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The 2025 housing budget allocated by the Federal Government has raised concerns about its alignment with President Bola Tinubu’s campaign promises, writes JOSEPHINE OGUNDEJI
With a total allocation of N98.13bn to the Federal Ministry of Housing and Urban Development, stakeholders argue that this figure falls short of expectations and contradicts the President’s earlier commitments to address the nation’s housing deficit.
Despite the government’s pledge to tackle the nation’s housing challenges through its Renewed Hope Agenda, the allocation underscores the widening gap between policy aspirations and financial prioritisation.
Out of the total budget, N88.14 bn has been allocated for capital projects, N8.78 bn for personnel costs, and N1.2 bn for overhead costs. A notable portion, N11.5 bn, is earmarked for constructing 20,000 housing units under the Renewed Hope Agenda. However, the project’s scale and timeline raise questions about its feasibility, as only 13,612 units are currently under development through the Renewed Hope Cities and Estates initiative, leaving the remaining units dependent on the 2025 budget for financing.
The proposed housing projects include the development of 250 housing units per site across 12 states, representing each geopolitical zone: Yobe and Gombe (North-East), Nasarawa and Benue (North-Central), Sokoto and Katsina (North-West), Abia and Ebonyi (South-East), and Delta and Akwa Ibom (South-South), totalling 3,000 units. Larger urban housing developments are also planned in the Federal Capital Territory (3,112 units), Kano (2,000 units), and Lagos (2,000 units), with additional projects underway in Enugu, Borno, Rivers, and Nasarawa. A significant portion of these units has reportedly reached advanced stages of construction, but doubts linger over the sector’s capacity to meet the 20,000-unit target within the projected timeframe.
When compared to the 2024 budget, which allocated N99.92 bn to housing, the 2025 budget reflects a marginal reduction. While recurrent expenditure in 2024 consumed N2.99 bn, capital projects received a higher allocation of N96.99 bn.
Notably, the Renewed Hope Agenda housing scheme received N18.2 bn, while the Federal Government’s national housing programme was allocated N8.49 bn, highlighting a more focused approach to housing initiatives. However, with escalating construction costs and over 80 per cent of Nigerians unable to afford homes due to low-to-medium income levels, the 2025 budget appears grossly inadequate for bridging the nation’s significant housing deficit.
Minister of Housing and Urban Development, Ahmed Dangiwa, had earlier called for a substantial increase in the housing budget to N500 bn yearly starting from 2025, emphasising that the current annual allocation of N50 bn was grossly inadequate compared to the estimated N5.5 trn required annually to address the housing shortfall.
He said, “Therefore, this would allow us to expand housing projects to cover the remaining 18 states and increase the unit count per state from 250 to at least 500; financing housing construction is expensive. So, we have devised creative and diversified funding strategies to create an impact under the Renewed Hope Agenda of Mr. President.
“While pursuing public-private partnerships, the government must also increase funding for the Renewed Hope Housing Programme. As a ministry, we have championed this advocacy, and there is now widespread recognition that the current N50bn annual budget for housing is grossly inadequate compared to the N5.5 trn required annually to address the housing deficit.
“Therefore, we have engaged the National Assembly leadership and received their support for increasing the annual housing budget to a minimum of N500bn, starting with the 2025 budget cycle,” he affirmed.
Housing deficit
To close the 28-million-unit housing gap, Vice President Kashim Shettima noted that it would take a staggering N21trn to bridge the housing shortfall. “Nigeria has a deficit of 28 million houses, and we will need N21trn to meet our housing needs,” Shettima stated at the groundbreaking for a 500-unit housing estate in Sokoto in 2023.
The Association of Housing Corporation of Nigeria’s President, Dr Victor Onukwugha, said the nation needs pragmatic approaches and appropriate strategies to tackle the housing deficit and affordable mass housing production to utilise housing as a veritable tool for economic recovery, thereby empowering the people to reduce unemployment in the society.
He said, “We can only achieve this onerous task through renewed government commitment to social housing. One such incentive is a specially crafted housing finance backed and supported by appropriate laws that will regulate the process both on the supply and demand sides at a single-digit interest rate. The use of local building materials should be deliberately encouraged and promoted to arouse acceptability by the general public, who have developed apathy for its use. The federal and state ministries of housing should concentrate on providing the enabling environment and supervision for the housing agencies to fulfil statutory mandates.
“With the rapid population growth in the country lies an opportunity for rising demand that can be converted to gain by the government if properly activated and harmonised. Until a deliberate attempt is made to address housing challenges of low- and medium-income groups, the housing deficit gap will continue to widen.”
Budget allocation paltry
In an exclusive interview with the Managing Director of Fame Oyster & Co. Nigeria, Femi Oyedele noted that the allocation to the housing sector was a scratch on the body.
He said, “Various experts in the housing sector have raised red flags over the paltry budget allocation to housing. While the Ministry of Finance was allocated the sum of N17.52 trn, the Ministry of Budget and Economic Planning was allocated N6.78 trn, Defence was allocated N2.92 trn, the Interior was allocated the sum of N1.13 trn, Police Affairs was allocated the sum of N1.27 trn, Education got N2.52 trn, and Health got N1.91 trn, and the Federal Housing Ministry got N88.14 bn. The Federal Ministry of Housing and Urban Development was not among the highest twelve ministries that got lion’s shares of the budget despite the huge housing deficit in the country. The N98.13bn allocated to the ministry is inadequate and unexpected.
