Dataphyte Nigeria has released its maiden Advisory Note, the first in a series of sectoral reports that provide expert appraisal of critical issues within each target sector, and proffer feasible private sector responses and public policy solutions.
This first edition, titled “Nigeria’s Post Oil Economy: Going the Housing Consumer Credit Path”, is a critical analysis of the employment cum income potentials of the manufacturing and construction sectors, positioning the housing subsector especially as an alternative for revitalizing Nigeria’s economy, and as a viable revenue alternative to the government’s perennial debt financing.
The Housing Advisory Note explains the unsustainability of aggressive deficit spending to sustain economic growth and the undesirability of the monetisation of deficit which rather weakens macroeconomic outcomes.
It examines previous attempts to stimulate the economy and how these attempts have predominantly focused on production, neglecting consumption. It explains how tapping into consumer demand can boost economic growth.
The report presents a clear path on how housing construction and homeownership may be a silver bullet, stimulating the construction and manufacturing sector, which can in turn create more jobs and employment, and drastically reduce Nigeria’s huge housing deficit. Homeownership in Nigeria is lower than in most countries. Only 35.7 percent of Nigerians residing in urban areas own their homes, down from the 2016 level of 48.1 percent.
This deficit is indicative of challenges with affordability and availability, and the report suggests directing interventions at the Mortgage origination sector which could in turn trigger huge housing construction and jobs.
Given that 60 percent of the investment in Housing will result directly in the purchase of construction input like aggregates, cement, wood & wood products, basic metal, iron & steel, electrical & electronics, and non-metallic products subsectors, such investment could potentially create millions of manufacturing, logistic and mining jobs in the short to medium term, thus, stimulating those sectors to productivity.
To reposition the housing sector, the report recommended deepening the secondary market for mortgage-backed securities, standardizing mortgage and foreclosure laws, simplifying mortgage payment structures, and reviewing the cost of building materials and training for local craftsmen.
The Dataphyte Advisory Note: Nigeria’s Post Oil Economy Going the Housing Consumer Credit Path” is a veritable resource for policy makers, especially as conversations around stimulating the economy and reducing Nigeria’s debt burden continue to take centre stage. Stakeholders in the Housing Sector will also benefit from the report’s insight on positioning the sector for big wins that underscore cross cutting development.
The advisory note can be accessed using this link