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Unemployment and high level poverty are two major obstacles to getting housing finance in Nigeria. Poverty level in the country is high despite the country’s apparent wealth from petro-dollar. This is made worse by rising unemployment figures in excess of 20 million.
Africa is regarded as a poor continent and, despite its relative large population size, the continent is economically underweight with an estimated €113 billion gross asset value of real estate which represents 1 percent of the world’s total value.
A World Bank report once estimated that only 3 percent of the African population, about 15 percent of the world’s 7.3 billion population has income viable enough to qualify them for a mortgage. This explains the need for initiatives that can lead to viable income to qualify people for mortgage.
That estimate simply underscores the level of poverty in the black continent where some households live below poverty line. Home ownership in most parts of Africa remains a luxury because houses are literally unavailable and where they are, they are inaccessible and unaffordable.
In Nigeria, the continent’s most populous nation and one touted as its largest economy, it is estimated that 70 percent of country’s over 180 million people lives below poverty line, which is the reason for the low home ownership level in the country that is a little above 10 percent.
It is also estimated that about 90 percent of houses in Nigeria are self-built with less than 5 percent of them in possession of formal title registration. Because of this, mortgage loans and advances in the country stand at 0.5 percent to GDP in contrast to 30-40 percent in emerging economies and 60-80 percent in advanced economies.
Adigwe Arinze of Homebase Mortgage Bank attributes this to hostile business environment and lack … Read More...