Ex-MBAN president says Nigeria needs capital-market funding to build 500,000 homes a year

Nigeria must lift housing delivery to 500,000 units a year from fewer than 50,000 formal units if it is to make a dent in a deficit estimated at more than 17 million homes, and the money for that scale of building will have to come from capital markets rather than budget allocations. That was the argument Mac-Yoroki, immediate past president of the Mortgage Bankers Association of Nigeria (MBAN) and chairman of CityCode Mortgage Bank, put to the association's annual conference and gala dinner in Abuja on Friday evening.

He attributed the country's weak delivery record to two structural failures: a mismatch between the short-term money banks hold and the long-term money mortgages need, and an information gap that keeps lenders from pricing and verifying housing risk. Commercial banks fund themselves with retail deposits of 30 to 90 days, he said, while mortgages typically run for 15 to 25 years, making the banks structurally unsuitable for financing homes at affordable rates. \"Achieving a target of 500,000 housing units per annum requires solving the primary systemic failures in Nigerian real estate: capital mismatch and information asymmetry,\" he said. \"Targeting 500,000 units requires institutional patient capital to bridge this duration gap.\"

His prescription is to mobilise pension fund administrators, insurance asset managers and foreign portfolio investors into long-term housing finance, and to widen the instruments available to mortgage banks beyond their own balance sheets. He called for expansion of mortgage-backed securities, covered bonds and residential real estate investment trusts, arguing that residential REITs and forward-purchase off-take funds could channel pension money into large projects while giving developers a guaranteed exit before construction starts, cutting the risk of unsold stock. He also proposed blended arrangements including green and social housing bonds and government-backed infrastructure bonds to lower borrowing costs.

On property administration, Mac-Yoroki proposed a Central Housing Depository, a digital system consolidating ownership rights, mortgages and encumbrances, to replace what he described as a paper-based and fragmented land registration regime. Such a register, he argued, would speed title transfers, make ownership easier to verify and reduce multiple-sale fraud, noting that more than 90 percent of land in Nigeria remains unregistered. He also suggested that the MBAN secretariat act as a clearing house and repository for national housing data on originations, disbursements and loan performance, and urged the Federal Ministry of Housing and Urban Development to set up an inter-agency housing data directorate so that policy, land reform and budget decisions rest on market evidence.

On supply, he listed land acquisition difficulties, volatile construction costs, inadequate infrastructure and high mortgage rates as the main constraints, and called for harmonised Governor's Consent procedures under the Land Use Act, digital geographic information systems across states and more local production of building materials. Public-private partnerships should finance roads, power and water around new estates, he said, because off-site infrastructure can account for 20 to 30 percent of total development cost. To widen access he proposed single-digit interest rate subsidies and shared-equity schemes, and set out a 36-month roadmap that starts with depository guidelines drawn up with the Securities and Exchange Commission, the Central Bank of Nigeria and the housing ministry, moves to securitised mortgage-backed securities through Nigeria Mortgage Refinance Company liquidity frameworks and state GIS integration, and ends with forward-purchase REIT capital and national automated valuation models. \"Deepening capital markets creates the funding capacity, while a Central Housing Depository and standardized housing data provide the transparency, velocity, and trust required to attract institutional capital at scale,\" he said.