Ahmed Musa Dangiwa, is an architect and Minister, Housing and Urban Development. He was the immediate past Managing Director, Federal Mortgage Bank of Nigeria. He spoke to CHINEDUM UWAEGBULAM in an exclusive interview on his plans for the ministry, lingering challenge of national housing data, Land Use Act review and other issues.
Private real estate developers and other stakeholders have complained about the Federal Government engaging in direct construction of houses instead of formulating policies and setting standards for the housing sector, as enshrined in the National Housing Policy. What are your thoughts on this?
First, I would like to thank President Bola Ahmed Tinubu for giving me the privilege to contribute to the development of the country as the Minister for Housing and Urban Development.
I have over 30 years of experience in the housing industry, both as a practicing architect and as the owner of a reputable architectural firm. Additionally, I spent five years working as the Managing Director/Chief Executive Officer of the Federal Mortgage Bank of Nigeria (FMBN).
I can tell you that those complaints, raised not only by real estate developers and stakeholders, but also by all those who genuinely desire the growth of the housing sector to foster access to affordable shelter, while unlocking its potential as a catalyst for inclusive economic growth, are indeed valid.
As the minister, I have already stated during Senate screening and address to principal officers of the Ministry and Heads of agencies, that the government has no business engaging in direct construction of houses. Let me provide you with some examples.
Firstly, government involvement in direct construction of houses has never yielded the expected and projected results. If you look at history, you will find that in 1972, the Federal Government established the National Housing Programme (NHP) under the second National Development Plan period. The government planned to build 59,000 homes, with 15,000 in Lagos and 4,000 units in each of the other 11 state capitals at the time. In 1973, the Federal Housing Authority was created to coordinate the programme.
Between 1975 and 1980, during the Third National Development Plan, the Federal Government decided to actively participate in the provision of housing, rather than leaving it primarily to the private sector. A total of N2.6 billion was earmarked for the implementation of various projects. During this period, a total of 202,000 homes were planned for construction, consisting of 50,000 units in Lagos and 8,000 units in each of the other 19 States. However, by the end of the plan period, less than 15 per cent of the houses had been completed.
In 1980, the government embarked on another elaborate NHP. The target groups were low-income earners, whose yearly income could afford a one-bedroom house, and the medium-income group with yearly income that could afford a three-bedroom house. A total of 40,000 units were to be constructed yearly nationwide, with 2,000 units designated for each state and the Federal Capital Territory (FCT). At the end of the exercise, not much was achieved.
Although the Federal Government budgeted about N1.9 billion for housing in the Fourth National Development Plan, an estimated sum of N600 million was spent on implementing the National Low-Cost Housing Programme. Given this level of investment, the programme had a negligible impact on the overall housing market.
These are just a few examples of failed government interventions in housing construction. The reasons for this negative trend are easy to extrapolate. They include faulty concept designs, politically motivated schemes that do not consider implementation challenges, and, of course, outright fraud and corruption.
For instance, in the earliest cases, studies indicate that a single design was adopted for the entire country, regardless of varying cultural and climatic differences. The distribution and selection of sites had little to no relation to the actual demand for housing. Most states politicised the programme, offering land in remote areas with poor terrain to the Federal Government. Contractor appointments were often based on party patronage rather than capability and experience. Furthermore, houses were allocated to party members, who neither needed them nor qualified as low-income earners.
The lesson from history is clear, and we all acknowledge that repeating the same actions and expecting different results is unreasonable. In my view, the ministry’s role involves creating an enabling environment for increased private sector investment in the housing sector, while empowering agencies
What are your plans as the Minister of Housing and Urban Development?
I intend to chart a fundamentally different course of action that is sustainable and will help unlock the potential of the housing sector. In line with the vision of the president, I promise to take bold initiatives, champion strategic housing reforms, and break systemic barriers to housing and urban development. We will collaborate closely with the National Assembly to review relevant laws, streamline land and housing administration, and create a conducive environment for investment in the housing sector.
We will facilitate the N500 billion recapitalisation of the Federal Mortgage Bank of Nigeria (FMBN) to provide it with leverage and enhance its ability to offer more affordable mortgage loans and rent-to-own options to Nigerians. We will reform the FMBN, Federal Housing Authority (FHA), and other housing agencies, ensuring they possess the necessary capacity and technological edge to deliver world-class services to Nigerians.
Our goal is to ensure that these strategic agencies are more effective and efficient in delivering decent and quality housing to Nigerians on a massive scale. By doing so, we will also harness the immense power of the construction industry to generate jobs and contribute to achieving the president’s plan to grow the economy, foster inclusive growth, and uplift 100 million Nigerians from poverty.
