TO THE STUDY
Nigeria is the most populous country in Africa and
8th in the world, with a population of 173 million. Over the
past decade the economy has been growing at an average rate of around
seven percent yearly and, after Johannesburg, Lagos has the biggest, most
liquid market in the region thereby creating the need for massive housing
development. A central bank, reserve bank, or monetary authority is a public
institution that usually issues the currency, regulates the money supply, and
controls the interest rates in a country. Central banks often also oversee the
commercial banking system of their respective countries. In contrast to a
commercial bank, a central bank possesses a monopoly on printing the national
currency, which usually serves as the nation''s legal tender (Arthur and
Sullivan, 2003). Example is the Central Bank of Nigeria (CBN). The various
roles of CBN will however in no doubt have specific impact on housing delivery
to Wikipedia.org, Central banks around the world play similar functions some of
which may include- implementing monetary policies, determining Interest rates,
controlling the nation''s entire money supply, the Government''s banker and the
bankers'' bank ("lender of last resort"), regulating and supervising
the banking industry, setting the official interest rate – used to manage both
inflation and the country''s exchange rate– and ensuring that this rate takes
effect via a variety of policy mechanisms and managing the country''s foreign
exchange and gold reserves and the Government''s stock register.
is one of the basic necessities of life. Indeed, the housing sector plays a very
critical role in a country’s prosperity as it directly affects not only the
wellbeing of the citizenry but also the general performance of other sectors of
the economy. Thus, provision of housing has, since the early 1970?s, engaged the attention of most
countries, especially the developing ones, for a number of reasons. First, it
is one of the three most important basic needs of mankind. Consequently,
programmes of assistance in the areas of finance, provision of infrastructure
and research have been designed by governments to enhance adequate housing
delivery. The focus on finance has, however, been very prominent for the reason
that, housing provision requires huge capital outlay, which is often beyond the
capacity of most of the citizens (Akeju, 2007).
Increase in the rate of urbanization has
exerted pressure on government and other government agencies like the Central
Bank of Nigeria to develop plans for housing development in Nigeria as a result
of situation experienced in most cases that the demand for housing units
outweighs the supply. To address this gap, individuals, firms, and government must
first attempt at institutionalizing housing financing through the apex bank in
Nigeria was the establishment of the Nigerian Building Society (NBS) in 1956.
Thereafter, regional governments set up housing corporations, savings and loans
banks and cooperative banks through the supervision of the Central Bank of
Nigeria to provide funds in the form of mortgage credit for housing development
(CBN, 2003). Following the Indigenization Act (1972) which aimed, amongst
others, at promoting and transferring the ownership and control of foreign
enterprises to Nigerians, the Nigerian Building Society, in 1977, was renamed
and metamorphosed into the Federal Mortgage Bank of Nigeria, (FMBN) to reflect
the 100 per cent ownership of the Federal Government of Nigeria. Within two
years of the establishment of the FMBN, its capital base was increased from N20
million when it was bought over by government in 1977 to N150 million in 1979,
reflecting an increase of over 600 per cent. The current equity base of the
FMBN is about N5 billion, with only 50 per cent of it paid-up (CBN, 2011).
Equity in the bank is split between the Federal Ministry of Finance (FMF) and
the Central Bank of Nigeria, (CBN). In 1994, the FMBN was granted the status of
the premier and apex mortgage institution in Nigeria under the supervision of
the Central Bank of Nigeria. However, the researcher is analyzing the role of
CBN in ensuring affordable housing for Nigerian citizens (CBN, 2007).
Central Bank of Nigeria through the FMBN has encouraged
the emergence and promotion of the growth of viable primary mortgage institutions
to service the need of housing delivery in all parts of Nigeria; mobilized both
domestic and offshore funds into the housing sector; linked the capital market
with the housing industry by establishing and operating a viable secondary
mortgage market to support the primary mortgage market; and distributed the
National Housing Fund (NHF) in accordance with the provisions of the NHF Act”
OF THE PROBLEM
problem of housing has become a daily discussion in all quarters of the public
and private sector of the Nigeria economy and has prompt several government
agencies to implements plans for housing development for both their staffs and
the general public at affordable cost. It has become increasingly glaring that most
of the urban population in Nigeria live in dehumanizing housing environment
while those that have access to average housing do so at abnormal cost.
According to Onibokun (1986), Nubi (1991), rent in major cities of Nigeria is
about 60% of an average workers disposable income. With the high cost of house building
and the effort of government and its agencies that has been inadequate in the
housing delivery, the researcher will analyze the role of CBN in ensuring
affordable housing for Nigerians.
1.3 OBJECTIVES OF THE STUDY
following are the objectives of this study:
examine the role of CBN in ensuring affordable housing for Nigerians.
ascertain the affordability of housing for Nigerians.
determine the factors preventing Nigerians from getting affordable houses.
1.4 RESEARCH QUESTIONS
is the role of CBN in ensuring affordable housing for Nigerians?
is the affordability of housing for Nigerians?
are the factors preventing Nigerians from getting affordable houses?
CBN has not contributed to the provision of affordable housing for Nigerians.
CBN has contributed to the provision of affordable housing for Nigerians.
1.6 SIGNIFICANCE OF THE STUDY
following are the significance of this study:
findings from this study will educate the general public on the roles that
government agencies and Central Bank of Nigeria can play in the provision of
affordable housing for Nigerians.
research will also serve as a resource base to other scholars and researchers
interested in carrying out further research in this field subsequently, if
applied will go to an extent to provide new explanation to the topic.
OF THE STUDY
study on the role of the CBN in ensuring affordable housing for Nigerians will
cover the contribution of the Central Bank of Nigeria towards sustainable
housing development in Nigeria. It will also cover the overview of the services
rendered by Federal Mortgage Bank of Nigeria FMBN which can be likened to a
subsidiary of the CBN.
LIMITATION OF STUDY
1. Financial constraint- Insufficient fund tends to impede the
efficiency of the researcher in sourcing for the relevant materials, literature
or information and in the process of data collection (internet, questionnaire
2. Time constraint- The researcher will simultaneously engage in this study
with other academic work. This consequently will cut down on the time devoted
for the research work.
(2007), “Challenges of Providing Affordable Housing in Nigeria” being a paper presented at the
2nd Emerging Urban Africa International Conference on Housing Finance in
and Sullivan, W (2013) “The Cross-Market Spillover of Economic Shocks through
Multi-Market Banks” Accessed online at http://www.fdic.gov/bank/analytical /cfr/2011/sept
“Guidelines for Primary Mortgage Institutions”, Publication of the Other
Financial Institutions Department Central Bank of Nigeria.
“Revised Guidelines for Primary Mortgage Banks in Nigeria”
of Nigeria (2007), The Financial System Strategy (FSS) 2020
(2002). Financing Low Income Housing in
Nigeria Cities: Need for Paradigm Shi. Proceeding of the Faculty of Environmental Design
Conference O.A.U. Ile Ife, 340 -345.
P. (1985). Housing in Nigeria. Ibadan University Press.