the upper 5 per cent of the income groups in Lagos.Sometimes prospective renters are persuaded to assist landlords to finance the construction of a rental house bypaying one or two years' rent in advance, in order to rent a room/rooms or flat whenever it is completed (Achunine,1977: 8-9). Many other sharp practices of this nature go on in the housing market in Lagos. Evidence abounds, but it isunfortunately never documented.

There are more migrants moving into LMA (mainly in search of jobs) than into all other cities in Nigeria puttogether. For example, between 1952 and 1963, the population of municipal Lagos rose from 267,407 to 665,246 - anannual increase of 8.6 per cent. Outside the municipality have amassed a further 424,622 people since 1963, making ametropolitan total of 1,089,868. The metropolitan population therefore grew by 19.2 per cent per annum. The figures ofthe 1991 Census for Lagos are not readily available, but it is generally believed the population of Lagos which wasabout 2.5 million in 1973 has risen to more than 3.0 million at present.

In order to cope with the fast rising population in Lagos, it has been estimated that about 100,000 additionalresidential units are required each year. Yet there is evidence that nothing near this target is being built each year,either by government and its housing agencies or by private individuals in the Lagos area. In more recent years thesituation has not improved considerably. For example, if approved building plans are anything to go by, about 400housing units only are supposed to be completed monthly in 1991, making a total of 4800 housing units annually.

In many parts of Lagos, especially where the poor and low-income people live, there is congestion, very highdensities and high occupancy ratios which create insanitary conditions. The overall infrastructural facilities arelikewise not adequate for the ever-increasing demands placed on them - resulting from a high rate of populationgrowth which has been increasing steadily. The provision of water, power and transport facilities is woefullyinadequate. Methods of disposal of solid and liquid wastes are sometimes rudimentary. There are open gutters whichserve as havens for malaria-carrying mosquitoes and flies. Such inadequacies in the provision of infrastructure hashad a tremendous impact on the production of housing. Sometimes it has led to existing units being lost to the marketthrough obsolescence, demolition, inaccessibility and similar factors. Residential houses become substandard within ashort period of being erected and many are outright uninhabitable.

1. Housing stock

The housing stock in LMA in late 1978 was estimated at 393,000 dwelling units in an estimated total of 98,163rateable properties. Ten years later the estimate had risen to 506,300 dwelling units. By the end of 1992, there were tobe well over 700,000 housing units in the LMA (Achunine, 1992).

There are essentially three categories of dwelling units in LMA, i.e., single homes, flats and rooms. Table 24shows that three out of every four households in Lagos are living in the rooming-type of dwelling unit. As can be seenfrom the table , single houses are significantly more common in Lagos than in urban areas in general (see table 9 ). Itshould be noted, however, that the figures do not necessarily reflect the housing stock per se, since many of thehouseholds reported as staying in the rooming-type may actually be sharing a "single houses" with several otherfamilies. The number of single houses is thus probably understated.

2. Housing needs

In view of inadequate statistical data and in the absence of detailed relevant surveys, housing needcalculations for the LMA should be kept as simple as possible to avoid major errors and still retain valuable indices ofthe housing deficit. It should be expressly noted, however, that any housing need calculation which is based on dataas incomplete and fragmentary as those of Nigeria, must be treated with caution and should not be accepted likesimilar computations in more developed countries which have available complete, reliable and accurate statistics.

The population increase in LMA between 1970 and 1974 was projected to be about 239,000, compared withabout 887,220 between 1976 and 1985. With an average household size of five, this translates into a need for 47,800plus 177,440 units, giving a need for 225,240 dwelling units (see table 25 ). Yet, this is not the only factor contributingto the total housing need. A total of about 112,000 units needs to be constructed to replace units demolished to makeroom for various public works. The major economic development projects that resulted in the demolition of housingunits during the 1970-1974 plan period was the Agege Motor Road Improvement. This, according to FMW&H,affected 50,000-60,000 people, or a total of about 12,000 dwellings. During the 19751980 plan period, more road andbridge constructions were undertaken affecting 100,000 people. In addition to this, more than half a million units of lowstandard need to be replaced, while another 60,000 units need to be replaced for other reasons.

