Ppp and housing

URBAN DYNAMICS & HOUSING CHANGE -Crossing into the 2nd Decade of the 3rd

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WS-06: Social Housing: Societal Changes and Political Responses

ENHR 2010, 4-7 July, ISTANBUL 22nd International Housing Research Conference

NIGERIA’S HOUSING POLICY AND PUBLIC-PRIVATE PARTNERSHIP (PPP) STRATEGY: REFLECTIONS IN

ACHIEVING HOME OWNERSHIP FOR LOW-INCOME GROUP IN ABUJA, NIGERIA

BY

Bawa Chafe Abdullahi

Department of Estate Management, Faculty of Built Environment,

University of Malaya, 50603, Kuala Lumpur, Malaysia

[email protected]

&

Dr. Wan Nor Azriyati Wan Abd Aziz

Department of Estate Management, Faculty of Built Environment,

University of Malaya, 50603, Kuala Lumpur, Malaysia

[email protected]

Abstract

The key objective of Nigeria’s housing policy is the provision of suitable and adequate shelter for all citizens. The challenge of providing housing in Nigeria, particularly to the low-income group (LIG) is assuming tasking to government to address. In such a situation, there is paradigm shift from “provider” to” enabler” approach in housing provision through the strategy of public-private partnerships (PPP). This paper seeks to examine the practice of PPP in meeting the housing challenge in Abuja, Nigeria. The new approach entails the organised private sector (OPS) will drive housing development for sale at affordable prices to the low and medium income groups in the country. From the case study of estates so far developed under the scheme, the findings of the study shows that the programme was carried out without adequate planning and implementation, mismatch with the goals of national housing policy (NHP) and emergence of investors buying over the few units developed and had by implication excludes the target beneficiaries. The study concludes that this strategy does not translate into the full achievement of the planned objective of the programme.

Keywords: Housing Policy; organised private sector (OPS) Public-Private Partnerships (PPP); low-income group (LIG); Abuja


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Introduction

Over the years of Nigeria’s historical development, has developed and implemented a number of housing policies and strategies, in an attempt to address the housing of its citizens and particularly the low-income group (LIG). Consequently, plethora of literature has been generated on Nigeria housing policy. The scholars adequately present the fatal failure of the public housing scheme to housed Nigerians (see Okapala, 1986; Agbola 1990; Awotona, 1987;1990; Ogunshakin & Olayinwola, 1992; Ikeojifor, 1999b; Ogu, 1999). Thereafter, there were writings from the World Bank and allied scholars in propagating the idea that through supporting policies to the private sector can adequately tackle the persistent inadequate response from the supply side (see Drakakis-Smith, 1987; World Bank, 1993; Pugh, 1994; Ogu, 1999; Ogu & Ogbuozobe, 2001). By 1980s through 1990s, the developing countries like Nigeria have taken the directive dictated on them by the international agencies most especially World Bank to henceforth refrain from direct role in housing and adopt market driven policies to enable housing provision in their countries (World Bank, 1993; Sandhu & Aldrich, 1998). At this instance, many of the opponents of neo-liberalism through the World Bank condemn the strategy on the grounds of its likely deepening of exclusionist trends it would further generate on the poor and LIGs in the developing countries (Baken & Linden, 1993; Ortiz, 1996; Jones & Ward, 1995; Mukhija, 2001,2004). Despite the enthusiasm for enablement approach, specifically in Nigeria, there are few researches done on the efficacy of organised private sector (OPS) in achieving the housing of LIGs. Perhaps might be attributable to the fact that OPS developers presence is not much developed and felt in the country (Ogu, 1999).However from the little available in the Nigerian housing literature, the OPS are recognised to have much concentration on housing the upper-and medium-income groups (Ikeojifor, 1997) and generally display the tendency of profit maximisation (Keivani & Werna, 2001a). The position of Mukhija (2004) that the impacts of the new strategy is not yet adequately defined, researched and its effectiveness doubtable strengthen the need for this study. With adoption of enabler strategy, to house Nigerians, particularly the LIG, scholars have begun to express cynicism that the desired objective might not be achievable from the participation of the OPS (see Keivani & Werna, 2001a; Aribigbola, 2008; Ndubueze, 2009). In this paper, we examine the performance of OPS from the PPP housing estates developed under Abuja mass housing scheme (MHS). Our purpose is to examine the practice of PPP and show whether it has improve the LIG in accessing housing developed under the scheme using case study housing estates developed under the scheme in Abuja, the capital of Nigeria. The study also intends to demonstrate the efficiency or otherwise of both government and its private partners in managing housing production and delivery in the city

An overview of Nigeria housing policy and its attempt to address the LIGs housing in Nigeria

