CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE ESSAY

The problem of housing has been every day discussion in all quieter of the public and private services of the developing countries of Africa. It has become increasingly glaring that most of the urban population live in dehumanizing housing environment while those that have access to average do so at abnormal cost. According to Onibokun (1986), Nubir (1991) rent in major cities of Nigeria 60% of an average workers disposable income. This is for higher than 20-30% recommended by United Nations. Ekeweme (1979) lyagba etal (1998) explain that the rate of demand for new housing awas in part  predicated on  the rate of formation of new  houses and in part on the rate of replacement of old housing stock. With estimated population of 110 million as quoted in 1991 census report, Nigeria need to produce 720,000 housing units per annul based to the building industry.

Despite Federal Government access to factor of housing production, the country loud at, best expect 4.2 of the annual requirement from her. Substantial contribution is expected from other public and private sectors. It should be acknowledge that private sector developers account of 83 of urban housing (federal office of statistic, Lagos 1983). Unfortunately the private sector is saddled with numerous problems which make supply always all for short of demand. Of these the most limited is finance. Varies studies have, at different times, revealed the problem of housing production. Teufic and Oral (1978) Ogundele (1989) Agbola (1987) Opbala and Onibokun (1986) recognized financial as part of housing problems but ranted land and building materials higher. This led to intensive researchers in these areas. Their findings influenced government housing policies and subsequent establishment of some relevant programmes and institutions like the site and services programmed and the national institute of road and building research. The drought of information and working knowledge of housing financial operation is a major problem today.

In a tight money market, housing is the first area to suffer, since neither the building nor the consumer can readily obtain finance for housing. Actually manage builders have difficulty obtaining capital for their projects even in normal times. Two of these problem the high interest rate contribute the high cost of  housing and the  difficulty is obtaining capital for home construction are examined more clearly in this paper.

According to Onabule (1996) 245 primary mortgage institutions were established under the NHP between 1991 – 1996. unfortunately, only 54 are now operating mainly  in south  west of the country and Abuja.

According to Abiodun (1999). National housing  fund collected about 4 billion  naira from the mandatory saving scheme. Out of 300 million loan approved by FMBN, only N100 million was advanced. The problem in this case is not availability of fund but strongest measures to prevent default. Hence the housing problem perish.

HISTORICAL BACKGROUND

According to Arilesere (1997) Abiodun (2001) Agro – based to petro – Naira. Based economy did not help matters, the assertion that “money was not our problem but how top spend it” accredited to one of our Heads of State, is  a summary of a Nation that lacked focus in the formulary years. This situation together with unprecedented population growth has remaining unchecked ever since. If the foundation is faulty, what can the righteous do? Housing finance was during the colonial days was limited to the expatriate staff and few selected indigenous senior civil servant in the urban countries. The establishment of Lagos exclusive Development Board (LEDB) in 1925, Nigeria Building Society (NBS) in 1956, formation of state Housing corporation between 1956 and 1960, National Council of housing 1971 and federal mortgage Bank of Nigeria (FMBN) 1977 with take off capital of N20m which was later increased to N250 in 1979 are very families development in our history. The world Bank assistance was obtained in 1979. This led to housing project in eight state of Nigeria with Bauchi state having a share of N24.6 million and Imo state N63.8 million. The 1980 – 1985 fourth National Development programs also proposed a budget of N1.9 billion for housing.

During this period N600m was spent on housing construction. The failure of these incremental housing production programs and the ever – increasing housing need lead to the promulgation of National Housing policy of 1991.

HOUSING AS A SOCIAL PROBLEM

The literature on economic development abounds with reference to the social nature of housing requirement. This phrase is used to distinguish the housing sector from other capital institutions sectors of developing economic such as manufacturing. The implication which is often made very explicit, indeed, is that while there is no economic need for housing investment since the market demand for it appears very weak, it ultimately must be provided in order to solve a social problem “according to smith (1970) housing sector is regarded as a drag upon the process of economic growth. While it is admitted that housing must be provided or improved eventually many national economic development programmes regards housing as a form of investment eminently able to be postponed. The longer it can be put off, the reason goes, the better the result for the nation as a whole.