Low‑income earners in Nigeria are struggling to meet one of humanity’s most basic needs—shelter—because they lack access to finance. The country’s weak mortgage system has rendered housing unaffordable for millions, even though the real‑estate sector contributed 5.64 % to GDP in 2022. To close the 28 million‑unit housing deficit for a population projected to reach 219 million, the federal government would need to spend about N21 trillion. High unemployment, predicted by the Nigerian Economic Summit Group to hit 37 % this year, and low disposable incomes further exacerbate the problem. The minimum wage, recently raised to N30 000 (approximately US $65 at an exchange rate of N460.44 per dollar), is eroded by soaring inflation, which stood at 21.82 % in January. Meanwhile, the central bank’s benchmark interest rate of 17.5 %—maintained to combat inflation—makes mortgage loans prohibitively expensive.
Mortgage banks typically require borrowers to provide at least one‑third of a home’s price or to allocate 33.3 % of their monthly income to loan repayment. For a 30‑year mortgage, a prospective homeowner might need to pay roughly N10 000 per month, depending on the property type. However, long‑term financing is scarce; most banks offer only short‑term loans because price instability prevents the issuance of 30‑year mortgages. Consequently, many Nigerians cannot afford the limited short‑term financing available, contributing to the nation’s massive housing deficit. Mortgage lenders are constrained by central‑bank regulations that demand a 15 % capital adequacy ratio and keep non‑performing loans below 5 %, prompting them to be cautious about the projects they fund.
Stakeholders in the built environment have voiced concern over Nigeria’s ineffective mortgage system. Toye Eniola, Executive Secretary of the Association of Housing Corporations of Nigeria, described the system as “crawling” and highlighted the poor implementation of enabling laws. He noted that most mortgage banks rely on funding from the Federal Mortgage Bank, which cannot meet all demand, and called for a robust funding structure and a foreclosure law to deter fraud and attract investment. Land surveyor Demola Isaacs echoed this sentiment, criticizing the system for favoring a few and neglecting affordable housing. Former President of the Association of Town Planning Consultants of Nigeria, Moses Ogunleye, argued that even a strengthened mortgage framework would be ineffective without higher earnings, as mortgages currently benefit only the wealthy. Lami Ayuba, Chairperson of the Association of Women Town Planners (FCT Chapter), questioned the government’s targeting, noting that most people in need of shelter are low‑paid civil servants or petty traders.
Mortgage bankers also condemned the system. Bukola Jegede labeled it “non‑existent,” pointing out double‑digit interest rates of 28–30 % for private mortgages, compared with a modest 6 % from federal institutions. She explained that most lenders offer only five‑year loans, seeking rapid repayment. Nnaemeka Omeh identified high interest rates and a flawed securitisation process as major obstacles, proposing drastic rate reductions and linking mortgages to salary accounts for better monitoring, akin to pension schemes. Jegede further argued that the government has over‑regulated the industry while neglecting essential oversight.
The Managing Partner of Fonahanmi Idris & Associates attributed the challenges to financial incapacity and liquidity constraints. He observed that mortgage banks, including the Federal Mortgage Bank, lack sufficient long‑term funds and often face collateral issues, such as disputed titles. He urged the incoming government to implement recommended reforms, such as channeling unclaimed dividends into mortgage financing and creating securities‑exchange‑commission‑backed products for long‑term capital. Improving land accessibility—through cooperatives, institutions, and private entities—and decentralising land administration could reduce fraud by developers and streamline acquisition.
Finally, Dr Kolade Adepoju, CEO of Riel Homes, identified corruption as a primary barrier to mortgage accessibility. He emphasized the need for public awareness about available mortgage options and for the government to ensure that loans reach the intended beneficiaries, thereby narrowing the housing affordability gap.
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