The Federal Government is set to establish a N1 trillion ($654 million) housing fund aimed at providing affordable mortgages to Nigerians, as part of efforts to bridge the country’s estimated 28 million homes deficit, Bloomberg reports.
Finance Minister Wale Edun disclosed this during a media briefing on Tuesday, revealing that the first phase of the fund-raising initiative includes a 40-year concessional loan from the World Bank’s International Development Association (IDA) at a 1% interest rate.
According to Edun, the government secured matching contributions from local pension funds, banks, and insurance firms, raising a total of N250 billion in the initial phase.
“This fund will enable Nigerians to access mortgages at single-digit and low double-digit interest rates, making homeownership more attainable,” he said.
Nigeria’s Housing Crisis
Nigeria, Africa’s most populous nation, faces a severe housing shortage, with most real estate transactions conducted in cash—a system that has fostered corruption and exploitation by fraudulent operators. Currently, mortgages account for less than 1% of the country’s GDP, highlighting the need for structured financing solutions.
The Federal Mortgage Bank of Nigeria estimates that the country requires at least 28 million additional homes to meet demand. The new fund is expected to stimulate a construction boom by providing developers with guaranteed off-takers, Edun noted.
Road Infrastructure Projects Also in the Pipeline
In a related development, the Finance Minister announced that the government is finalizing contracts with private investors to construct and manage 40 major roads spanning 5,000 kilometers (3,100 miles).
The Africa Finance Corporation (AFC), a Lagos-based multilateral financial institution, is among the key investors in the road infrastructure initiative.
More insights
Last week, the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) successfully closed its N250 billion pilot fundraising, marking a major step towards bridging the country’s housing finance gap.
- The N100 billion Series 2 issuance was fully subscribed, reflecting strong demand from institutional investors and affirming market confidence in the fund’s structure and long-term potential.
- This achievement follows MOFI’s initial N150 billion investment in Series 1, with the Series 2 offer attracting robust private sector participation.
Minister of Finance and Coordinating Minister of the Economy stated that the successful close of this pilot phase marks the beginning of a long-overdue transformation in Nigeria’s housing sector, according to a statement from MOFI.
Edun noted that the full subscription of Series 2 demonstrates pent-up demand for structured housing finance solutions and investor confidence in MREIF as a sustainable investment vehicle.