Nigeria as a country came into existence in the 20th century during the period of colonialism. It gained a political independence from British on the October 1st, 1960. The country has a political structure that comprises of 36 states, 774 local government areas and a Federal Capital Territory (FCT), Abuja. Nigeria is located in the western part of Africa, considered as the heart of Africa and has a land area


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about 930,000 square kilometres and inhabited by over 150 million. Also more than 50 % of the population live in its urban centres (UN-Habitat, 2008). Economically, according to World Bank (2010) Nigeria is classified as low-middle income country with a gross national income (GNI) of US$175.6 billions. And it has GDP growth rate of 3.0 %, per capita income of US$1,160 and about 84 % of the population below US$2 a day. Nigeria is an OPEC member country and it occupies 7th position among these crude oil producing countries (Opec, 2009) and account for a quarter of Africa’s crude oil production (Ogwumike & Ogunleye, 2008). From the crude oil sales, Nigeria has realised revenue of over US$350 billion and has proven oil reserve capacity of 30 billion barrels (Ogwumike & Ogunleye, 2008).

The introduction of National Housing Policy (NHP) in early 1990s and its subsequent review in early 2000s gave a boost to OPS take position in the provision of housing in the country (FGN, 1991; 2006). A number of policies, incentives and programmes are designed and implemented over the years to create vibrant OPS in housing sector of the economy and government to retire to a position of enabler. These include creation of institutional structures; creation of financial mechanisms; restructuring, strengthening and recapitalisation of the financial institutions; review of laws and statutes to make them effective and enforceable, creation of new institutions and creation, growth and professionalization of the OPS in housing sector (Fortune-Ebie, 2006). These changes began in the major milestone in NHP 1991 that formally recognised the private sector contribution to housing in the country.

Prior to these changes in Nigerian NHP experiences shows there was overwhelming dominance of the private sector provision and little contribution from government. The Federal Government did not recognised housing as part of its social responsibility until the 3rd (1975- 1980) and the 4th (1981- 1985) National Development Plans. The Federal Government carried out a very ambitious housing scheme on large scale, with the ultimate target of boosting the supply to particularly ameliorate the acute housing shortage among the LIGs who were worst affected. In particular, during the period of national housing programme embarked upon by the civilian administration earmarked 80 % for the low-income. However, after expending colossal of resources worth billions of dollars it recorded a miserable failure.

However, the government participation in housing was not impressive and in fact it was a failure. In Nigeria, scholars have shown that the problems of the policies were lack of political wills, institutionalised policy and continuity, politicisation of the programmes, political corruption, poor funding and inadequacy of mortgage institutions, poor socio-economic structures, among others have contributed immensely to the failures (Awotona, 1990; Ikejiofor, 1999b; Aribigbola, 2008; Ndubueze, 2009). The failure of provider approach prompted the government to adopt a change in its NHP beginning from the NHP 1991. The current policies embrace the private sector as the vehicle to address the severe shortages of houses in the country. While the government position itself as enabler and facilitator in the housing delivery in the country.


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Concept of enablement and public-private partnership (PPP)

Over the years in developing countries, the government play the sole or dominant role in all spheres of economy and public service delivery (Njoh, 2006). The enablement came as paradigm shift from the ‘provider’ and self-help’ phases, which falls in the third phase from the period of mid-1980s of housing policy evolution in the developing countries (Choguil, 2007) to adequately house the LIGs. The self-help and enabler concepts have long history prior to the present time when it is adopted and encouraged by the international institutions on governments of developing countries (Harris, 2003). According to Yeboah (2005) argued the practice and debate on self-help housing is what nurtured the emergence of the concept of ’enablement’ and only became more relevant when the World Bank and other international institutions started pursuing the neo-liberalism policies (Pugh, 1994a,b). The enablement as the next guiding principles appeared prominently in the United Nations Centre for Human settlements (UNCHS-Habitat) documents and publications and from which the UNCHS (1990) Global Strategy for Shelter (GSS) (Pugh, 1994a).The strategy entails positioning of private sector and its market efficiency as the next vehicle for housing delivery, while the governments are to provide an enabling environment from its reformed institutions and regulations to ensure the sustainability of the market in the difficult task of bridging the polarise gap between demand and supply of housing and its related infrastructures in the developing countries (World Bank, 1993).

