Ethical financing, others required to guarantee affordable housing – Bilaad

Dr. Sadiq Suleiman Abdullahi, Chairman, Board of Directors and Coordinating Trustee of the Bilaad Development Trust, has proposed three key measures - ethical financing, alternative building models, and all-inclusive mortgages - to ensure affordable housing in Nigeria. Speaking at the company's Gem Hunt 5.0 in Abuja, he emphasized the importance of these pillars in guaranteeing affordable housing for the country's population.

In Nigeria, the price of houses has increased significantly while incomes have remained relatively stable over the past decade, resulting in dwindling price-to-income ratios. The current situation has made it difficult for people to afford houses that cost 30 million Naira in 2016, as they now cannot pay rent in some parts of Abuja.

The first pillar for ensuring affordable housing is ethical financing. Dr. Abdullahi stressed that conventional finance with predatory debt should be avoided, as borrowing money from banks and facing rising construction costs in a volatile market does not lead to cheaper housing. Instead, concessionary, revenue-based financing should be employed, as it does not make houses more affordable when the cost of finance is already high.

The second pillar is alternative building technologies. Dr. Abdullahi pointed out that housing solutions must be tailored to cultural nuances, as the type of house needed in Abuja is different from that required in villages. Recognizing these differences is crucial in designing appropriate and affordable housing models.

The third pillar is an all-inclusive mortgage system. Dr. Abdullahi explained that the current mortgage system does not cater to individuals earning between 150,000 and 200,000 Naira, as housing prices are too high. To address this issue, mortgage systems should encompass informal sector earners and various forms of income sources. By doing so, more people can access housing opportunities.

During the Gem Hunt 5.0, Dr. Abdullahi highlighted the significant role of Medium, Micro, Small, and Medium Enterprises (MSMEs) and the informal sector in Nigeria's economy. These entities contribute to over 60% of the country's GDP and generate 80 to 90% of employment. However, they face barriers such as high energy costs, limited digital economy participation, lack of mentoring, and restricted access to credit.

The Gem Hunt 5.0 aimed to address these challenges by fostering collaboration between disruptive entrepreneurs and established business people. Dr. Abdullahi also mentioned that while many entrepreneurs have innovative ideas, conventional banks often refuse to lend money due to the need for collateral. Therefore, providing funding to these entrepreneurs is the first step in supporting their growth.

Additionally, the initiative plans to facilitate digital economy participation and provide strategic linkages between products/services and markets. Finally, mentoring and guidance from experienced business people with capital will be offered, encompassing integrity, knowledge, and relationship capital.