The office of the Auditor General for the Federation has said that low Income earners in the country cannot afford the affordable houses being built for them by the Federal Government under the Affordable Housing programme.
According to an audit report of the programme which began in 2016 with the incorporation of the Family Homes Funds Limited, over 1,400 houses which has been completed under the programme have not been sold
The audit which cover the period 2016 to 2018 was submitted to the Clerk to the National Assembly via a letter dated 3rd August 2022 and signed by the immediate past Auditor General, Adolphus Aghughu who retired from service in September 2022.
The report cited by The Nation said many of the houses have been left unsold because the costs of such houses are above the reach of the low-income earners in the country.
FHFL is a Company established in 2016 by the Federal Government to provide Affordable/Social Homes for low-income earners in Nigeria with the Federal Ministry of Finance, Budgets and National Planning (FMOFB&NP) and Nigeria Sovereign Investment Authority (NSIA) as founding Shareholders.
The company is responsible for providing homes for low-income earners at the lowest possible price they can afford.
The report said that the total capital funding of FHFL in the three years period covered in this audit (2018 to 2020) amounted to N65,000,000,000 00 (Sixty five billion naira) which represents 13% of the N500,000.000.000.00 (Five hundred billion naira) seed capital promised by the Federal Government for provision of affordable homes for low-income earners in the country.
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Quoting Shelter Afrique, a Pan-African Real Estate Finance Institution, the report said the housing deficit in Nigeria is estimated to be 22 million as at January 2020 with a yearly growth rate of 20 percent.
It said further that estimates of output in the formal housing sector ranges from 100,000 to 200,000 housing unit per year, which covers only a fraction of at least, 700,000 units required per year to keep up with the growing population and urban migration.
It said “The audit was motivated by the huge deficit in the housing sector in Nigeria which past governments have expended a lot of money to reduce by initiating programs and schemes, but most of which have failed and government funds remain unrecovered.
It said further the FHFL bought and built homes without recourse to how the government would recoup the funds because they did not have a financial policy that gives a clear direction, effective planning, and guidelines on how the funds should be utilized/recouped when it commenced operation in 2016.
It also said that some of the houses built in some of the states and already completed were without the required facilities and are not easily accessible to subscribers
It said that out of the houses completed only 675 have been sold as at 31st December 2020, adding that the extent of sale of the houses was a clear indication FHFL did not conduct needs assessment to ensure that homes built are affordable to low-income earners
It also said that the company awarded the contract for the buildings without taking into consideration the capped cost limit, adding that the contract awarded was higher than the capped cost limit stated in section 7.4 (1.5) of the FHFL Strategic Plan 2020 — 2024.
The report queried the non-availability of policies or guidelines on how funds invested in the provision of homes will be recouped, saying “the FHFL Financial regulations did not spell out how to recoup funds from home investments.”