The debate that emerge in the literature and which has no conclusive position, whether informal or formal market should be vested with the responsibility and accorded with all the deserve policy support to work towards the attainment of the enablement objective on the platform of private sector driven housing delivery(Keivani & Werna, 2001a, b). The opponents of the enablement seem to strongly oppose the formal housing market to take charge of delivery of housing and enable by the state (Baken & van der Linden, 1993; Jones & Ward, 1995; Ortiz, 1996; Keivani & Werna, 2001b).The general position of these scholars is that the formal private market historically has never being on the vanguard of provision of housing to the LIG in developing countries and the objective of profit maximisation would deepen market failures and distortions. Specifically, Keivani & Werna (2001b) declared that the formal private firms should not be the focus of the enablement to meet the LIG housing in the developing countries, because by doing so the attempt to develop new policies and further expansion of the existing policies would be stifled.

On the other hand, earlier research by World Bank (1993) and Malpezzi (1994) suggested that the formal private market as the strongest element should be enabled in developing countries, because of their economies of scale to fulfil the desire result of lasting solution to the problem. Not only that, it would be a platform to launch a new vision of economic development in the developing countries. An empirical study of Segupta (2006) in India and Abd Aziz (2007) and Salleh (2008) in Malaysia seems to support this postulation. For instance the study of Segupta (2006) shows that the formal private sector has impacted on housing in Kolkata with efficiency in production due to the firms’ technical and marketing expertise. The accountability and righteousness of the public sector strongly complimented to the realisation of the accomplishment. Similarly, Abd Aziz (2007) and Salleh (2008) the wonderful success of the private developers in country shows that the housing provision for LIG is subjected to series of government policy regulations and controls which the private developers were able perform wonderfully in meeting LIGs dream of home ownership in Malaysia. Given quality


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enabling environment coupled with the government consistent policies and incentives the formal private sector is capable of meeting the housing of the LIGs in developing countries. There is need to correct the misinterpretation of enablement that means complete rolling back of the state from housing provision, when in actually sense the enablement requires more of state involvement in housing delivery (Mukhija, 2001; 2004; Segupta, 2006).

From the policy documents of the international institutions that sponsor enablement, suggested that the platform of public-private partnership PPP arrangement would be use as the vehicle of market led delivery of housing in the developing countries (Sengupta, 2006). This perhaps explains the increasing emphasis in many countries on the use of PPP (Whitehead, 2007) for housing development. The fundamental goal of PPP is to share responsibilities between the participating parties. Depending on the agreement, PPP in housing according to the enablement, the private sector is entrusted with the responsibilities of physical construction, funding, implementation and in some cases the management of the disposal. On the other hand the government contribute by setting the goals, supervision and monitoring, standardisation and provision of legal, institutional, economic policy frameworks (Sengupta, 2006; Tecco, 2008).

Research methodology

The research methodology uses a two pronged approach namely, quantitative and qualitative. The research exploits the primary and secondary data sources to enrich the facts for the analysis. The actual data collection was conducted between November, 2009 and March, 2010. The semi- structured questionnaires was administered to Directors (or representatives) to the relevant stakeholder departments in the FCDA. However, just like the experience of Mukhija (2004) the researcher could not administer the instrument to some developers; even though allowed the conduct of other research activities in the premises of their gated estates and other bluntly refused same to participate in the study. However, because of similarity of the operating environment might not distort the outcome off the study.

Finally, PPP housing estates occupiers/residents constitute the study population and structured questionnaires, assistance of research assistants, were administered to sample of 400 residents from the six case study PPP housing estates selected. And the unit of study is the head of household, to achieve time saving and reduce expense of the study, as it is recognised as an advantage of using such in household survey (Fisher, Reimer & Carr, 2010). The head of household respondents were selected based on the order of one house from after every five houses, but at a later time, the selection was conducted according to the willingness of the household to participate in the study, due to uncooperative attitude expressed by some of the estate residents. The research survey instruments were first were coded and analysed by using the SPSS. The Cronbach’s Alpha reliability test of the instrument obtained the value of 0.638, falling within the range of acceptable reliability. We suspect the use of different research assistants perhaps might be the reason for the value we obtained. The results of the study are presented in the descriptive format.


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Abuja the study area

It was in 1976 that Federal Military Government led by Late General Murtala Mohammed enacted Federal Capital Territory Act (FCT) established Abuja after it has been chosen to be the administrative capital of Nigeria (Moore, 1984) and with solely administrative functions. This was after the failure of Lagos due to the problems of inadequate land space for future expansion, terrible traffic congestion, poor drainage, acute housing shortage and associated costs, unbearable ethnic influence etc. The planned period for the transfer was to be completed in 1986. However, it was on 12th December, 1991, the final movement of Federal capital to Abuja became a reality.

