Housing policy should be pro low income earners —Onyemaechi

Dr Paschal Dozie Onyemaechi is an Abuja-based economist with expertise in public-private partnership, low-income housing and urban developement. In this interview with TUNDE BUSARI, he stresses the need for government to focus its housing scheme on low income earninig section of the population. Excerpt:

The minister of finance said recently that Nigeria has 17million housing deficit. How can we tackle this problem?

Very good. First we need to prioritise shelter as a basic need of man, like food and clothing. Then we need to create a space for the poor in our national housing policies and programmes. Over 80 per cent of the housing deficit figure you gave is within the low-income in the informal sector.  That is , the market woman, traders, okada rider, taxi driver, gatemen, low cadre civil servants, etc. We need to recognise by our actions that this category of income earners and citizens have right to basic shelter and they will need assistance to achieve this basic need. So, the impact of  any housing policy and prgramme that is not focused on enhancing access to housing for the low-income in the infomal sector  will  be minimal.

To focus on the low-income in the informal sector, the government will need to create a special pro-poor housing program aimed at enhancing access to housing for the low-income, the urban poor and those at the bottom of the income ladder. One of the leading objectives of that housing programme will be to enhance access to affordable housing for the bottom 40 per cent of our population.

What will this require?

This will require  enhancing access to housing finance for the focussed group and that is the crux of the matter. The structure of funding available for housing  development in Nigeria  has not provided a comfortable space to accomodate  the low-income and urban poor in the informal sector . As a result of this elitist and commercial  centered funding structure, affordability to the focused group is not guranteed . The Nigerian affordable housing market is the informal housing market, the self-built, meaning that if the low-income earners have  good access to a suitable housing finance, they can achieve housing with minimal help.

The only feasible solution is to bridge the  gap with appropriate framework and suitable funding . You know the government may not fund that sector adeqautely due to budget constraint and competing needs, that is why they embarked on PPP. Unfortunately, the low-income informal sector is  not attractive to the private commercial sector due to the many informalities associated to the sector in Nigeria.

Does that mean end of the road?

There is  a promising framework that has capacity to overcome these challenges and achieve the desired result within a record time.  The new  framework proposes  to effectively and efficiently  coordinate and  harness the huge  opportunities in the third sector to raise equity-based fund that will serve as a lending basket  to intervene directly in the informal sector.  The framework has presented a  workable  criterion suitable for administering housing finance for the low-income in the infromal sector and even provided a kind of a “way out”  to some of  the long standing inhibitors created by the Land Use Act.

What is the issue with students’ hostel accommodation and how can we address it?

This is an area of great concern, the contradiction is that we  expect to have outstanding professionals, great doctors, distingushed scientists  from our universities and other institutions of higher learning whereas we house the students  in poor environments that can  only promote criminality. Students from lower income backgrounds, unable to afford the high cost of decent apartments, now squat in shanty towns and indecent environments that are grossly unbefitting to undergraduates and the nation’s upcoming leaders. In many institutions, the acute shortage of decent hostels, where less than 40 per cent of the student population are catered for, has led to overcrowding, squatting and bunking that has made life and living herculean for students. Hence, our bright minds are  degenerating into cultism, drug abuse, fraud, robbery, kidnapping and other nefarious criminalities. A leading university administrator  once  said  that “only animals can survive in some of the hostels in our higher education institutions”. This is not so elsewhere, even in many  African countries such as Ghana, Kenya, Uganda, etc .  The issues are similar to those responsible for low income housing deficit, hence there is need for a policy change. However, let us  not lament on the problem,  I am happy the “Build for Nigeria” model is set to address this issue adequately.

So What happened to government housing policies over the years, how did we get here?

Over the years the federal government has focused its housing policies on the formal sector with little or nothing for the informal sector. Nobody has account of where the poor live and toil daily. Both the government-led aproach to housing and the current private sector-led approach to housing delivery have neglected the poor and low income earners. And where are these people found? In the informal sector, of course. Focusing on the poorer groups  will drive policy change that will enhance access to housing finance, access to land for housing, approvals, etc. This is the same with students’ hostel. A focus on affordability to indigent students at public tertiary institutions will be the way to go.

What is the role of the private sector in all of these?

Very good.  I will talk about the role of the private developer and then the Nigerian private sector. The role of private developer under the PPP framework operated by federal and state housing agencies as of today is basically to bring in  finance for the project and deploy expertise to construct the houses. Of course they will participate in the sale of the completed houses. This is why PPP is yet to make significant impact in delivering  affordable housing for low income earners. There are inadequacies in the policy framework, institutional framework, legal framework and financial framework. Let us leave that for another day. You know Nigeria is yet to articulate a housing PPP-specific national policy to regulate the practice at both federal and state levels. For now, each housing agency  has its own PPP housing guideline and sometimes with the help of the ICRC which is the custodian of the national policy on PPP, the agencies manage to move on. Such loopholes will allow people who  have wrong motives to take advantage of the system. That is why experts are happy with the new framework; not only does it address the  existing inadequacies, it introduces  a multi-party PPP system which  was identified as the leading success factor for PPP in low income housing projects in  countries like India and Malaysia. For instance, under the “Build for Nigeria” pro-poor PPP housing  model, the private developer is to deploy expertise to build the houses while the funding is provided by the third sector.  Now,  for the Nigerian private sector, housing provision should not be left for the government alone. If there should be an urban housing crisis in Nigeria tomorrow, everyone suffers, the people, the government and businesses suffer.  The growing inequality in Nigeria  calls for concern of everyone. In some countries like USA,UK and even South Africa, there are laws ensuring that the operations of the private sector promotes economic equality.

What about the international  institutions?

The same goes for international institutions and friends f Nigeria. We all have a stake here for today and tomorrow. Again, this is why I like the new framework, it is a clarion call to build for Nigeria. That call is for everybody; individuals, philantropists, foundations, multinationals, private firms, banks, telecoms, churches, mosques, NGOs, global mandate agencies and the international community to build for Nigeria.