Nigeria’s housing deficit problem


Middle income earners in Nigeria are being hindered from buying homes due to their insufficient wages and exorbitant interest rates in the repayment of mortgages.

Barrister Abies Akoptu (32) has been renting her two bedroom apartment in Port Harcourt for four years. “I have never attempted to buy a house because Nigeria is not mortgage friendly.” The interest rates for mortgage loans in Nigeria are between 22 and 24 per cent, rates which many citizens cannot meet. “I think these are some of the highest rates on the continent,” she says.

 Akoptu adds that another issue with buying a house in Nigeria is the economic reality that people do not have “[the] security of income”.  One of the conditions which have to be met in order to qualify for a loan to buy a house in Nigeria is that the applicant needs to earn a minimum of N300 000 a month which is equivalent to an average of US$1 500. 


According to World Bank data released in 2014, the average Nigerian earns US$2 710. Even if they qualify for a home loan, repayment conditions are unaffordable and job security is not guaranteed so “people are more comfortable paying rent … it’s just safer with the economic challenges in Nigeria”, explains Akoptu.

Akoptu pays N400 000 yearly to rent her apartment whereas to buy one could cost up to N1.2 million. She is also in the process of building a house, “it’s very cost effective to build from scratch. Rent varies from city to city. In Benin for example, renting an apartment starts from N120 000 a year.”

Bosun Jeje, commissioner for housing at Lagos State, acknowledges that there is a housing deficit of 16 million in Nigeria. In an interview on CNBC Africa’s Power Lunch, he explained that government, in partnership with private investors aim to bridge the deficit by building affordable housing units.  He further explains that the mortgage the government has set up for these units comes with a single digit interest rate making them affordable to Nigerians.