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How the new CBN home construction N200b fund will not be jobs for other countries

Ongoing National Housing Programme of 1, 2 and 3 Bedroom Flats and Semi-detached Bungalow in Benin City. Image by FMOWH

By John Ogunlela [ Guest Writer]

The Central Bank of Nigeria (CBN) says it has set aside N200 billion to finance home construction across the country in line with the Federal Government’s Social Housing programme.

This is to fit into a larger federal Economic Sustainability Plan 2020 and it will develop 30,000 homes in 36 states of the country.

Figures such as this make you to reach out for your calculator and divide 200 billion (200 with nine zeroes behind it) by 30,000 and then, 30,000 by 36. It comes to 830 homes per state at N6.6 million per home. That is not a bad one in terms of a big picture for a low-cost housing programme for Nigeria. But, that will be getting ahead of the CBN or, and the Federal Ministry of Works and Housing.

Now, how do you spread that amount, or, perhaps, can that amount be spread to cover the cost for a home? In answering this question, it is important that you are aware of a research finding on why low cost housing in Nigeria is usually not successful – why the homes remain unsubscribed by would-be homeowners.

The major leading reason is, the homes are too small, usually 70 square metres or less. This leads us immediately to defining the type of a home you can build with N6.6 million. To cut to the chase, I will say that N6.6 million is tough but possible even after making sure the size is appropriate. Here is how it can be done:

  1. The home will be a semi-detached 2 bedroom bungalow with two bathrooms
  2. Its overall footprint will be 85-95 square metre. That’s a cozy and warm, not an uncomfortably small home.
  3. The developers will leverage volume
  4. 95% of the building materials must be locally-sourced.

Let’s start from the ground up on the four elements. The local content here is 100% with the cement and aggregates coming from local manufacturers. However, the developer can reduce cost by 30% if a trencher is used for the digging.

The walls can be raised with sandcrete blocks or fired clay bricks of the facing type. Facing bricks require more time and skill for precise laying but they save the cost of plastering and maintenance. The lintels would have been prefabricated to save cost on wood form works.

The roof, which is 24% of the total building cost will mean aluminum import from China and this is where the agony begins, for of that 24% of N6.5 million (let’s use N6.5m), 16% is spent on roofing sheets, which is N1.04 million per home. In other words, we will be going around cap in hands to look for N1.04 million times 30,000 to buy dollars with which to buy aluminum roofing sheets from China.

That’s some N30 billion there helping create jobs in China. (Never mind, we ran aground our aluminum plant, ALSCON at Ikot Abasi many years ago and we are living with the consequences). But can this money be somehow saved? The answer is, Yes. But we will need some innovation. Fired clay is an immediate viable option, unless ALSCON is revived tomorrow.

Fired clay roofing tiles are actually the original Red Roof with a reputation for some sort of exclusivity in the Western world. It is more expensive than aluminium, being more durable and being a far better shield against heat and the white noise of rain.

 If the policies guiding the CBN are panned in this direction, we will not only be saving forex, we will also be creating a great deal of jobs across various sectors locally. The cost will be mitigated to a good extent, by leverages on the construction volume.

So we have the carapace of the building now and the imported component is nearly zero.

Now to windows, floor tiles, wall tiles, doors and sanitary wares. Interestingly, the technology that took care of the roofing is also modified to address sanitary wares and tiles – they are all ceramics and all that is needed is further machinery configurations. We import practically all our glass for windows since Oluwa Glass isn’t up and doing.

We can get all our doors from woods sourced locally and there is an import component in our steel doors. Perhaps some of the steel can be locally addressed through the steel recycling factories we have all around. Yes, they do produce quite some quantities of iron rods and rolled steel. Maybe the CBN can do a quick capacity enhancement there for existing plants and there we go with a quite reasonable housing deal for the country. Yes, we really can.

John Ogunlela explores national development issues from innovative perspectives

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