Abuja is located in the geographical centre of Nigeria (Figure 1a) and lying between latitudes 6 degrees 45’ and longitudes 7 degrees 39’ north of the equator. The land of approximately 8,000 square kilometres was carved out from the then neighbouring states of Kwara, Niger and Plateau to serve as the FCT and the Federal Capital City (FCC) to constitutes about 250 square metres (IPA, 1979).The government vested all the land in FCT in the Federal Government of Nigeria. The government also created Federal Capital Development Authority (FCDA), as its agency responsible for the spatial planning and development of the FCT.


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Figure 1a, b &c Map of Nigeria showing the location of Lagos and the new Federal Capital Territory (Source: Jibril, 2006:3) Map of Federal Capital Territory showing the phases of development of Abuja Map of Federal Capital Territory showing the names of districts in Phase III of Federal Capital Territory The FCDA commissioned an International Planning Associates (IPA) to design the master plan of the city and its report was submitted in 1979.The city is planned to be developed in four phases


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(Figure1b). The bulk of PPP MHS project sites fall within the Phase three (Figure 1c). The phase has a land area of 163 square kilometres. The population of Abuja has over years been growing steadily as several censuses had revealed. In 1991 and 2006 National Population Commission (NPC) census the population of FCT of Abuja was estimated to be 378,671 and 1,406,239 respectively. However, with not up 50 % of planned development of Abuja attained (Daramola & Aina, 2004); the city is estimated to have a population of over 6 million, which by far exceeds the original design capacity of 3.2 million when the city is completed (Imam, Mohammed, Wilson, & Cheeseman, 2008).This geometric increase is reaffirmed considering the figures reported by UN Habitat (2008) that Abuja was the fastest growing city in Africa with annual growth rate of 8.3 % per annum and much greater than Mega city of Lagos with 3.74 %.The failures of the administration of Abuja to implement the recommendations suggested by the IPA (1979) on the achieving housing delivery are apparent. The souring demand and the inability to access formal housing, the unmet demand necessitated the emergence of informal and unplanned settlements, numbering over 65 in the Federal Capital Territory (FCT) as symbol of apparent failure of the city administration (COHRE, 2006). In addition to the stringent policies pursued by the city administration have seriously aggravated the housing situation to Abuja residents, most especially to the poor and LIGs (Daramola & Aina, 2004; COHRE, 2006; Jibril, 2006, 2009).

Findings and discussions

Mode of implementation of PPP housing in Abuja

The idea of engaging the practice of PPP in housing development in Abuja is traceable to the Mabogunje (2001) position paper in 1999. Mabogunje (2001) advocate government to encourage the development of OPS and made land available to this class of developers in the city. The mass housing scheme (MHS) commenced in the 2000 under the framework of a PPP (FCTA, 2008). The implementation of the MHS was first managed by an ad hoc committee and currently under a substantive department, to effectively co-ordinate the implementation of the scheme (Bamalli, interview 2009).

The OPS developers were made to sign a development lease, undertaking to complete the development within 3 years and 18 months under the first round and MAS accelerated development respectively from the date of signing the agreement. From copies of the agreement made available to us, the agreement specifies the public sector and private developer responsibilities. It requires the developers to comply with the city regulations, standards and specifications in the course of construction of the housing units. The breach of the Development lease agreement was specified in the document.

Similar to Mabogunje (2001) suggestions, the MFCT only grant the OPS developer access to land to develop, the title to land rest with the authority. It is after the development and sold out to the general public that the developer is expected to submit the list of the beneficiaries. The list is to be accompanied with site development plan, engineering infrastructure design and ‘as-built’ drawing


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with survey data for each plot to the FCTA (DMH, 2009). After all the necessary assessment the beneficiary is to be issued with certificate of occupancy (C of O) on the payment of relevant statutory rents and charges.

At the beginning the land allocation was made to the OPS developers at no cost, apart from the meagre processing fee paid, as government equity contribution to the scheme. Also under the scheme, the FCTA was to provide primary infrastructure whilst the developer was to provide secondary and tertiary infrastructures “compliant with the standard specified by the Master Plan of Abuja” (FCTA, 2008:6). However, it was provided in the agreement that where after the completion of the estate, the government fails to provide the primary infrastructures as stipulated, the developers were allowed to provide such infrastructures as necessary to make the estate habitable.

The FCTA prepared and revised guidelines of its mass housing programmes. The new guideline specifically stated that maximum allocation of 10 ha and 20 ha for the scheme can be made for housing developments in the satellite towns and the city respectively. However, violations of the guidelines abounds in allocation of excess of the approved maximum sizes, favouritism, fraud are common (DailyTrustonline, 2010a).

