Nigeria plans to raise, with the help private investors, a fund worth 1 trillion naira ($3.3 billion) to finance mortgages for low-income earners, its vice president said on Tuesday.
Africa’s most populous country, home to more than 180 million people, suffers from a housing shortage. Few banks offer long-term mortgages as high interest rates make them unattractive for buyers and risky for lenders worried about defaults.
“It’s actually a financial intervention fund … Already we are trying to aggregate funds from the private sector, local and international investors,” Vice President Yemi Osinbajo told a business conference in Abuja, without giving a timeframe.
“The idea is that any Nigerian who earns at least 30,000 naira ought to be able to own a home,” he said, adding that the developers would be able to use the mortgages raised by the fund to build affordable housing. He gave no more details.
Officials have said Nigeria needs to build around 17 million houses annually to catch up with a fast-growing population which is set to more than double to 400 million in 2050, according to U.N. estimates. Nigeria will be then the third most populous nation after China and India.
The previous administration under Jonathan Goodluck tried to tackle the issue by setting up a federal mortgage bank to help those who cannot get loans from banks but bankers say the project never really took off.
The current president, Muhammadu Buhari, has made fighting poverty a priority, launching last year a scheme to pay 5,000 naira a month to poor youth or university graduates who cannot find jobs.
Buhari has approved a record budget worth 6.6 trillion naira to triple capital expenditures and drag people out of poverty but a slump in vital oil revenues has hit hard public finances.