The Chief Executive Officer of Millard Fuller Foundation, Sam Odia, says government needs to identify and develop the huge market potential of the informal housing sector. This, he notes, will lead to the provision of more houses and significantly address the country’s housing shortfall. He spoke to FRANCIS KADIRI.
What is the aim of Millard Fuller Foundation?
The Millard Fuller Foundation wants to see everybody in Nigeria living in their own houses. Rich or poor, we want people to own their own homes. We are achieving this aim by building houses that are simple, decent and affordable to majority of the population.
You are aware of the 17 million housing deficit in Nigeria, and I would say we have not even begun to scratch the surface because MFF has built up to 900 houses, so there is still so much to be done.
MFF is the Nigerian affiliate of the Fuller Centre for Housing, which is based in Georgia, USA. It was set up by Millard Fuller, the man who founded Habitat for Humanity – the world’s largest non-profit housing organisation. While Fuller was there, his organsiation reached about 100 countries, and he eventually left Habitat for Humanity to establish Fuller Centre for Housing. So, we are the affiliate of the Fuller Centre for Housing in Nigeria, but we are registered as the Millard Fuller Foundation. The for-profit arm of the Centre is MFF Housing.
How realistic is your goal?
Our intention is to provide every Nigerian with access to a house of theirs. However, the truth is, you cannot force people to own houses. If people don’t want to own a house, it’s their choice. However, we want to ensure that they have access to a simple decent and affordable house.
In the last few years, we have built houses. We started by building houses on a zero profit basis. The first few houses we built were sold for N240,000 to N360,000 here in Luvu Madaki, Masaka, Nassarawa State.
When we rolled out the prices, people found it difficult to believe that a house could sell for so low. It was too cheap to be true. The house types were studio apartments, and self-contained rooms with their own bathrooms and kitchenettes. We did not add the cost of land and cost of administration, it was a give-away. But because it was too cheap to be true, people thought it was fraudulent. Beneficiaries were not required to pay at once, they only had to pay N60,000 to get their house keys, while they pay the balance over the four or five years. It came to about N5,000 installmental payment per month for four or five years. The price went up to N360,000 and eventually close to a million naira.
We were only able to build about a hundred houses for over an eight-year period because we could only build as quickly or slowly as the monies were paid. People didn’t want to occupy our first houses because they weren’t sure of us. But the demolition of houses by the El-Rufai administration forced people to embrace our too-good-to-be-true offer, and the public became convinced that we are genuine, and the rush began.
The first set of beneficiaries were so excited and the news spread throughout Abuja, and we had so many demands for houses that we could not handle because we did not have sufficient funds to meet the demands. So, we decided to find a more sustainable way of financing the building processes. We established a development partnership with Reall UK, which provides us with soft loans that enables us build at scale. We have just finished building 600 housing units and we are about to embark on another 600 units.
Our dream is to build thousands in the next few years, and then to build millions as well. We really want to build at great scale and we are believing that God will give us the wisdom and resources to meet our targets.
MFF Housing will remain open for collaboration with other organisations that share our passion for enabling people to own their own homes.
Considering the success so far recorded by MFF and looking at the statistics of 17 million housing deficit, do you feel fulfilled?
I am happy we are on the right course, I am happy that I am doing what I have been called to do, but I think the problem is so enormous and we cannot be comfortable yet, because our effort feels like a drop in the ocean. Seventeen million houses are needed, but MFF is able to build less than a thousand till date! The challenge is still so much. I would say we are still in a ground-breaking session. We are still trying to formulate and strategise on the best way-forward for delivering adequate houses for Nigeria’s population.
Discussing profits, would you say you made some fortune?
The key concept is ensuring sustainability, so we charge a small profit to ensure that the organisation keeps moving. We need to cover administration expenses and pay salaries and other costs.
What, in your professional opinion, is the most enduring challenge of the Nigerian housing sector?
Project financing. The fact that Nigeria lacks a properly structured mortgage system makes it difficult to attract long-term funds to the sector.
The Land Use Act also causes a lot of limitations. For example, the need for governor’s consent poses some challenges. However, 90 per cent of the population works outside the formal sector. They belong to the informal sector that do not reckon with the provision of the Land Use Act because people are buying lands and building and selling houses, without any recourse to the land use decree.
The same goes for the rural areas because people in the villages do not go to ask for Certificate of Occupancy before they build their houses. So, the informal sector is by far the largest housing delivery sector because more houses are being produced by the informal sector than the formal sector.
Government should identify the huge market potential in the informal housing sector. If government recognises the huge economic prowess of the informal sector and develops it, it will lead to provision of more homes in a sequence that will do much to address the country’s housing shortfalls.
It is difficult to prevent the activities of the informal sector because people must live in homes and so they will always build even if they have no relevant approvals from government. If people cannot get access to C of O or if they are unable to get their governor for his consent, they will still build. It is good for government to urgently recognise this market.
What is your performance rating of the Federal Mortgage Bank of Nigeria?
I don’t like to judge anybody, and so, I say they are trying even though there is so much more to be done. A lot of people who applied for mortgages are not able to access it. A vast majority of contributors to the National Housing Fund are still unable to access mortgage loans, so there is need for recapitalisation of the FMBN. There is also a need for improvement in efficiency of the bank. Well, this is what the public believes and I think the opinion of the public should be considered.
What is the level of patronage enjoyed by MFF now?
Of course, people are rushing our homes, but the rush is like a dog rushing to bite, but cannot bite when it gets to you because there are no mortgages needed to finance their home ownership aspirations. The mortgage system is not working well, the peopled are stuck. The absence of a viable funding window is a great hindrance to home ownership in Nigeria.
Buying a house is likely to be the largest investment a family or individual would make in a lifetime. So it requires support, even if it is a cheap house.
So, what is the realistic solution to this long-standing problem of housing finance in Nigeria?
There are so many solutions but all of them must work together to be effective. I already mentioned land and project financing as issues. There should be financing for genuine developers like MFF because mortgages would not be granted unless there are houses for sale. Since mortgages are based on houses that are existing, there is a need to provide funds with which houses will be built, otherwise there will be no houses for sale even if there are funds for mortgages.
Secondly, there must be adequate financing of mortgages. One tends to have a shorter term than the other. It may take you two or three years to build a house, but you are expected to repay mortgage loan in 10 or even 20 years.
MFF is researching on how to make it possible for low-income earners in Nigeria to own their own
homes.
