Remarks by The Hon. Minister Of Housing and Urban Development, Arc. Ahmed Musa Dangiwa At The Ground-Breaking Ceremony For 250-Housing Unit Renewed Hope Estate In Ebonyi On Wednesday, June 26, 2024

Protocols
Distinguished Guests, Ladies and Gentlemen,

First, I would like to thank His Excellency, the Executive Governor of Ebonyi State, Rt. Hon. Francis Ogbonna Nwifuru, for honoring our invitation to the groundbreaking of a 250-housing unit Renewed Hope Estate here in Abakiliki, the state’s capital.
Today’s ceremony starts the second leg of a nationwide groundbreaking exercise for housing projects under the Renewed Hope Cities and Estates Programme, which His Excellency, President Bola Ahmed Tinubu, GCFR, launched in February with the commissioning of a 3,112-housing unit in Karsana, Abuja.

Under Phase One of this programme, we plan to deliver a total of 50,000 housing units across Nigeria. This includes 7 Renewed Hope Cities that will have between 500 and 1,000 housing units per site in each of the six geopolitical zones in the country and the FCT, while the Renewed Hope Estates will have 250 units per site in the remaining thirty (30) states.

With this housing programme, we plan to unlock the massive potential of housing development to create jobs, uplift lives, and boost economic development.

As you may recall, last month, following the presidential flag-off, we embarked on the first leg of the exercise with the groundbreaking of 1,500 housing units in the northern part of Nigeria. This includes 250-housing unit Renewed Hope Estates, one in Katsina, Yobe, Gombe, and Sokoto, and a 500-housing unit Renewed Hope City in Kano.

Work is currently ongoing at each of these sites, and our plan is to have them all completed within the next couple of months and made available to Nigerians in line with Mr. President’s desire to provide quality housing for all Nigerians.
This second leg will see us break ground for a total of 2,000 Renewed Hope Housing Units in eight (8) states in the South and North Central regions of our country. This includes 250 housing units each, starting in Ebonyi today, followed by Abia, Akwa Ibom, Delta, Osun, Oyo, Benue, and Nasarawa states.

This Renewed Hope Estate that we are flagging off today comprises 50 units of 1-bedroom semi-detached bungalows, 150 units of 2-bedroom semi-detached bungalows, and 50 units of 3-bedroom semi-detached bungalows.

We have designed these housing units in a way that makes them easy and affordable for people to acquire by using organic designs to allow for future expansion as the income of beneficiaries increases. This means that a 1-bedroom unit can be expanded to 2 bedrooms, and 2-bedroom units can be expanded to 3 bedrooms as the owner’s financial situation improves or their family grows.

As we break ground for this project, I want to charge the developers, Jephthah Global Investments Ltd, Proportion Construction Works Nigeria Limited, Ideal Shelters Limited, and KLYN Construction Works Ltd, to ensure that they build according to specifications. I want to warn in very strong terms that WE WILL NOT TOLERATE SUBSTANDARD WORK. You must be committed to delivering quality work as per the contractual terms to ensure durability.

We also want you to have this work finished within three months so that we can begin the process of getting Ebonyi indigenes to purchase and move in.

We have created different options to enable everyone who has a source of income and livelihood to own these homes when they are completed. These include single-digit mortgage loans that beneficiaries can repay over 30 years and rent-to-own schemes provided by the Federal Mortgage Bank of Nigeria, and outright purchase options for those who can afford to pay upfront.

Statistics show that the construction of one housing unit creates an average of 25 direct and indirect jobs. So, for these 250 housing units that we are building here in Ebonyi, we aim to create jobs for over 6,500 people in various trades, from professionals like architects, civil engineers, and mechanical engineers to masons, plumbers, tilers, and electricians. This is in addition to the economic activities, including those selling food, supplying blocks, and providing building materials. The value chain effect of construction work on this site is significant and creates a positive economic impact.

