PPP: A Failed Initiative At Affordable Housing | Independent Newspapers Limited
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PPP: A Failed Initiative At Affordable Housing

Posted: Jul 13, 2015 at 12:01 am   /   by   /   comments (0)

By Nkasiobi Oluikpe,  Lagos

The Public Private Partnership (PPP) in housing provision started in Nigeria in the early 90s, after the 1991 National Housing Policy, which supported and promoted private sector participation in housing provision. This is also backed up by the fact that various other policies and programmes of government at providing accommodation at affordable cost for its citizenry have failed woefully. Since government was not able to provide the needed fund for housing, it sought the support of the private sector.

MortgageWith the growing urban population, getting the Organised Private Sector (OPS) to key into the PPP initiative by way of providing fund to improve housing delivery became necessary. The major PPPs was said to have started in Abuja with infrastructures and later housing in the year 2000. This gave birth to the Mass Housing Scheme (MHS).

The main objective of the MHS was to provide adequate and affordable housing accommodation for the low and medium income group who all the while has been sidelined from home ownership as the cost of housing rose far beyond their means of livelihood. The high income earners were never in the picture of the MHS, they weren’t the people for whom the initiative was conceptualised. With or without government intervention/housing scheme, the high income group is well quartered.

With the PPP initiative, government provides the land at highly subsidised cost and makes available some basic infrastructures while the OPS were to source for funds from any financial institution to enable them erect structures on the lands provided. The estates to be constructed by the OPS were to be at affordable cost targeted at the low and middle income groups. The OPS were also to provide the tertiary infrastructures. Government was also to provide the specifics and of course, regulate the processes.

Speaking on the PPP initiative in August, 2013, the then minister of Lands, Housing and Urban Development, Ms Ama Pepple said: “My priority is the provision of affordable mass housing on a large and unprecedented scale for every Nigerian including those in the low income and no income groups. In doing this, we shall give priority attention to slum upgrading, completion of abandoned housing projects, new towns development, cooperative housing, urban regeneration, rental housing and site and service.”

The ministry entered an agreement with eight states, namely Kaduna, Gombe, Cross River, Ogun, Anambra, Bayelsa and Lagos on the provision of 6, 000 housing units. Reports by Paul Onuoha, the then Director of Press and Public Relation of the Ministry of Lands, Housing and Urban Development, had it that the ministry allocated 889.19 hectares of land to 92 private developers under the PPP scheme aimed at providing 17, 767 housing units, using new types of technologies. In addition, the ministry also collaborated with Shelter Afrique for the grant of a US $100 million credit facility to support housing development in Nigeria through the Federal Mortgage bank of Nigeria.

Ironically, till date, glaring evidence show that the people for whom the scheme was targeted (low/middle income) have ended up being totally disenfranchised from the scheme as several years after its introduction, there has not been any positive impact in addressing their housing situation; implying that the objectives have been defeated.

The housing units provided by the government/OPS joint venture in Abuja were nowhere closer to the reach of the low/middle income groups with the minimum wage of N18, 000. One of the reasons adduced to the failure of the partnership was that a huge chunk of the land were allocated to foreign companies and well placed domestic companies with significant financial strength who were also engaged in various other projects in Abuja such as road construction and water supply; people who were out to maximize their profit without the interest of the masses at heart.

According to the April 2014 edition of the American International Journal of Contemporary Research, 35,659 housing units initially produced by sampled developers in Abuja were unaffordable to most of the people in Abuja as they were high end housing, without consideration to the social economic condition of the masses.

Depending on the unit type and location, the cost of the houses were put as follow: two bedroom semi-detached bungalows sold for between  N15 to ?19 million, three bedroom detached bungalows for ?20 to ?28 million, while four bedroom detached bungalows were sold for ?25 to ?32 million. Five bedroom bungalows were sold for ?68 million and above.

Though developers decried lack of infrastructure; high cost of building materials and disbursement of funds from mortgage and commercial banks as the reason behind the high cost of the housing units; cynics of the government/OPS joint venture have been asking series of questions such as, if at all the PPP indeed had the low/middle income group at heart before embarking on the partnership, even with the implementation of the National Housing Fund, which is fraught with controversies; didn’t government conduct the necessary research to determine whether or not the low/middle income would be able to afford what the partnership would be providing, considering the N18, 000 minimum wage which is yet to be implemented by most states of the federation; and why is it that policies and programmes that work in other climes, do not work in Nigeria?

It should be noted that PPP programme is said to be championed by the World Bank and the United Nations Centre for Human Settlements (UNCHS) and widely accepted as a framework for resolving the needs/demand gap in the provision of shelter.  The questions many are asking is, if Nigeria is different from other countries, considering that long after the adoption of the PPP programme, no significant impact has been made to improve the housing need of the low/middle income group. On the contrary, the same high income group ends up grabbing the housing units whose construction was mooted for the low income group.

Independent Newspapers Limited went to town to seek the views of experts in the built environment on the reasons why the PPP government/OPS joint venture has not achieved the objective for which it was adopted. Next week we will be looking at their various views.