Mr Wale Edun
FG’s N1 trn mortgage capital to close urban housing gaps
Sopuruchi Onwuka
The moves by the federal government to raise a trillion Naira in capital for the construction industry is conceived revive mortgage banking and arrest the worsening housing crises that beset urban dwellers in the country.
Finance Minister, Wale Edun, told reporters at the weekend that federal government would raise the fund by a combination of external and internal borrowing, emphasizing, however, that whereas the external component of the loan would come with one percent interest rate, the mortgage products would attract higher single digit or lower double digit interest rates.
Major part of the external loan, he said, would come from the International Development Association (IDA), a unit of the World Bank; while the internal funding would be pulled from the domestic money market where interest rate is very high.
The Oracle Today reports that housing crisis dominates the list of many challenges that confront Nigerian households in the face of worsening economic conditions manifesting as high food prices, rising energy costs, and high cost of transport.
Since the current administration of the federal government come to office, economic support policies targeted at protecting the common man from market storms have been pulled down, triggering hyper-inflation in the country and pushing local interest rates to very high double digit levels.
Inflation which peaked at 34.80 percent in January, 2025 has led to unaffordable prices across the board with strong knock-on effect in the rental market, especially in the country’s big cities like Lagos where rents have jumped by over 50 percent in the past two years in relation to parallel rise in the costs of building materials.
A report on Nigeria’s housing crisis shows that 80 percent of the country’s over 200 million population spends over 50 percent of their income on rented accommodation. Various official estimates put Nigeria’s housing deficit at about 22 million. And homeownership level is estimated at 25 percent of the population.
It is also estimated that only 5 percent of the country’s total housing stock of 42 million units are in formal mortgages. Economists count housing units outside the mortgage circles as unbankable assets.
The mortgage programme which the minister said would soon be launched would also activate a boom in the construction industry, boost employment, and enhance domestic economic productivity.
Wale Edun said government has taken out a 40-year loan from the World Bank’s IDA at an interest rate of 1% in the first phase of fundraising. The external debt, he explained, would be matched by private sector funding from pension funds and banks for a N250 billion debt.
The mortgages, he explained would be available at “single-digit or low double-digit interest rates” for around 25 years.
The revival of mortgage facilities in the country, The Oracle Today reports, would be a sharp departure from the prevailing trends in the property market where only the super rich play; mainly because the available credit facilities in the money market are short term and at high interest rates.
As a result, mortgage lending constitutes a small portion of the domestic property market as most property is bought in cash by the rich.
