The tip of the Makoko Iceberg: understanding Nigeria's housing deficit

If we take the average household size as 5 persons, and  assume that the often quoted figure for Nigeria's housing deficit of 17 million units is correct, then about 85 million Nigerians either do not have homes or live in sub-standard informal housing. To put it graphically, If Nigeria's housing deficit was represented by Makoko, it's size will probably cover most of southern Nigeria. 



Nigeria's housing deficit if not evenly distributed across economic strata; the reality is a pyramid of sorts with the deficit concentrated at the bottom of the pyramid populated by the poor.


It is generally accepted that people in the upper class already have housing, a lot even have multiple houses in several locations around the country. Only about 32% of the middle class  own homes most of which were built incrementally. The lower income classes however, are typically the ones without homes or living in substandard housing in slums. The upper and middle class mostly only know this deficit through the media, and the irritating slums they see in their daily commutes and activities…it is really in the lower class that the deficit crisis exists.


Recently, the Federal Government of Nigeria signed an MOU to construct 10,000 homes in an ongoing bid to cut this deficit. While this is commendable, it is has to be acknowledged that it is a small effort (0.005% of the gap), akin to trying to reach the top of a skyscraper by standing on a stool. Even at that, the real question is, would this housing be affordable to the 112 million Nigerians living under the seemingly concrete ceiling that the poverty line represents?


There is a lot of vacant housing within the Abuja metropolis for example, and probably even more within the very upscale areas of Lagos, where a 74% vacancy rate was recently reported.


Clearly therefore, the bigger issue is the poor matching of supply to demand. The housing in supply is for middle to upper income people, while the actual demand is in housing for the bottom of the pyramid. While, the MOU signed by the FG includes a plan to provide access to mortgages for Nigerians across the country, it remains to be seen whether mortgages will be priced in a way as to be affordable to those at the bottom of the pyramid with their low and irregular wages.


If we have to develop housing to reduce the housing deficit efficiently, what needs to be done is to come up with ways to finance housing for the 112 million Nigerians at the bottom of the pyramid in such a way that they can even afford decent housing on their less than $2 a day income.


At CoBuildIT, we are committed in the medium term to designing and developing building technology to deliver decent 2 bed houses at $2000, and we are looking to link arms with others who share this passion.