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Nigeria: Meeting the housing needs of Africa's most populous country

Demand for new affordable housing in Nigeria is huge. The West African country's population grew at a rate of 2.8 per cent between 2010 and 2014, at a time when the likes of the UK and US saw increases of just 0.6 and 0.7 per cent respectively. 

World Bank estimates suggest Nigeria is facing a 17 million unit housing deficit that will require investment of almost $85 billion to resolve, representing a huge opportunity for the construction sector and allied fields, such as building materials.

How Nigeria aims to build more low-cost homes

Nigeria's government is turning to public-private partnerships in order to tackle its sizeable housing shortfall. 

One such partnership - partly financed by the Federal Mortgage Bank of Nigeria - will see the Trade Union Congress (TUC), First City Monument Bank and Rock of Ages Properties build 100,000 housing units for TUC members across the country.

Another will see France-based industrial giant Lafarge team up with the Federal Ministry of Lands, Housing and Urban Development to significantly increase the availability of low-cost housing throughout Nigeria.

Speaking at a recent industry event in the country, Lafarge Africa managing director and chief executive Guillaume Roux outlined the company's plans to enable access to affordable, decent quality housing for 300,000 Nigerian citizens by 2020. 

The move comes as part of Lafarge's global plan to provide homes for two million people in the low-income segment over the next five years. Mr Roux explained that the firm's approach to affordable housing is based around unique and comprehensive solutions that meet the needs of low-income residents the world over, from the informal settlements of Brazil and India to the rapidly growing peri-urban communities of Nigeria.

Discussing the company's work with Nigeria's federal government, he said Lafarge is currently developing 500 houses in Abuja, teaming up directly with contractors and urban designers and providing them with access to the best technology in a bid to speed up and improve the quality of affordable housing construction.

"We are also involved in the project management of the development to ensure transparency for all funds," he was quoted by Business Day as saying. 

"The delivery of the units will also be closely linked to the involvement of one or several national mortgage institutions."

Opening up access to housing

Of course, affordable housing is only truly affordable if people are able to access the finance they need to buy those homes. 

To that end, the state-backed Nigeria Mortgage Refinance Company (NMRC) has unveiled plans to sell $2.2 billion of bonds in order to make housing funds available to more people, reports Bloomberg. Existing mortgages that meet certain underwriting requirements will be refinanced using the 15-year bonds, explained NMRC chief executive Charles Inyangete.

According to Mr Inyangete, Nigeria - the largest economy and most populous country in Africa - will require annual investment of more than $17 billion if it is to build the 780,000 housing units per year required to meet the rising demand.

Opportunities for building materials suppliers

Clearly, the huge volume of housing units required over the coming years presents a significant opportunity to the building materials trade - including overseas firms looking to sell products that are in short supply within the Nigerian market. In 2012, Nigeria imported $126 million of glazed ceramics, $96.7 million of unglazed ceramics and $47.3 million of building stones, according to the MIT-backed Observatory of Economic Complexity.

NMRC figures show that Nigeria's property market is already valued at $41 billion - equivalent to around eight per cent of the country's GDP. Mr Inyangete revealed that through extending maturities for Nigerian home buyers to as long as 20 years, the NMRC believes the current value could more than triple.

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