Rent is one of the major economic pressure points for Nigerians as the country battles inflation caused in part by unprecedented global disruptions. Though disputed and subject to recent controversy, some statistics peg housing deficits in the country at 28 million. The issue is more pertinent in states like Lagos, the most preferred destination of internal migrants in search of economic opportunities and a lifeline.
A major cause of the housing deficit is the misalignment in housing investments and population growth. According to the National Population Commission, Nigeria’s population growth rate surged to 3.2 percent per annum in 2023, and the country is projected to become the third most populated country in the world by 2050. Housing construction has failed to meet this surge, causing a shortage that results in rent spikes in major urban centers where Nigerians flock to in search of wealth.
Some blame this on corruption in the civil service, which frustrates the construction process through manipulations in the allocation of lands and issuance of building permits.
In search of a solution, the idea of monthly rentals has been repeatedly mooted. Senator Ned Nwoko, representing Delta North, proposed a ‘one-month limitation’ rent Bill in January in support of the idea. Furthermore, in the tech startup scene, various outfits have sprung up to offer monthly rent payment to Nigerians by paying upfront and charging interest to successful applicants. However, this is only appealing and available to a fraction of Nigerians with the credit score and earning power to meet the often stringent requirements of the startups.
In a recent interview, a prominent figure in Nigeria’s real estate sector, Chief Olusegun Bamgbade, the Chairman of H.O.B. Housing Estates, made a case for monthly rental, describing it as a sustainable financial plan for tenants and landlords.
“The idea of yearly rent is burdensome to tenants. Raising money for yearly rent is not an easy task. It encourages corrupt practices. It delimits the capability of the tenants in choosing preferred accommodation. It has negative consequences on the financial plan of the tenants,” he said.
However, another stakeholder, Mr. Dotun Bamgbola, a former Chairman of the Lagos branch of the Nigerian Institution of Estate Surveyors and Valuers, said it would be difficult for landlords to adopt the monthly rent payment system.
“Where rental income is the means of recouping investment in property development, it may be difficult to have adequate monthly rental collections to meet up with the cost of funds, especially in the residential houses sub-sector,” he opined in another interview.
Both parties agree, though, that the government must review its current housing policy and increase investments in housing to make it truly affordable, unlike previous efforts, which, though advertised as such, remain inaccessible to a vast majority of Nigerians.
Weeks back, the Housing and Urban Development Minister, Arc Ahmed Dangiwa, announced the president’s approval of N126.5 billion for the delivery of a total of 100,000 houses nationwide in 18 months.
He made the disclosure at the groundbreaking ceremony for 3,112 housing units in Abuja, the Federal Capital Territory, and the launch of Renewed Hope Cities, a housing project of the administration intended to bridge the deficit.