The level of response of participation generated on the PPP housing in Abuja

The promise of reforms package introduced by the government generally serves as the rally point to attract stakeholders’ participation on PPP housing sector in Abuja. Consequently, there were tremendous responses of the OPS that enlist in the government policy of private sector-driven housing development. The bulk of participants were from OPS under the umbrella of REDAN (93 %), and remaining is shared between international construction companies, public corporations and formal organisations staff co-operatives enlisted for participation (Table 2). Although there are other stakeholders participating, the PPP in Abuja have succeed of attracting bulk of participants from the OPS and corresponds to the original policy document proposal of mobilising and enabling this class of developers to demonstrate on how best to tackle on housing the LIGs in developing countries.

Table 2. Distribution of participating developers in PPP housing estates in Abuja

S/N Developer Number % 1 OPS 122 93.1 2 Public corporations 6 4.6 3 Staff cooperative 3 1.5 4 International company 1 0.8 Total 131 100 Source: FCTA (2007, 2008)

Considering the opportunities offered many OPS developers have sprung up to access the high valued and privilege Abuja land given at no cost. The trend of events shows that few joined with genuine intentions to contribute to the solution of housing problems of Abuja and many are taking the position of land grabbing opportunity and after the allocation, with the administration connivance subdividing the plots allocated and sold to interested developers and making unproductive profit. The OPS


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developers selling the lands and enjoying unprecedented gains is becoming a popular business in Abuja. This is type of OPS are popularly called “land grabbing merchants” or “brief case companies” firms owned by politicians, proxy civil servants and dubious business men. Paradoxically at the time of inception there were no guideline principles to ascertain the financial, technical and technological competence of the participating OPS. According to one official interviewed (Interview,2010) states that most of the selections and the subsequent allocations of land were made without due process, but rather based on what he called “man on man relationship” and FCTA (2007; 2008) supported this fact that all land allocations made were without a verifiable list of the beneficiaries. This add strength to an earlier trend observed at the early stage of Abuja development that what matters in securing contracts and land was “patronage rather than on merit” (Moore, 1984:174).

The implication of these developments on PPP housing development, despite the tremendous response enjoyed, the public sector as major stakeholder of the scheme have displayed absolute incapability of steering the programme to one of success story due to the absence of an effective administrative machinery to build the required commitment, coordination and control. For instance as at 2008 there were only 32 % OPS on site and only 13 % them carrying out the development with approved building plans (FCTA, 2008). On the other hand, the participating OPS were busy building high income and luxury homes for the rich Nigerians all over the PPP housing estates, with little or no consideration to the low-cost housing that will be affordable to majority of Abuja residents.

The land and associated infrastructure provisions under the PPP in Abuja

The literature on Abuja indicates land accessibility and affordability constitute the major constraint to housing developers (Ikejiofor, 1997; 1998a; Egbu, Olomolaiye & Gameson , 2008). For instance the study of Egbu, Olomolaiye & Gameson (2008) shows that formal land acquisition and its requisite development rights the developer needs to spend 381 days (one year and two weeks) when all the requirements are fulfilled. While according Ikejiofor (1997) 10 % of the small- scale developers respondents in Abuja secured land from government source. Abuja experience one of highest land prices in the country and of recent the land price has been reviewed by over 900 % (DailyTrustonline, 2009). The advent of PPP mass housing scheme (MHS) came as a relief to OPS developers in accessing land for housing development, where the land is made available as public sector equity contribution to the partnership.

However, the inept management generate a lot of confusion by indiscriminate allocation and revocation of plots without recourse to due process and even to the extent of allocation of non-existent plots (FCTA, 2007). The report indicate that allocations were made without due recourse to other stake holder departments. At most times the OPS cannot have a development planning of the project with absolute confidence. For instance, 56 OPS developers were affected by relocation amount to land size of 874 hectares, ranging between 5 and 40 hectares to individual developers (Table 3). There were some allocations that were revoked for non-compliance with terms of agreement. But such developers were reinstated to their plots after been reallocated to other developers. The double allocation against on one plot has created conflicts between the developers themselves. Many times the reinstatements of such allocations by the PPP unit were not communicated to the other stake holder departments and agencies for appropriate updating of records, further to add confusion and


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senselessness of the implementation. The effects of this attitude, the development of the plots were put off pending the resolution of the conflict.

Table 3.Number of OPS affected by relocation and revocation of land (in ha) under the PPP scheme in Abuja

S/N District No of OPS for relocation

Total land size

No OPS for revocation

Total land size revoked/withdrawn

1 Wumba 22 200 2 15 2 Kafe 1 100 2 40 3 Galadimawa 4 85 4 80 4 Dakwo 11 129 - - 5 Lokogoma 8 190 2 30 6 Mbora 10 170 - - Total 56 874 10 165 Source: FCTA (2007: 4-12)

The interviews with households and developers (Interviews, 2010) show that the issuance of C of Os was yet to commence in respect of the PPP housing estates so far completed. On the part of the DMS attributed the delay to the developers, who were yet to make submission of the list of their beneficiaries to the relevant department. In any case this negates the whole idea of conferring titles to the beneficiaries, which they could have use the title document to source for capital or even to arrange for mortgage to cover the initial cost of acquisition of the houses sold on “cash and carry basis”.