A total of 22,000 units were required annually during 1970-1974, compared with 76,000 units annually during the1975-1985 period. When this estimate is compared with the Government's projected estimate of 1 2,000 dwelling unitsto be built per year from 1975 to 1980 for the entire country, there is evidence of inaccuracies in the estimation. Duringthe years 1981-1982, the figure was increased to 200,000 dwelling units for the country which was still inadequate. Yetthe crucial and unanswered question is: how many of these projected number were actually built, and, how many ofthem in Lagos, which needed at least 22,000 to maintain a minimum standard?

The demand for houses in Lagos comes from first renters (new households and existing households formerlyoccupying dwellings of different tenure) and households that are already housed but need to acquire better houses.On the supply side, part of the demand by first-time renters or occupiers is met from dwellings vacated by peoplemoving to better houses. Other houses come on to the market as a result of new construction, out-migration (throughtransfers and family dissolutions through divorce, death or old age). Tables Table 26 and 27 summarize the demandand supply for housing in Lagos during the 1976-1985 period. Based on these figures, Achunine (1993) has estimatedthe total deficit for the period to be nearly 240,000 units.

The forecast of effective demand for new houses does not necessarily follow from the demand and supplysections of the above tables simply by subtraction. Some of the houses vacated or newly built may be of a characterand in a location inferior to what renters/ purchasers want and can pay for. So they are likely to remain on the marketfor sometime. But in a place like Lagos with an acute housing shortage, it is doubtful if there would be any suchvacancy.



1. Housing stock

The housing stock in LMA in late 1978 was estimated at 393,000 dwelling units in an estimated total of 98,163rateable properties. Ten years later the estimate had risen to 506,300 dwelling units. By the end of 1992, there were tobe well over 700,000 housing units in the LMA (Achunine, 1992).

There are essentially three categories of dwelling units in LMA, i.e., single homes, flats and rooms. Table 24shows that three out of every four households in Lagos are living in the rooming-type of dwelling unit. As can be seenfrom the table , single houses are significantly more common in Lagos than in urban areas in general (see table 9 ). Itshould be noted, however, that the figures do not necessarily reflect the housing stock per se, since many of thehouseholds reported as staying in the rooming-type may actually be sharing a "single houses" with several otherfamilies. The number of single houses is thus probably understated.



2. Housing needs

In view of inadequate statistical data and in the absence of detailed relevant surveys, housing needcalculations for the LMA should be kept as simple as possible to avoid major errors and still retain valuable indices ofthe housing deficit. It should be expressly noted, however, that any housing need calculation which is based on dataas incomplete and fragmentary as those of Nigeria, must be treated with caution and should not be accepted likesimilar computations in more developed countries which have available complete, reliable and accurate statistics.

The population increase in LMA between 1970 and 1974 was projected to be about 239,000, compared withabout 887,220 between 1976 and 1985. With an average household size of five, this translates into a need for 47,800plus 177,440 units, giving a need for 225,240 dwelling units (see table 25 ). Yet, this is not the only factor contributingto the total housing need. A total of about 112,000 units needs to be constructed to replace units demolished to makeroom for various public works. The major economic development projects that resulted in the demolition of housingunits during the 1970-1974 plan period was the Agege Motor Road Improvement. This, according to FMW&H,affected 50,000-60,000 people, or a total of about 12,000 dwellings. During the 19751980 plan period, more road andbridge constructions were undertaken affecting 100,000 people. In addition to this, more than half a million units of lowstandard need to be replaced, while another 60,000 units need to be replaced for other reasons.

A total of 22,000 units were required annually during 1970-1974, compared with 76,000 units annually during the1975-1985 period. When this estimate is compared with the Government's projected estimate of 1 2,000 dwelling unitsto be built per year from 1975 to 1980 for the entire country, there is evidence of inaccuracies in the estimation. Duringthe years 1981-1982, the figure was increased to 200,000 dwelling units for the country which was still inadequate. Yetthe crucial and unanswered question is: how many of these projected number were actually built, and, how many ofthem in Lagos, which needed at least 22,000 to maintain a minimum standard?

The demand for houses in Lagos comes from first renters (new households and existing households formerlyoccupying dwellings of different tenure) and households that are already housed but need to acquire better houses.On the supply side, part of the demand by first-time renters or occupiers is met from dwellings vacated by peoplemoving to better houses. Other houses come on to the market as a result of new construction, out-migration (throughtransfers and family dissolutions through divorce, death or old age). Tables Table 26 and 27 summarize the demandand supply for housing in Lagos during the 1976-1985 period. Based on these figures, Achunine (1993) has estimatedthe total deficit for the period to be nearly 240,000 units.

