In the recently published Economic Recovery and Growth Plan for Nigeria (2017 – 2020), the Ministry of Budget and Planning explained that the construction and real estate sectors are constrained by the high costs associated with house building, land acquisition and borrowing.
The Ministry rightly outlined that social housing programmes had the ability to partly mitigate these constraints, stimulate general economic conditions and create a large number of jobs. As such, policy objectives as well as a strategy for the construction and real estate sectors were proposed in the document.
The major policy objectives for the construction and real estate sector as outlined by the document from 2017 – 2020 are to:
- Overcome critical constraints in the construction and real estate sectors
- Increase the availability of financing for the construction industry
- Invest in technical and vocational training for craftsmen (electricians, masons, carpenters, etc.) needed by the local industry
The pioneering strategy to achieve these objectives will be to ‘Stimulate construction by building affordable housing’. The key activities within this strategy are shown below:
- Construct 2,700 housing units in the short-term to create 105,000 direct jobs a year and gradually increase to 10,000 housing units per annum by 2020; construct 20,000 pilot social housing units
- Reposition the Federal Mortgage Bank of Nigeria by recapitalizing it from N2.5 billion to N500 billion to meet the housing needs across Nigeria
- Construct 12 new Federal secretariat complexes in the States where none exist and complete rehabilitation of the existing 23 secretariats
- Improve access to finance for the construction industry, e.g., by fast-tracking implementation of the proposed Family Homes Fund, to build 2 million housing units by 2020
- Work with State governments to invest in vocational and technical training centres to develop skills for local craftsmen
Team leads for the projects are the:
- Ministry of Power, Works and Housing
- Federal Mortgage Bank of Nigeria
- Ministry of Finance
- Ministry of Labour and Employment
- Ministry of Federal Capital Territory
With this strategy, the Ministry of Budget and Planning expects the construction and real estate sectors to grow 5.39% annually (on average) from 2017 to 2020.
Download the document on the Real Estate Research Report Centre.