The Abuja property market is characterised with uncertainties and the participating OPS are not spared. The property market and development at all times await the announcement of revocations of land in Abuja as soon as there is change of ministerial appointment. Abuja had 13 ministers from its 34 years of history and on the average the ministers spent an average of 2.6 years of governing the ministry. Of recent it is reported that the newly Minister of FCTA appointed in April has ordered the revocation of land allocations of the immediate past administration (DailyTrustonline, 2010b). The reasons at most times given include favouritism, non-compliance of due process and nepotism in the land allocation process.

To date there are conflicting records of land allocations to OPS developers from the records of DURP, DCD, AGIS and DMH. On the general note all the stakeholders departments do not have accurate records of the OPS developers, development and management, in terms of number of housing units under construction, constructed and disposed. The practice of implementation is absolutely not under the FCDA/ MFCT supervision, coordination and control.

The Abuja Master Plan stipulates that any development to be executed, a detailed site and development plans and engineering design are compulsory. But the allocations of the MHS were made “arbitrarily without recourse to neither the detailed site development plan nor engineering design for those districts” (FCTA, 2008:28). The FMFCT/FCDA did not have the detailed prepared land use plans and engineering designs of the districts before the allocations were made to the OPS developers. With this abnormally, the private developers also went into development without equally


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preparing their individual estates land use plans and engineering designs. Even the few that submitted the plans and design, many did not secured the Department of Engineering Services (DES), Development Control Department (DCD) and even the Department of Urban and Regional Planning (DURP) approvals, but all the same went ahead with the developments. When planning was done by the DURP later, made some private developers lost their allocations and some also lost their allocations on the ground that their plots were taken over to accommodate the proposed Commonwealth Games village 2010.There were cases of multiple allocations, encroachments and disputes between the private developers.

Another setback experienced in the course of the implementation, the government did not fulfil its part of agreement of providing the primary infrastructures due to the funding constraints. There are many of the plots in districts allocated for MHS for more about ten years without the provision of infrastructures made. For instance from the records of the DES shows that the FCDA cost of providing infrastructure to relatively flat and rough terrains in Abuja was estimated at about N10,000 and N17,500 per square metre respectively. Consequently, there were some OPS developers carried out development without the prerequisite physical infrastructure. It is based on the anticipation that such infrastructures would be provided later. The interview with the private developers (Interview, 2010) shows that the failure of the government to provide these infrastructures necessitated them to make such provision, like access roads, water, electricity main and transformers at their sites to make the estates habitable and which all add up to the cost of the developments, with serious consequence to unit price of the houses produced.

Institutional setting, regulations and control of PPP housing estates in Abuja

Of recent the PPP strategy enables the public sector to consolidate the realisation of building structure high standards in the urban areas. This is what the officials in Abuja reiterate that the private partners must built “standard housing”. To guarantee this, the operational PPP guidelines set high minimum standards to which all the OPS must conform and also along the line of Abuja master plan standard. Before now such goal has been criticised by scholars (see Morah, 1993; Ikejiofor, 1999a). Consequently, such urban planning contributes to poor exclusion and part of problem of housing the LIGs (Watson, 2009).

Nevertheless such declared goal was far from been realised under the OPS development. The developers were expected to submit their building and land use plans, drawings and the engineering designs of their internal network of services to relevant stakeholder departments for approvals. Unfortunately, the responsible agencies allowed the private developers went into development without prior approvals of their developments. For instance, the DES observed the consequence of such development made by the developers in the future would create the situation where the estates internal services infrastructures might not be able to integrate with the whole city infrastructures “due to differences in levels and in some situations , encroachment on the roads right of way”(FCTA, 2008:34-35). The records of the DCD prove further the above claims. The FCTA (2008) report shows that from the 79 private developer’s onsite, only 51 or 64.5 % made applications for development approvals and only 13 private developers’ secured requisite approvals of the DCD. The participating


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developers of MHS are carried out without securing the requisite approvals from the relevant authorities.