The forecast of effective demand for new houses does not necessarily follow from the demand and supplysections of the above tables simply by subtraction. Some of the houses vacated or newly built may be of a characterand in a location inferior to what renters/ purchasers want and can pay for. So they are likely to remain on the marketfor sometime. But in a place like Lagos with an acute housing shortage, it is doubtful if there would be any suchvacancy.


Chapter III. Lagos Metropolitan Area (LMA)B. Actors in the shelter-delivery process

There are several actors involved in the shelter-delivery process in LMA. The actors include the FederalGovernment and its agencies, the state government and its parastatals assigned the responsibilities of housingproduction and allocation and some local government authorities. For several decades large- and small-scalecontractors have contributed immensely to housing delivery. But above all, individuals and households have been themajor actors in this process. The contributions of NGOs, CBOs, cooperatives etc. have been negligible. Below followsa short discussion of the responsibilities and relative importance of these actors. It should be noted that in theformulation and execution of housing-delivery policies distinction is seldom made between the responsibilities at thenational, state or local/city-wide levels, probably except in terms of magnitude and volume of financial outlay andproduction.


Chapter III. Lagos Metropolitan Area (LMA)B. Actors in the shelter-delivery process1. Government and public-sector agencies

The right institutional set-up forms the basis of the entire housing-delivery system, and as such greatlyinfluences the success of housing delivery. Institutional roles begin at the initial stages of policy development andcontinue through the implementation and review stages. A major factor on which the fundamental relationshipbetween the various actors in housing delivery can be achieved is the flexibility to adjust to dynamic socioeconomicand political changes without unnecessary disruption to the system. It is, therefore, desirable to centralize policy andprogramme control while decentralizing activities. Given the socio-economic and political significance of housing andhousing facilities all the three levels of government (and their relevant agencies) must be involved and assignedspecific roles in housing delivery (FRN, 1991: 13).



a. The Federal Government

The Federal Government initiates, defines and coordinates the policy options and instruments for achievingobjectives in the housing sector while the actual implementation is supposed to be undertaken by appropriateagencies at federal, state and local government levels. In the formulation of this national policy, the coordination ofhousing construction and monitoring of the housing programmes little particular attention is paid to such local entitiesas cities. However, since LMA epitomizes the acute national housing deficit and problems, some specialconsiderations have always been given to it in the allocation of units to be built during any of the development planperiods since 1962.

In 1972, for example, as a result of the establishment of a National Housing Programme during the SecondNational Development Plan period, the Federal Government proposed to construct 59,000 dwelling units with 15,000 inLagos and 4000 units in each of the other 11 state capitals. Again during the Third National Development Plan period(1975-1980) a total of 202,000 dwelling units were programmed for construction comprising 50,000 units in Lagos and8000 units in each of the other 19 States. It is pertinent to note that by the end of that Plan period, less than 15 per centof the housing units had been completed. However, during the civilian administration (1979-1983) no specialpreference was given to Lagos. Of the 40,000 units that were earmarked for construction annually nationwide, 2000units were allocated to each state including FCT Abuja. Thus, FCT began to assume its role as the future nationalcapital seemingly relegating Lagos, at least administratively. Yet the Federal Government has played a significant rolein alleviating the housing problems of the LMA by specific policies in the housing sector. The development of thefederal low-cost Housing project in Iyana Ipaja and Abesan has greatly helped in solving the housing programme forthat group.

The FHA was set up in 1973 to perform three principal functions, including the execution of housingprogrammes as may be approved by the Government. Between 1979 and 1985, the FHA was only minimally involved inthe federal housing programme. Until recently, FHA was not able to discharge effectively the functions of providingaffordable housing for all income groups. This was due to overdependence on subventions from FMW&H and itsinability to recover outstanding mortgage repayments from beneficiaries.