Furthermore, we will embrace innovative housing construction financing solutions, while collaborating with relevant institutions to unlock the funding required for delivering massive affordable housing nationwide. In the coming days, we will unveil our Strategic Housing and Urban Development Blueprint, containing details of our priorities, initiatives, reforms, and plans.
The lack of reliable comprehensive national statistics on housing and urban development has been a persistent constraint on housing delivery in Nigeria, as it hampers effective planning, budgeting, and investment in the sector. How would you handle this endemic problem?
It troubles me deeply that as a country and a sector, we lack credible data related to housing and the state of our towns and communities nationwide. This has been and will continue to be the obstacle to effective project planning and implementation unless we take proactive measures.
For quite some time, we’ve seen industry experts cite varying numbers for Nigeria’s housing deficit—starting at 17 million and gradually escalating to 20 million, then 22 million, and now discussions around a 28 million housing shortage. Yet, these figures lack substantiated evidence.
Addressing this issue is a top priority for me. Firstly, I plan to ensure, as a ministry focused on policy formulation, that we establish a robust policy, research, and statistics framework within the ministry. This framework will vigilantly monitor developments, trends, and changes in the country’s housing mix. It will be staffed by qualified personnel. Additionally, I will engage data consultants to collaborate with them on conducting the first government-sponsored Nationwide Housing Survey.
This survey will aim to scientifically determine the actual housing shortage in the country. It is about time we did our homework. It is our responsibility as a nation to lead this effort and not rely on extrapolations from foreign bodies and institutions. Creating this knowledge base within the ministry will be a paramount objective. It will help institutionalise the data collation practice.
Furthermore, I plan to collaborate with the National Population Commission (NPC) as they prepare for the next nationwide census. I have already initiated discussions with the commission’s leadership with the aim of leveraging the census to gather data about housing in the country.”
Accessibility to large pools of long-term funds at cheap rates is imperative for mass housing development. However, it is impossible to mobilize such funds in the absence of a well-developed and efficient housing finance system. What are the challenges? How would you transform the mortgage sector?
Housing finance plays a critical role in the housing delivery framework. It is the engine that propels the housing sector, encompassing the funds required for housing unit development, housing infrastructure provision, and housing unit acquisition.
Accessibility to substantial pools of long-term funds at low rates is indispensable for mass housing development, yet it becomes unattainable without a well-developed and efficient housing finance system. Thus, the establishment of an efficient and well-structured housing finance mechanism is imperative.
This mechanism must address affordability for households, accessibility and viability for financial institutions and developers. Additionally, it should incorporate enforceable property rights, an effective registration and titling system, adequate foreclosure laws, diversified funding including mortgage securities, a credit information system, robust prudential regulations, a level playing field among lenders, and sound risk management practices.
Other vital components include accessible and reliable housing data, the presence of professional real estate intermediaries, urban development regulations aligned with economic realities, and access to titled land for developers.
As I mentioned earlier, as a minister, I am committed to driving these reforms in collaboration with all stakeholders including the Central Bank of Nigeria (CBN), Nigeria Mortgage Refinance Company (NMRC), National Assembly, and state governments. We will review the relevant laws and regulations that will help create a conducive environment to attract domestic and international resources to expand the sector.
This approach is crucial to building investor confidence in the system and channelling the substantial funds currently lying dormant in Pension funds, foreign direct investments, and Diaspora remittances into the housing sector.
The Land Use Act was intended to facilitate the availability of urban and rural land for development. However, the Act has been a constraining factor in housing delivery since its inclusion in the Constitution, making even minor amendments difficult. What steps would you take? Will you push for the establishment of a National Land Commission?
Land is an essential requirement for sustainable housing delivery. Challenges associated with land acquisition for housing include availability, accessibility, ownership rights, security of tenure, and the absence of land use plans. These pose significant obstacles to development across both the public and private sectors of the economy.
The Land Use Act (LUA) was originally intended to streamline the availability of urban and rural land for development. However, its inclusion in the Constitution has inadvertently constrained housing delivery. Issues include the Act’s inflexibility, making even minor amendments difficult; the vesting of all lands in the states in the governors and federal lands in the presidency; cumbersome and costly procedures for obtaining Certificates of Occupancy, consents to mortgage, assignments, and leases; and a restriction, as stated in section 34(8) of the Act, on private developers to acquire a maximum of half a hectare of urban land.