The observed discrepancies on the way the MHS was implemented, specifically without coordination and supervision, the report observed that “many of the buildings in the ... sites were poorly executed using poor materials” (FCTA, 2008:47-48). The poor nature of the workmanship prompts the DCD to demolish 127 structures in one OPS housing estate at Kafe district and in another instance some of the estates have registered cases of building collapse under the scheme (FCTA, 2008). Further investigations (Interview, 2010) demonstrated that some of the LIG that they bought the houses in the estate not for house per se, but for the sake of the land. These occupants later demolish the house and reconstruct new structures. The implication of these shows that the stakeholder departments were not carried along to coordinate and monitor the developments and in fact there was no existing standing committee that comprises of all the stakeholder departments responsible for the coordination, monitoring and review the performance of the MHS in Abuja, to ensure success of the scheme.

The development lease agreement that the developers were made to sign before the commencement of the project completely was discarded and disregarded, which ordinarily should have act as guide, standardisation and moderator of the projects between the parties of the contract. However, both actors were working outside the context of the agreement. There was failure from the relevant departments to enforce sanctions from the breaches of the development lease agreement. The end result shows that the private sectors were producing houses and infrastructures that were not in compliance with the specification of the development agreement signed. The mixed development densities in the form of detached, semi-detached, terraced and block of flats known with Abuja development was apparently ignored and dumped by the private developers. Much of the development by the private developers concentrates on high and medium costs, with very few units or none at all of low-cost, in the form of mansions, duplexes, bungalows and few units block of flats targeting the rich and none for the poor. Even the authorities of FCTA criticised such extensive low-density developments that were not commensurate with values of land in the city, considering the high cost of infrastructure provision in the city (FCTA, 2008).

Financing and accessibility of PPP housing estates in Abuja

Under the NHP reform, the FMBN opened what it is called “estate development window” to OPS developers and “NHTF loan window” to PMIs, to attract massive participation of both developers and house buyers in mass housing delivery in the country. The loan to be accessed by the OPS is to be use specifically for housing development, excluding the cost infrastructure provision. The loan attracts an interest rate of 10 % per annum (p.a), half of the prevailing rate in the private financial institutions, limited for a period of 24 months. The plan initially targeted only the NHF contributors. Therefore, the houses units’ prices must be between NGN1.5 million and NGN5.0 Million. If the developers were to develop outside the cost and housing plan units specified, must then be financed from their resources. Initially, to ensure that the NHF contributors secured the allocation, the developers were required by the FMBN to obtain and present list of such contributors’ commitment, through an accredited PMI. Perhaps this explained why all the OPS developers have one subsidiary PMI or have a retainer ship PMIs to do the marketing of the estate to the prospective buyers. Other requirements


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include REDAN membership and the developer must obtained bank guarantee. Only two of our six OPS developers’ respondents accepted to have access this loan from the FMBN. Others claimed to be using their company resources and bank loans.

Just like land grabbing observed above, many OPS jostle to access the loan, few with good intentions to use the resources for the purpose it is meant for, other see it as opportunity to grab from the FMBN as their share of ‘national cake’ (Housing, 2005). The result of the implementation shows the insincerity and fraudulent practice of some OPS have diverted the loan to other uses and some could not settle the loan as when due, and the amount could not revolve to other developers to access the fund. In fact from this attitude of OPS developers were indebted to FMBN to the tune of NGN11.24 billion (about USD$75 million) (NBFTopicsonline, 2009). And from the list of indebted OPS we can identify that those three of the OPS respondents that refused to disclose to us whether they have access the loan and are to be found to be indebted to the tune of about NGN2.5 billion (about USD$17 million) accounting for more than one- fifth of the total loan outstanding. The construction sites of MHS estates at the time of the field work there were very few of the developers on site and the developers attributed the suspension of the construction works to the factor of inadequate funds to continue the construction. Lately the REDAN have attributed the abandonment of the projects to the Central Bank of Nigeria (CBN) bank reform that made the banks weakened to provide funds and guaranteed to secure financing from the FMBN (Guardianonline, 2010).These factors notwithstanding, there were no adequate monitoring from the responsible institutions to ensure strict compliance, which allowed much of the funds to be diverted to other uses other than the purpose for which it is meant for. If the scheme had enjoyed the deserved adequate supervision it would have allowed the system to make adjustments where necessary to ensure success.

Housing possesses investment potentials and it is considered as such by many investors. The responses obtained indicate that more than 50 % and about 48 % of the respondents as renters and owner-occupiers respectively, and about 90 % source of the houses for rent were from individual owners. These findings suggest that many bought the houses for investment and also serve as the available options of cost recovery. More than two-third of the respondents was in occupation of the houses between 1 and 5 years and renting in Abuja, in most cases are for shorter duration and subject to renewal. By exploring this opportunity afford the investors to recover part of the money invested, generate income and perhaps to some serve as source of paying back some of the borrowed money used to acquire the house at the first instance. Also there are quite a number of studies that reaffirm the position of house serve as source of income, even among the LIG, that part of their premises as means of diversifying their source of income (see Sinai, 1998; Tipple, Korboe, Garrod & Willis, 1999). The data suggests that there are emerging investors acquiring the houses developed from the private OPS developers in Abuja, and the houses are rent out immediately. Against the background of housing shortage among the LIGs in Abuja, there is need to put forward measures to control the emergence of this trend in the interest of equity.