I want to state that under the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, GCFR, we at the Federal Ministry of Housing and Urban Development are very particular about giving Nigerians value for money. We are diligently funding these projects from the N50 billion 2023 Supplementary Budget that Mr. President approved for the Ministry to ensure sustainability, quality, and geographic spread. I want to assure states that have not been covered under the 2023 Supplementary Budget will be included in the Ministry’s 2024 Budget on the condition that they provide land at no cost to enhance affordability.

At this juncture, I want to appreciate and thank His Excellency, the Executive Governor of Ebonyi State, Rt. Hon. Francis Ogbonna Nwifuru, for promptly granting our request for the provision of land at no cost. This singular action has helped us reduce as much as 30% of the cost of the units in this estate for the benefit of potential homeowners. This is a dividend of responsible governance, and I applaud Your Excellency for this.

Before I close my remarks, I want to thank and appreciate our President for providing the vision and the political will necessary for us to make a difference in terms of delivering decent and quality housing to Nigerians. The groundbreaking ceremonies for these projects demonstrate that Mr. President and indeed the federal government of Nigeria are committed to fulfilling promises and responsibilities to all Nigerians.

Long live Ebonyi and His Excellency, the Executive Governor.
Long live the Federal Republic of Nigeria.
Long live Mr. President.

Opening Remarks by The Hon. Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa At The Ministerial Roundtable Themed: Innovative Financing For Housing Affordability At The SHAFDB AGM Holding At The Marriott Hotel On Wednesday June 12th In Kigali, Rwanda

Protocols

1.    Good morning, Ladies and Gentlemen.

2.    I would like to begin by thanking the Hon. Minister of Finance and Economic Planning for the Republic of Rwanda, Hon. Dr. Uzziel, for her welcoming remarks.

3.    As you are already aware, Africa faces a large and growing housing deficit. This is alongside a disturbing housing affordability crisis affecting over 80% of our populations. The causes are evident: low incomes, a challenging macroeconomic environment, and rising living costs due to high inflationary trends. 

4.    These factors make it increasingly difficult for our citizens to afford decent and quality housing. With each passing year, the affordability bar keeps getting higher. Many households that could afford housing a year ago can no longer do so because of rising cost of building material costs and static incomes.

5.    I am worried about this because I believe that for us to make impact, we must find ways to design, build and facilitate delivery of affordable houses targeting the 80% of the low and medium-income percentile of our population. 

6.    As you may be aware, before my appointment as Minister of Housing and Urban Development, I was the Managing Director of Federal Mortgage Bank of Nigeria (FMBN). During my term, we designed and financed affordable houses, including 1, 2, and 3-bedroom bungalows priced at 4, 6, and 8 million Naira respectively. When I became the Minister of Housing, the first thing I did was to set up a Technical Committee on Affordable housing design comprising Architects and built environment professionals at the Ministry. I tasked them to produce a workable organic design targetting those prices. They did a good job. However, with a 300% increase in building material costs, achieving these price points is now impossible. Now the 1, 2, and 3 bedrooms now cost an average of N8M, N12M and N16M! Meanwhile inflation has sucked out the purchasing power of potential homeowners, making the situation worse. 

7.    This is a serious crisis to housing delivery for us in Nigeria and governments across Africa. For us to move forward and move the needle, we  must have a shift in thinking and approach. We must develop a multi-dimensional strategy to solving it. While we encourage governments to drive policies to fix larger macroeconomic issues, we must also encourage innovative financing strategies to meet immediate needs. This involves creating financing frameworks to enhance individuals' capacity to own homes and lower the cost of finance required to increase supply. Striking this balance is crucial, and it is the question we need to address during this session.

8.    It is against this background that the theme of this Ministerial Roundtable—INNOVATIVE FINANCING FOR HOUSING AFFORDABILITY—is critical. 

9.    In Nigeria, we are using a blend of innovative initiatives to lower the affordability ladder. Firstly, we leverage interest-free budgetary allocations for housing, engage sub-national governments who are custodians of land to provide land free-of charge – as part of their service to their service - to deliver subsidized housing units without incorporating infrastructure. So citizens pay only for the cost of the units built not the infrastructure or land. This collaborative stakeholdger approach absorbs the cost of land, infrastructure and lowers the cost of housing units by as much as 40%.

