Fittings for Nigeria’s Affordable Housing Project will be produced locally, not imported – Fashola

Full text of Minister of Power, Works and Housing’s speech at the Affordable Housing Summit

Ladies and gentlemen, as we commence this Summit in Affordable Housing, it is my ­bounden pleasure to present the keynote address to flag off the sessions that will examine issues such as:

A) Easy access to land for sustainable delivery of affordable housing.

B) Capital market access to finance for affordable housing.

C) Concessions and incentives as ­­­­­tools to galvanize affordable housing.

D) Focus on the off-taker as a paradigm shift in affordable housing.

E) Skill development and technology for affordable housing delivery.

Let me be clear that before I joined this Ministry in November 2016, there was a National Housing Policy of 2012 aimed at providing affordable housing for Nigerians.

But the question we have been asking ourselves as a Ministry since my resumption are questions such as:

A) What type of housing?

B) What is the definition of affordability? and

C) Which cadre of Nigerians need Government assisted housing and which cadre should we start with, and furthermore, what type of housing do they need?

The answers to these questions are not easy.

They require extensive research and surveys, some of which we have commenced and concluded, and some of which we are still undertaking.

They speak to some of the thematic issues that this summit will address such as off-taker focus, skill development and technology.

The questions have compelled us in the Ministry to review some of our methods for implementing the National Housing Policy, such as initiatives by the Federal Housing Authority and our PPP initiatives, through Development Lease Agreements (DLAs).

The results do not convince us that this is the only way to continue.

While we may retain the initiatives with modifications, we must develop something new and different that is useful for reducing our housing deficit.

This will help to diversify our economy, grow our SME and local capacity, evolve into something that is sustainable in the sense that the majority of Nigerians can benefit from, by getting them on the housing ladder, and alsbenefit any of them employed in the process.

Our internal reappraisal reveals that since inception, FHA has built about 40,000 housing units in approximately 40 years.

Our DLAs and PPPs over a decade, under the Construction Finance Initiative, targets delivery of 21,008 housing units with a current delivery r of 2,750 completed units so far.

Our appraisal shows different designs of houses originated by different contractors that do not necessarily accord with the market needs and are therefore not attractive or affordable by the off-taking public.

Our appraisal of previous successful housing initiatives show also that they were limited in national acceptability because the single design concept did not take our cultural diversity into consideration.

Quite aside from our reviews, emerging contemporary issues of Climate change, energy conservation necessities and collaboration with our development partners such as German Development Corporation (GIZ) necessitate that our building habits and methods must change, for energy efficiency and sustainability.

Working with GIZ, we have developed guidelines for energy efficiency in our buildings which we launched on June 16, 2016.

In response the need to change the way things were done in the past, we have produced some inspiring results, for which all our civil servants must take credit and a lot of self-pride for being the solution providers.

We have reduced possibility of hundreds of different designs in a year to 12 (twelve). [Discuss]

We propose to choose 6 (SIX) designs of One bedroom, Two-bedroom, Three-bedroom flats, Bungalows and Condominiums that will represent the Nigerian House which responds to our cultural diversity.

We have standardized fittings such as doors, windows, tiles, roof boards and other accessories to be produced by the local manufacturers as our support for local industries SMEs and in pursuit of diversification and job creation.

We will start with the traditional methods of construction known to our people so that bricklayers, painters, welders, carpenters and other artisans can find opportunities for inclusion and employment.

This is consistent in my view with the skill development theme of this summit. [CREATE THE ECONOMY]

We will not stop there.

We are mindful that the current methods of building are slow.

We need to produce enmasse to reduce the housing deficit.

We plan to embrace technology, by developing quicker methods of building and training our people to adapt and adopt them. (Discuss)

We have finalized the Bill of Quantities for the designs. This, to me, is where the test of affordability is most acute.

What is the definition of affordability?
What is an affordable home?

These are some of the questions that I expect this summit and our experts will TRUTHFULLY and HONESTLY answer, so that we can share it with our teeming and expectant public.

We are targeting to build for people within the income bracket of those in Level 10 to 15/16 in the public service and those in the private sector such as drivers, farmers, market men and women, artisans and so on, who earn this kind of income.

When I asked some of our foreign experts to define affordable housing for me at our last symposium at the Shelter Afrique AGM, they came up with two examples:

A) A 47 m², two-bedroom bungalow with external toilets, to be shared with others, at $5000 in Haiti (1.4 million naira with exchange rates of 280 naira = $1.00); is this what we should do?

B) The other example was to prescribe a mortgage of at least 10 to 15 years, with single digit interest and to ensure that the beneficiary must not spend more than 30% of his income on housing, so that he or she can meet other needs of dependents.

This makes more sense to me.

It accords with global best practice, mortgages are the way to go in order to reduce corruption and encourage productivity.

Our housing must be tied to our income, which must be tied to our jobs.

It is the way to create credit that our housing industry desperately needs.

We cannot speak of national transparency if a large number of our people pay one or two years advance rent, when they receive salaries in arrears monthly.

This is one of the reasons why many houses are empty, because of the advanced payment, and not only because of the huge rate of rent.

Is affordability the same thing as low-cost housing?

Is there such a thing as low-cost housing without low cost cement, low cost land, low cost paint, low cost iron rods and other low cost imports?

I hope the session on affordability will answer this question so that we can HONESTLY and TRUTHFULLY advise our people and manage their expectations.

Ladies and gentlemen, with land under the control of states, the Federal Government can only do so much.

Lead the way, evolve design, prove the concept, support SMEs to produce materials locally and provide incentives that will enable the private sector play more actively through the capital market and other funding sources.

I have news for you. This Is where we are heading.

With the standardization of design, and standardization of accessories, the first big step has been taken by ­­the Federal Government.

The Ministry of Finance will act as our consultant for deepening access to capital for housing construction and supply, and also the financing of acquisition.

The Honorable Minister of Finance and I have had several engagements along this line and we met again as recently as Friday 23rd of June 2016 to discuss this and other matters.

When all is finally done, we expect to see a private sector involvement that builds to an agreed national design, and a Federal Government that can utilize incentives, fiscal policies to guarantee off-take, and supply to citizens on a mortgage finance.

Ladies and gentlemen, except for the collaboration of our partners that I mentioned, and the volunteering support of a Nigerian consortium of architects and planners led by Architect Bayo Odunlami, all of what we have done by way of design, planning, costing and more has been done by our staff in the housing sector of the Ministry of Power, Works and Housing.

For this I am grateful to be Honorable Minister of State, Mustapha Baba Shehuri, the Permanent Secretary, Works and Housing, Engineer Abubakar Magaji, and the various Directors in the Works and Housing sectors.

I wish you all very engaging and thoughtful deliberations, and look forward to very fruitful outcomes and recommendations.

Thank you for listening.

Babatunde Raji Fashola, SAN

Honourable Minister of Power, Works and Housing

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