The FHA has so far developed two large residential estates in Lagos, namely Festival Town (FESTAC) andIpaja New Town. Festival Town is the largest and most monumental estate so far undertaken by the Authority. It wasdesigned with the short term objective of accommodating participants to FESTAC '77. The Ipaja New Town Estatecovers an area of 180 hectares with 3044 housing units. The estate is well serviced with infrastructural facilities. In fact,the services are a replica of that of Festival Town. The FHA is thus one of the few agencies at the federal level in theforefront of producing relatively affordable housing. By the development of these two estates, FHA has openedadjoining areas for housing development.

In addition to houses provided directly by the Federal Government through FMW&H and FHA, other agenciesof the Federal Government in the Lagos area have also provided housing accommodation for staff. These include theArmy, the Navy, the Air Force and the Police. They have large barracks in various parts of the city. The total numberof units in these barracks is not easily determined, but there is no doubt that the construction of barracks hascontributed tremendously in the provision of accommodation for all categories of income groups within the armedforces.



b. The state government

Each state government formulates its housing policies and programmes in line with the overall NationalHousing Policy. In order to carry out this function effectively, it establishes an appropriate agency - like a housingcorporation - to execute its public housing programme. The LMA is within the jurisdiction of the Lagos stategovernment, and this section deals briefly with the attempts by the Lagos state government to provideaccommodation for its citizens. The Lagos state government has not been directly engaged in the provision ofresidential units, but it has been indirectly involved through LEDB and now the Lagos State Development andProperty Corporation (LSDPC). One of the primary functions of LSDPC is the establishment of a homeownershipsavings scheme.

Since its inception in 1972, LSDPC had been the sole agent of the Lagos state government in the field ofhousing. It is in acknowledgement of its ability to perform that it was saddled with the execution of a gigantic LowCost Housing Programme in the early 1980s which yielded at least 10,000 completed housing units (which was farbelow the expected target, however). In 1979, the housing programme of LSDPC took a dynamic and elaborate turnwith the emphasis on low-cost flats to cater for the needs of the low-income earners. The Government then realizedthat only the supply of housing units on a large scale, either by the Government or by individuals themselves couldbring down the exorbitant house rents in Lagos. The new dynamic housing policy for Lagos State and consequentlyfor LMA was built on five main principles:

A crash programme by the state government to build 50,000 housing units for the low- and medium-incomegroups within four years (1979-1983);

A liberal policy of repayment for the allottees of state government housing units;

A liberal land policy of making land available to the high-income group whose members might wish to buildtheir own houses;

A better and easier system of processing building plans;

A housing loan scheme to assist anyone who was either buying a house or building one.

Since 1979, the implementation of this policy has led to an increase in homeownership in both Lagos State andin LMA. Consequently, LSDPC embarked on the construction of more than 10,000 low-cost housing units at variouslocations in LMA (see table 28 ). These are blocks of six flats, each flat consisting of three bedrooms, one WC and ashower. The LSDPC also embarked on the construction of more than 1200 medium-income flats in blocks of four flats,each flat consisting of four bedrooms with all conveniences (see table 29 ). The LSDPC also constructedupper-medium income flats and duplexes as well as luxury flats (see table 30 ).

Recently, the Lagos state government launched what it termed the "Jubilee Housing Scheme" to reflect the 25thAnniversary of the creation of the State. The scheme is earmarked for junior civil servants and other low-incomeearners and was conceived to reduce the housing problem facing the masses in LMA and the state at large. Thescheme will, according to current plans, comprise of 100,000 housing units, in all parts of Lagos State. The applicationfee for the purchase of each unit is N 250,000 while the purchase price is N 80,000 which will be settled through amortgage arrangement, the details of which is still being worked out.



c. The local governments

In view of serious problems of funding and executive capacity, local government authorities in LMA have notbeen able to perform effectively in housing delivery. However, as the closest level of government to the people, thelocal governments have a potential key role to play in housing. Accordingly, it has been proposed that adequatefunding should be provided for them to perform this assigned function. There is little or no evidence to show that thelocal governments have made any significant contribution in the housing projection in LMA.



2. Private-sector actors

For several decades, large-scale contractors have contributed immensely to housing delivery in Lagos. lithecontractors that have been dominant in this effort are Cappa D'Alberto, G. Cappa, Taylor Woodrow, Mitchlette andsome other indigenous ones. Their main contribution has been to carry out construction for their numerous clientsespecially government and companies. In the past two or three decades, a few other contractors have engaged in theconstruction of residential houses for clients and for their staff in the Lagos area. These include: HFP, DIV. Bouygues,Bredero Company etc. Recently, however, a few of them have acquired land and are developing large estates where thehouses are offered for sale as "ready-to-move-in units". Data on the actual housing production by these contractorsare hard to come by. Table 31 provides data for one of these companies, HFP, as an example to demonstrate theircontribution.



