The Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa, proposes a 20-30% cross-subsidization model for housing estate funding to make homeownership more accessible to low-income Nigerians.
This strategy seeks to reduce financial barriers for low-income families while ensuring the construction of affordable and high-quality housing across the country.
Pushing for Innovative Housing Solutions
During a session with the House of Representatives Committee on Housing and Habitat, Arc. Dangiwa emphasizes the effectiveness of cross-subsidization. He references Algeria’s success, where one million homes were delivered in a year using a similar approach.
“Whenever we are funding any estate to be developed, 20 to 30 percent of the funding should be cross-subsidized,” Dangiwa states.
The Minister explains that this model ensures consistent external features and infrastructure across housing estates, with variations in internal finishes—such as flooring and fittings—to match different affordability levels. He believes this approach will make housing more inclusive and accessible.
Strengthening Housing Sector Reforms
Dangiwa also underscores the significance of the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) in transforming the housing sector. He commends Finance Minister Wale Edun for securing Federal Executive Council approval for the initiative.
Additionally, the Minister addresses the restrictive impact of the Central Bank of Nigeria’s (CBN) Single Obligor Limit on the Federal Mortgage Bank of Nigeria (FMBN). He explains that this cap has limited the bank’s capacity to fund primary mortgage institutions (PMIs), thereby reducing access to affordable mortgages for Nigerians.
He applauds the House Committee on Housing and Habitat for its intervention to suspend the limit, enabling the government to improve mortgage availability. He also calls for FMBN’s recapitalization to strengthen its ability to independently generate funds for affordable mortgages and advocates increased support for the Federal Housing Authority (FHA) to tackle the growing housing deficit.
Renewed Hope Housing Programme and Cross-Subsidy
The Federal Government’s Renewed Hope Cities and Estates Programme incorporates the cross-subsidization model to deliver affordable housing across the nation. The first phase targets 50,000 housing units, with projects in each geopolitical zone, the Federal Capital Territory, and 30 additional states.
Under this initiative, 80% of units will be sold at commercial rates, while 20% will be offered at subsidized rates to low- and middle-income Nigerians, including members of labor unions like the Nigeria Labour Congress and the Trade Union Congress. Proceeds from the commercial sales will subsidize the concessional units, promoting homeownership among underserved groups.
Currently, 14 active sites are under development nationwide, comprising 10,112 housing units, with 250 units in 12 states.
These initiatives reflect the government’s commitment to addressing Nigeria’s housing challenges through innovative funding models and inclusive policies, ensuring more Nigerians can achieve affordable homeownership.
