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Affordable housing in Nigeria: a $300 billion market opportunity

There is a $300 billion potential market opportunity in providing affordable housing in Nigeria, according to a joint presentation by a German national agency for international development and a major international housebuilder.

Delivered at the AfricaBuild Lagos exhibition by GIZ (the German Orgainisation for International Cooperation, a publically-owned company involved in international development) alongside the non-profit Fuller Centre for Housing, the presentation analyses the market forces driving the need for large-scale housebuilding in Nigeria. The housing deficit in Africa’s largest economy already stands at 17 million units, and this will have reached well over 20 million in five years’ time. This means that 2.6 million homes will need to be built each year.

However, this shortfall is not being met. Most of the attention on Nigeria’s construction industry has been on the luxury property market, as both the numbers and wealth of Nigeria’s top-end buyers are increasing. But with the focus on top-end developments like the Eko Atlantic City project, large-scale housing supply for most of Nigeria's 173 million people is not moving at the rate it should. Despite the increase in living standards 90% of Nigerians are still classified as below moddile income level, the majority with no access to mortgage finance, so providing truly affordable housing is a national priority.

It is not just new houses that Nigeria needs – poor quality existing units are in desperate need of upgrading. GIZ and the Fuller Centre state that two third of Nigeria’s population live in substandard accommodation, mainly due to overcrowding, poor sanitation, and unsafe construction techniques. Addressing this will require further investment, new materials, and participation from international suppliers, builders and finance providers.

Of course, this means a massive market opportunity, and not just due to the numbers involved. 90% of construction components in Nigeria are imported, and there is a need for alternative building materials that are safer and more energy-efficient. Many foreign companies and associations are already getting involved to bring the housing deficit down, as the presentation outlines – particularly suppliers of modular and self-build construction, given the sheer amount of new units needed.

View the presentation here to get a full picture of where the opportunities in Nigeria lie.


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