3. Housing-finance institutions

There are various financial institutions operating in the city of Lagos that grant loans for the production ofresidential accommodation. The relative importance of some of these financial outfits - especially those of the publicsector like FMBN - has been discussed earlier in this report. As mentioned earlier, until the promulgation of theNational Housing Policy in February 1991, the FMBN was the only financial agency that had a structured savings andloans mechanism for housing delivery. The main categories of savings and loans operated by the Bank with therelevant interest rates have already been outlined. For several decades when it operated as a retail mortgage outfit,most of the applicants for its loans and the entire patronage were based in Lagos. Thus, most of its beneficiariesutilized their loans for housing in LMA. This concentration was as a result of the acute housing shortages andproblems in Lagos and its environs.

Commercial banks have also been involved in granting loans for residential housing in the city. But for obviousreasons, high interest rates and shorter amortization periods, they have not been largely patronized. Insurancecompanies have also financed the production and purchase of residential accommodation in Lagos. There are,however, no statistics to illustrate these efforts.

Recently, the Federal Government has created a new housing finance system in Nigeria. Thus, the FMBN hasbeen converted into an apex institution which will concentrate on wholesale mortgage operations to primary mortgageinstitution. There is also a decentralized network of building societies, housing cooperatives, savings banks, housingassociations and credit unions forming the second tier at the grass-roots level. This arrangement was formalized by theenactment of Decree No. 3 of 1992 which established the NHF. The operations of all these financial institutions areconcentrated in the city of Lagos and its environs. From all indications however, it appears that they have not grantedany substantial number of loans that could make any appreciable impact in the housing-delivery system. In fact, someof them have not got off the ground to merit any form of assessment. It is hoped that in the near future they will makemajor contributions in solving the housing problems in the LMA. Of the 145 mortgage institutions already licensed,more than 95 per cent operate solely in Lagos.


Chapter III. Lagos Metropolitan Area (LMA)C. Housing production

This section discusses the actual number of residential houses produced in Lagos. In view of the difficultiesencountered in obtaining adequate data, however, the discussion is not very detailed.



1. Traditional housing

The main actors that have designed and implemented these schemes in the past are public sector actors. Thecontribution of the main actors, the FHA and LSDPC, has been outlined in section III.B .



2. Sites-and-services scheme

The sites-and-services scheme is a national programme, which is implemented by both federal and stategovernments to increase the supply of land for residential development by all income groups and to promote orderlydevelopment of human settlements with corresponding essential facilities such as roads, water, electricity, commercial,recreational, health and educational places. The federal scheme has taken off in Lagos at Isheri-Olofin, Abesan andSatellite Town, while the state government scheme is being implemented in its New Town Development at LekkiPeninsula. The federal programme has generated a total of 6723 serviced plots which have already been allocated (seetable 32 ). Since the inception of the scheme in 1989 up to the end of the 1991 financial year, the Federal Governmenthad allocated a total of N 67 million for the prosecution of these schemes.

Over the last 40 years or so, the public sector in Nigeria has been involved in the effort to upgrade some slumsections of its major cities, especially Lagos, Port Harcourt, Kano, Bauchi and Owerri. While some of the efforts wereundertaken some four decades ago - involving major slum clearance and settlement upgrading - recent efforts havebeen on a more modest scale and with less devastating effects except the most recent experience in Maroko at thedoorstep of Ikoyi and Victoria Island in Lagos. There have been settlement upgrading schemes executed as part of theNigerian States Urban Development Programme, initiated in 1977, but implemented in Bauchi and Owerri between thelate 1970s and the 1980s. Since then, the Federal Government. in its determination to rid the country's major urbancentres of slums and blight, initiated an Urban Renewal and Slum Upgrading Programme in 1988.