10.    Additionally, we incorporate organic designs to further reduce the cost of entry for first time homeowners. For example, our houses are designed in such a way that a 1-bedroom house can grow into 2 and 3 bedrooms as the homeowner's income and family size increase.

11.    We have also embraced public-private partnerships (PPP) innovatively. Under PPP, we as government create an enabling environment for reputable developers to secure land and financing to build affordable homes while facilitating bankable offtaker guarantees from government owned housing institutions. Using cross subsidy, 20-30 percent of the housing units built under the PPP are dedicated and made available at subsidized rates to off-takers. For example, under our Renewed Hope Cities and Estates Programme, we signed an MoU with a Consortium of developers to deliver a 100,000 housing units under PPP comprising 1, 2, and 3 bedrooms. Using cross susidy, 20-30% of the units in each location are to be sold to beneficiaries  at subsidized rates, while the remaining are offered at commercial rates to enable the developers recoup their investments at a profit. We have also emphasized offtake options including 30-year mortgage loans at 7% interest rates, rent to own options and outright purchase. 

12.    We are also working with the Ministry of Finance and  a host of other agencies within the housing space including Family Homes Funds Limited, Ministry of Finance Incorporated, the Nigeria Mortgage Refinance Company and the Pension Funds to create a Real Estate Investment Trust. The aim of the Trust is to create a N1Trillion Naira concessional financing window for private sector developers to enable them get low cost funds that would lead to the large scale delivery of houses to Nigerians. The target is to also leverage Pension funds to provide single digit mortgage loans to beneficiaries at a scale that is larger than what we are currently doing using the Federal Mortgage Bank of Nigeria (FMBN). 

13.    What is clear for us in Nigeria and I believe for most of us, is that we must innovate. We must think differently. We must chalenge the status quo and also get our partners to factor our peculiarities in their financing models. 

14.    Traditional financing models have served us to a point. To bridge the housing deficit, we must explore and embrace new financial instruments and mechanisms tailored to our unique contexts. Microfinance, mortgage-backed securities, public-private partnerships, and digital financial services offer promising avenues. Microfinance can empower low-income families with small, manageable loans for home improvements. Mortgage-backed securities can unlock capital markets, injecting liquidity into the housing sector. Public-private partnerships can combine public oversight with private sector efficiency. Digital financial services can expand access to credit, savings, and insurance, particularly in underserved communities.

15.    However, it is also important to say that financial innovation alone is not enough. It must be accompanied by robust policy frameworks, effective regulatory environments, and transparent governance. Our goal should be to create a housing finance ecosystem that leaves no one behind.

16.    On a continental scale, I am optimistic about the potential of private sector led innovative solutions such as the Shelter Afrique Housing Solutions Fund are key in catalyzing investments in the affordable housing industry. The Housing Solution Fund is a 100 billion Naira local currency real estate investment trust authorized and registered by the Securities & Exchange Commission of Nigeria. The initiative was conceptualized alongside its development partners, with Shelter Afrique a key partner, to provide innovative market-based solution to stimulate housing demand and sustainably scale housing supply; By investing in affordable and accessible long-dated home loans offered to eligible homebuyers in partnership with participating lending institutions and pre-qualified housing developers. Further details on the fund will be presented later in this roundtable. 

17.    Engaging all stakeholders is imperative. Governments, financial institutions, developers, community organizations, and international partners must work together. We must foster an environment where ideas can be exchanged freely, best practices shared, and every stakeholder committed to the common goal of housing affordability.

18.    As we deliberate, I urge us all to think boldly and act decisively. Let us challenge conventional wisdom, explore uncharted territories, and forge new pathways to make affordable housing a reality for all Africans. Our discussions here will shape the future of housing on our continent, and it is our responsibility to ensure that this future is one of hope, opportunity, and prosperity.

Thank you.

Arc. Ahmed Musa Dangiwa  
Hon. Minister of Housing and Urban Development