The recent study of Ndubueze (2009) finding indicates a ratio of about 3 to 5 Nigerian urban residents were having housing affordability problem. Also other researchers have shown that income level prove as the major factor that affect house purchase (Arimah, 1997; Udechukwu,2008) and sourcing of loans from formal financial institutions in Nigeria (Ojo & Ighalo, 2008). From the study data, the


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annual income of the respondents at the time of house purchase and now obtained shows that majority of the respondents (84.7 %) earn more than NGN100, 000 p.a and the remaining 15.3 % earned less than NGN100, 000. Using the NHP, 2006 bench mark, the result shows this the majority that bought the housing units are outside the bracket LIGs. Further details of the data shows only 24 % used FMBN facilities to purchase the houses. While 43 % source the money from personal saving and assistance from relations, bank loan and employer financing account for 27 and 6 % respectively. This shows the interplay of traditional source of housing for most Nigerians through accumulation of savings and assistance by borrowing from relations and friends occurring in the acquisition of houses on these estates. Considering the focus of the NHP, 2006 on mortgage financing, the implication of the findings indicate that not much has been achieved and perhaps the inadequate accessibility to this type of financing perhaps might be the explanation for negligible number of LIGs participating and dominance of the market by the emerging group of investors buying over the houses developed by the OPS.

Another finding of the study indicate that the developers offer choice of full cash and instalment payments, which the purchasers are expected to complete within a maximum period of between 3 and 6 months, which varies from the developers. The instalments payment terms regime also varies, but most common are 70%- 30%; 50%-30% and 20 %; 30 %- 40 % and 30 %. The data shows that more than 60 % and about 22 % made upfront payment of between 11 and 49 % and more than 50 % respectively. Contrary to Mabogunje (2004a, b) the finding demonstrate that the emphasis on cash and carry basis housing market has not changed with the housing policy that encourages home ownership through mortgage financing. This study further strength the findings of Struyk & Roman (2008) which shows under nascent mortgage there is low-incidence of mortgage financing with about 25 % and cash payment prevails with about 3 of every 4 house purchase in Cairo.

Summary and concluding remarks

The existing literature on the Nigeria housing policy over the years dwelt so much on the failure of the public housing scheme and its associated issues and there has being very little study on the PPP, particularly the participation of the OPS. This study examined the public sector and OPS role towards the provision of housing to the LIGs through PPP in Abuja, Nigeria. The finding of the study shows that it is not tenable to posit that the adoption of PPP as a strategy of housing the mass people of Nigeria has solved the problems of accessibility and affordability to housing among the LIGs. Conversely, it can be argued that the strategy of enablement, OPS has become a formidable and virtually impenetrable barrier to access to majority of Nigerians, despite government support of land and financing. The strategy has succeeded by further marginalising and deepening the exclusionist posture of the housing market to majority of Nigerians and effectively undermined and stunted the growth and development of the housing sector/ home ownership to near incapacitation. The spiral effect of the failure of this scheme has contributed significantly to the further densification of the informal settlements around the city.

Furthermore, this study has provided a number of insights into the institutional failures in an attempt to resolve the challenge of housing. The experience shows some of the procedures spelt were grossly violated. Therefore, the MHS scheme in Abuja was executed without proper procedure, adequate


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planning and implementation. The scheme also suffered from lack of coordination and monitoring from the relevant stakeholder departments of the FCDA and the worst originate from the ad hoc committee that first administer the scheme. This singular institutional failure brought about the confusion, lack of focus, coordination and encouraged non-compliance. It has shown the effects of weak institutional framework to successfully coordinate and monitor the progress of this onerous task of housing Nigerians. The ultimate goal of the whole exercise has become a mirage to the Abuja residents, but in particular to the LIGs. The worst outcome from the study shows that the scheme is completely disconnected from the overall framework of the country’s national housing policy, that prioritise to achieve housing for all Nigerians to own or have access to decent, safe, and healthy accommodation at affordable cost through mortgage financing. The study reiterates the need to further conduct in-depth reflections on ways to address this contentious issue of housing the LIG. Also the existing institutional framework needs to be overhauled and repositioned on ways best to address this challenge to realise the objective of the NHP, 2006 “to ensure that all Nigerians own or have access to decent, safe, sanitary housing accommodation at affordable cost”.


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Ppp and housing

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