A few settlement-upgrading schemes have been carried out in LMA. Three such schemes are outlined below.The first is the Central Lagos Slum Clearance scheme, which became operative in 1955 in a densely populated trading,industrial, residential and market area containing more than 30,000 poor people. The scheme would eventually involvethe relocation/rehousing of about 200,000 people over a period of five to seven years. The agency designated to carryout the task was LEDB, which after acquiring the plots by compulsory purchase was to replan the area with roads,open spaces and new plot layout. In spite of all the good intentions of the Government regarding the slum clearance ofcentral Lagos, and the assurances and arrangements made by the LEDB for the displaced residents to repossess theirplots after replanning, one problem stared the authorities in the face, that is: where to resettle the families while the sitewas being rebuilt? This was solved by planning a housing development scheme on vacant land in Surulere about 8kilometres from central Lagos. The development comprised terraced cottages containing one to four rooms provided atsubsidized rent. By 1962, Surulere had expanded into a major venture of about 1513 costly housing units for thedisplaced families and another 1300 units for others. Today Surulere has become one of the fastest growingsettlements of LMA and has expanded into new neighbouring areas with a total population of more than 1 million. (2)

The second scheme to be mentioned here is the Maroko and Ilado Resettlement scheme, which involved thedemolition of these areas and the resettlement of their population in three locations, namely Ikota, Ilasan and Ikoroduhousing estates. The two settlements covered about 100,000 hectares and had existed for about 32 years beforedemolition and had their origin in small fishing villages. Maroko alone was occupied by about 300,000 people. Thesewere, however, inadequate to resettle the evacuees. The real point to note here in this particular exercise is that it didnot add any units to the housing stock of LMA, rather it had a negative effect.

The third scheme, the Olaleye/Iponri Urban Renewal scheme was the result of a Federal Government grant forInternational Year of Shelter for the Homeless activities in 1987, to complement the efforts of the Lagos Stategovernment which was implementing an urban renewal programme in the area. The village had been established over150 years earlier. Yet, its settlement profile is representative of a typical slum. The population of about 20,000 werefaced with severe overcrowding (4.1 persons per room), and 9 out of 10 dwelling units were classified as being in avery poor condition (Achunine 1993). By 1993, improvements at the site were rather impressive by Nigerian standards:

A major access road into the neighbourhood had been built;

The road network within the neighbourhood had been constructed and had enhanced internal trafficcirculation significantly;

Standard water pipes were provided at strategic locations within the neighbourhood;

Above all, 220 new residential plots had been built to accommodate displaced families.


Chapter IV. Adoption of enabling shelter strategies and alleviation of the housing problem inNigeria

Since independence in 1960, the interest of the Nigerian Government in housing-delivery efforts has shown asteady increase. During the Third National Development Plan Period (1975-1980) it began to recognize the housingsector as an integral part of the economic development process. From then on, shelter provision for the people hasremained a matter of considerable interest and has thus received the priority it deserves.

The enormity of the housing problem in Nigeria today is quite intimidating. Although, the official estimate ofthe need for new housing units in the 1990s is put at 8 million, Achunine (1993) estimates the need to be in the regionof 12-lS million units. By the end of 1980, it had become clear to the public sector that its past policies had failed tosolve the ever worsening housing situation, and that a radical change in policy was mandatory. This change in policyhas since been adopted, leading to the enactment of the new National Housing Policy.

Yet, in spite of the adoption of enabling strategies, the overall housing supply continues to fall short ofdemand, both at the national and at the city level. Today, the growing shortfall between demand for, and supply ofhousing units - particularly in the urban centres - has come to represent the most visible impact which the prevailingeconomic situation has had on the housing sector. Increased construction costs have compounded the situationunder which housing finance has all but outpriced its relevance to the overwhelming majority. All the efforts beingmade to alleviate the housing problems notwithstanding, the housing situation in Nigeria appears to be at acrossroads, despite the establishment of 145 mortgage institutions and the new National Housing Policy which is stilltrying to find its feet. There are still obstacles which have militated against an effective housing supply. Some of theseare discussed briefly below.



A. Obstacles to an effective housing supply

It is obvious that housing supply in Nigeria has not kept pace with housing demand. A number of reasons canbe identified for this situation. These include:

Unstreamlined and incompetent mortgage arrangements;

High cost and sometimes inaccessibility of land;

High construction costs occasioned by the continuous upward rise in the cost of building materials;

Lack of a skilled workforce;

Inadequate housing finance;

Too much attention given to prestigious projects;

Most builders of residential accommodation are set on recovering their invested capital within the shortestpossible time;

In enforcing development control measures, very high standards are usually set. This has a negative effecton housing provision. Appropriate building standards can do much to create a safe and pleasantenvironment. Yet, misconceived, they can contribute to depressing the living standards of the poor. If suchregulations are inappropriate and set standards to high for existing income levels, their primary effect will beto reduce the amount of housing that is available at prices the people can afford.



