The West African country made the loan from the International Development Association of the World Bank in a bid to meet its high annual housing demand.
“This is definitely a game changer for the industry, part of the things that we expect to see is that the federal government has decided to allocate certain resources to different sectors,” Damola Akindolire, General Manager at Alphamead property development company told CNBC Africa.
Last week, from what the minister of finance said, a portion of the amount is expected to go towards micro finance and micro social housing. In addition, a portion of the amount will also go into providing technical capacity.
“A 10 million dollar facility will be provided to provide technical assistance in delivering some of these objectives,” he said.
Nonetheless, Akindolire believes that the fact that liquidity will be freed up, is important as private mortgage lenders will be able to transfer assets to the refinancing companies.
“There are expectations and because this is a private sector driven initiative. I do expect to see a bit more efficiency in the [implementation] process,” he said.
The annual housing demand in the country is about seven million units however, as the first leg of the process is already in place, Akindolire is confident that impact will be made by the fourth quarter of 2014. This transaction is also expected to create about 30,000 jobs as construction is extremely labour intensive.
“The real problem in Nigeria is that we always like to talk about the supply side of the business. The supply side is where you have developers developing housing stocks to satisfy demand in the market, so there really is a demand side to the business,” he added.
Recent statistics by the African Development Bank showed that the middle income earners account for 23 per cent of the Nigerian population, therefore, they would be future housing demands that need to be met.