Addressing the Nigerian Housing Shortage Through Foreign Direct Investment

ESV Lucky Ndimele,

One of the problems militating against Nigerian economic growth and development is the acute shortage of housing across all regions of the country.  The construction of new houses, particularly affordable housing units to bridge the continued wide gap is a housing solution this current government of President Bola Ahmed Tinubu must urgently consider.  By focusing on this important economic agenda, the government can provide shelter for low-income Nigerians, individuals, and families who are in dire need of affordable housing. This, no doubt remains one of the best ways the current government can actually drive home the dividends of democracy to low-income Nigerians, and by extension improve their quality of life.

To address the Nigerian housing challenge, there are a lot of policies to be used, and one of them by wooing foreign investors (multinational companies) to invest heavily in the Nigerian housing markets. At present, the Nigerian housing deficit is put at 17 million units. With this huge deficit, it is crystal clear that the government alone cannot bridge the wide gap. Making the Nigerian economy receptive to foreign investors through Foreign Direct Investment (FDI) is a task the current government must undertake and execute effectively to the benefit of Nigeria and Nigerians. According to available statistics from the Federal Mortgage Bank (FMB) of Nigeria, about N59.5 trillion is required to bridge this gap.

In a very simple definition, FDI is a cross-border investment from multinational companies to another country. In most cases, it is both the transfer and investment of human and monetary values to another country. Even as fragile as the Nigerian economy may be, there are still many multinational corporations that a thriving repatriating gains to their home countries in the form of capital flights.

One key sector that is in dire need of FDI today in Nigeria is the entire real estate ecosystem. When this is done, using the right economic policies to drive the entire process, there would be unprecedented economic growth and development. Investing in real estate and housing projects will not only bridge the housing deficits, it will create jobs, and stimulate economic growth in the Nigerian economy.  To achieve this, FDI is required to ensure the availability of funds and expertise that will complement the Nigerian local content in terms of capital flow and competent human resources in the real estate sector.

Massive housing development in the urban and rural areas will definitely lead to uncommon urban development because this will necessitate the development of infrastructures like roads, electricity, and water supply, amongst others.

All these policies of wooing foreign investors are dependent on the creation of a congenial macroeconomic environment by the Nigerian government for real estate businesses to thrive. Even when foreign investments are welcomed in the real estate sector of the Nigerian economy, there is every need to redefine the Nigerian mortgage financing system to guarantee access to readily and affordable financing options.

The onus is on the current government to develop policies that will engender the much-needed investment in the real estate sector, and the FDI is a viable option to adequately explore in this regard as bridging the Nigerian housing deficit will bring about economic growth and development and impact the lives of Nigerians.

ESV Lucky Ndimele, a registered Estate Surveyor and Valuer, and the principal partner at Lucky Ndimele & Company, a leading Nigerian firm of Estate Surveyor and Valuers.