B. Shelter programmes and activities and the low-income groups

The interest of past Governments in the provision of houses for the Nigerian masses should be noted.Unfortunately, the strategies adopted have been of little benefit to the low-income groups. The direct construction oflow-cost houses during the last civilian regime was a failure. In terms of housing finance, the various loan schemes didnot adequately cater for the needs of the low-income groups. Similarly, the machinery for the implementation ofhousing programmes was inefficient while the initial conception of housing need was narrow. It was also known thatthe sincerity behind some of the set targets was questionable. In general, the various housing policy and programmeswere introduced and implemented without adequate knowledge of the nature, scope and dimension of the housingproblems.

The lack of finance constituted the most important factor inhibiting the access of low-income Nigerians todecent housing. This lack was due to high interest rates; their inability to afford the necessary downpayments, theirlow earning power which makes it impossible for them to afford the monthly repayment rates; and their inability toprovide reliable guarantors that are acceptable to the mortgage institutions. Consequently, only a few urban dwellers(and even fewer rural dwellers) have so far benefited from mortgage loans by commercial banks, FMBN and the statehousing corporations.

In addition to lack of finance, the low-income groups are also faced by severe problems due to the high rate ofinflation; the inadequate infrastructural facilities and the limited access to serviced land; and the difficulties ofobtaining title (or certificates of occupancy).



C. Conclusions and recommendations

The methods of assessing housing requirements have undergone substantial changes over the past fewdecades. Yet, the precise extent, nature and place of housing need and demand in the light of the process ofurbanization have become apparent rather slowly over the years, especially in developing countries. Total housingrequirements and production of any country or city should be estimated periodically as a basis for establishing targetsand goals.

For much of the developing world, processes of housing allocation and investment become more critical due torapid urbanization, excessive migration and rather hasty development plans. In Nigeria, these processes have createdenormous problems over the past five decades. Yet less than 2 per cent of the gross national and even city producthas been devoted to residential housing, and only about two dwelling units are constructed per 1000 people annually.

Fortunately, the Federal Government has of late come to recognize its responsibilities in this sector.Nonetheless, the private sector and market forces dominate the rather complicated housing system. A lot of filtering(down) or "raiding" takes place and this affect the low-income groups adversely.

Although housing conditions are generally inadequate in the rural areas, Nigerian housing problems like thoseof other developing countries are essentially an urban problem. As a result of the acute shortage of suitable rentalaccommodation, especially for the low-income groups in the major cities, rents are extremely high and the averageurban worker often has to pay as much as 40 per cent of his or her monthly income in rent. This is a major factor in thedistortion of income distribution in favour of the propertyowning class and constitutes an obstacle in the realization ofone of the long-term goals of Nigeria's development effort - the attainment of a just and egalitarian society. There is noarea of social service where the urban worker in Nigeria now needs relief more desperately than in housing.

Some recommendations on how to solve the housing problems in Nigeria are outlined below:

The right of everyone to live in a decent home should be honoured and the supply of dwellings should betuned to the needs of the people. The primary goals of the National Housing Policy in Nigeria - the provisionof a satisfactory dwelling for everyone at a price or rent he or she can afford - should be more vigorouslypursued.

Government administration and its policies towards the housing sector should be seen as instruments forthe implementation and fulfillment of national housing goals. The role of Government in influencing the pricemechanism of the housing market should be effectively and positively exercised. It is essential that the largeinvestment in housing construction is made with regard to long term social and economic considerations inorder to maintain the value of these investments.

The Government should continue its laudable efforts towards the development and recognition of the manyfinancial institutions; not only the mortgage institutions, but the Nigerian Provident Fund, insurancecompanies etc., as well.

The use of locally-produced building materials like burnt bricks etc. should be encouraged.

The large-scale construction firms and contractors should be further encouraged to provide housing fortheir employees.

Land prices should be made more accessible to the general public.

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