Since its enactment in 1978, the LUA’s objectives have not been fully realised. Therefore, it is imperative that the Act undergoes necessary amendments. As I mentioned earlier, I will collaborate closely with the National Assembly to facilitate a review of the Act.
Many Nigerians can’t afford roofs over their heads due to the escalating cost of building materials and exchange rates. What strategies will you employ to enhance local capabilities and reduce dependence on imported building materials for the delivery of affordable housing to Nigerians?
The soaring cost of building materials is closely tied to the broader macroeconomic environment, including rampant inflation. However, I am dedicated to seeking innovative measures to reduce building material costs, enabling more Nigerians to secure housing.
For one, I plan to foster the growth and sustainability of the Building Material Producers Association of Nigeria (BUMPAN) and similar institutions by offering fiscal incentives to small and medium-scale local manufacturers of building materials. This strategy aims to boost local production and gradually reduce dependence on imported building materials as part of a medium and long-term strategy.
I will also encourage the adoption of appropriate and cost-effective house designs tailored to various regions of the country, addressing local considerations and preferences.
Furthermore, I will support partnerships between research institutions and private organisations. This includes encouraging private sector organizations and other entities to fund research related to innovations in design, local materials, and their applications, as part of their corporate social responsibility.
I intend to collaborate with institutions such as the Federal Ministry of Industries, Nigerian Building and Roads Research Institute, and Committee of Bankers to promote the growth of Small and Medium-Scale industries within the building materials sub-sector nationwide.
The Muhammadu Buhari administration embarked on housing projects across the federation that set a new price for houses in the real estate market, especially one-bedroom house types, costing between N7,222,404 and N9,268,751. These houses, we’ve gathered, are in obscure locations and incomplete. What do you intend to do to attract buyers?
I am fully aware of the challenges that the latest version of the NHP faces in terms of selling houses that have been constructed and delivered. The prices are beyond the reach of the target market – low to medium income earner, and the locations are inaccessible. This situation has tied up significant government funds, and without swift action, these houses could begin to deteriorate.
One assurance I can provide is that under my leadership, I will prioritise affordability in house design and delivery. In the case of this specific project, we will carefully study and review the factors that led to the current pricing and determine the best approach to make these houses accessible to Nigerians.
The goal is to promote affordability, attract potential buyers, and ultimately ensure that these housing units benefit Nigerians.
The five-year term you had at FMBN set the apex mortgage bank on the path of transparency, profitability, efficiency, innovation, and wider impact as a social housing delivery institution. What were these achievements?
I am proud to say that during my leadership at FMBN, the bank achieved unprecedented performance across all metrics. Among several other accomplishments, we increased Contributions to the National Housing Funds (NHF) Scheme by N279 billion (in five years), elevating it from the N232 billion collected over the past 25 years prior to my assumption of leadership in April 2017, to N511 billion by the conclusion of my tenure in April 2022.
We also bolstered Affordable Housing Loan Disbursements by N175 billion (in five years), increasing it from N152 billion disbursed over the previous 25 years to N327 billion. Tangible outcomes include 5,938 NHF Mortgage loans enabling Nigerians to own their dream homes, the provision of Home Renovation Loans to 77,575 beneficiaries, and financing for the construction of over 13,339 affordable housing units.
We optimised operations and increased NHF refunds to retired contributors by N39.5 billion, benefiting 247,521 individuals. This was a significant improvement from the N10.8 billion paid to 132,605 retirees during the 25 years preceding my leadership at the Bank.
Additionally, I had the privilege of conceiving and launching the N40 billion FMBN Mega Cities Project aimed at creating liveable communities with infrastructure for low to middle-income Nigerians.
Moreover, I led FMBN to take several unprecedented steps to make homeownership more affordable. Firstly, we undertook a downward review of equity requirements for FMBN housing loans, reducing the equity contribution from 10 to zero per cent for loans of N5 million and below, and from 30 to 10 per cent for loans above N5 million.
Secondly, we developed innovative housing products for potential homeowners, including the Diaspora Mortgage Loan to protect Nigerians abroad from exploitation, the Individual Construction Loan to empower contributors with legal lands and reasonable bills of quantities for building their dream homes, and the Non-Interest Rent-to-Own (Ethical RTO) scheme to cater to the needs of many Nigerians seeking non-interest products.
To ensure FMBN’s solid foundation, we collaborated with KPMG to develop a Five-Year Strategy Plan for the Bank. The plan aimed to deliver 100,000 housing units annually, increase NHF annual collections from N50 billion to over N300 billion, and expand the NHF customer base by 25 million new contributors primarily from the informal sector, to 31 million.