“Even the N11.5bn allocated for the construction of 20,000 units under the Renewed Hope Estate is a scratch on the body, and the N250bn floated for the operation of the Ministry of Finance Incorporated Real Estate Fund is a child’s joke when compared with the housing needs of Nigerians. This has made the Federal Government engage the National Assembly leadership and receive their support for increasing the annual housing budget to a minimum of N500 billion, starting from this 2025 budget cycle. According to the government estimate above, two million housing units will cost N1.15trn. So, the N500bn that the Federal Government is talking about is still a far cry from the amount that can bridge the housing deficit in Nigeria.
“What the government needs to consider is that decent housing is not only a right of the citizens; it is a political statement in which other countries and international economic organisations like the World Economic Forum, World Bank, Human Habitat, etc. judge the economic development efforts of a nation; it is a shield against inclement weather, a store of value and national wealth, and can be used as a strategy for economic development just like Dubai-UAE and Doha-Qatar have done. The housing needs of Nigerians require a N2trn yearly allocation to be able to move near the housing target in the next ten years.”
In a similar vein, the treasurer of the Nigerian Society of Engineers, Victoria Island Branch, Babatunji Adegoke, said the budget allocation to housing was too minute to make any difference in the lingering housing deficit gap.
He said, “Considering the government’s ambitious target of constructing 50,000 housing units annually under the “Renewed Hope” scheme, the allocation per unit for the 20,000 units currently under construction dwindles to a meagre N575,000. This is insufficient to significantly impact the overall housing deficit, especially given that only about N1,360,000 per unit was allocated to the Renewed Hope Estate in 2024.
“If the proposed budget of N11.5 bn for the Renewed Hope Estate is passed, and considering the previous year’s allocation of N27.2 bn, the direct allocation per unit for the social housing projects would amount to approximately N2,000,000. This remains significantly inadequate to address the pressing need for affordable housing.”
Slum regeneration not in budget
A professor of estate management at the University of Lagos, Timothy Nubi, queried the budget and absence of provision for slum regeneration.
He quizzed, “Is there any provision for true slum regeneration in the budget? What is the budget for social housing as well as the key workers’ housing and other specialised housing like students’ hotels, etc.? Who has made efforts to analyse the budget for infrastructure, power, water, and transportation that are also indirect investments in housing? Should the government continue to compete with developers? Can developers deliver social housing? How can the housing sector access the 40 per cent allowed in the biggest fund in Africa—the National Pension Fund?
“Workers can access about 20 per cent of the savings in the pension fund to procure housing while in service. Has this been operationalised? How effective are our policy formulation, implementation, and evaluation? For how long should we continue to leave leprosy and be treating eczema? Can the government in our current situation do better? If we were disappointed, why can’t we explore other legitimate means that remained dormant for years? The answer lies with developing a robust housing delivery/finance system built on an integrated approach.
“Our leaders should quickly appreciate the nexus between the real estate market and the nation’s wealth. If they do, efforts will be made to clean the land market, promote and develop the industrialisation of the building sector, and grow a robust primary and secondary mortgage market. The capital market is the tested gateway for foreign investment into this big sector. It must be positioned to offer the long-term fund that the housing sector requires.”
No commitment to housing
Meanwhile, the Chief Executive Officer of Magnificent Choice Services Project and Engineering Ltd., Jeremiah Akinsele, said the Renewed Hope Agenda did not commit to the housing sector.
He said, “The Renewed Hope Agenda did not commit themselves to the housing sector; they are only being tricky. They spoke on the Land Use Act, which centres on collaboration with the state, but that one did not happen. Though there is a slight increase in the housing budget compared to the previous year, the allocation remains grossly inadequate to bridge the housing deficit, which requires trillions of naira. The agenda also promised to collaborate with the state and banks to give incentives; this is not also seen.
“One significant issue lies in land speculation, where individuals or entities allocated land by the government hoard or sell it at exorbitant prices without development. This practice drives up housing costs and prevents affordable housing delivery. Compounding this is the ineffectiveness of the housing finance system. Mortgage banks in Nigeria have not significantly financed housing projects over the past decade due to undercapitalisation and a lack of alignment with long-term housing needs. Additionally, there is limited transparency in how funds from contributory pension schemes and other sources are utilised for housing projects.
“The banking sector’s short-term focus further limits its ability to finance housing projects effectively. Nigerian banks operate as traders, focusing on immediate returns rather than long-term investments like housing. A housing-focused financial institution or a restructured mortgage bank system with better capitalisation and partnerships with international investors could bridge this gap. This institution should prioritise transparency, allowing citizens to understand who benefits from housing loans and on what terms. Such an approach could also involve merging with international housing financiers to attract more funds and foster large-scale development.”
Akinsele furthermore noted that prioritising housing development has the potential to address broader socio-economic issues.
He added, “Housing construction creates employment opportunities across various skill levels, from labourers to skilled professionals, thus reducing unemployment and associated security challenges. Expanding housing projects can also boost GDP through increased economic activity in the construction sector.
To maximise this potential, development should not remain focused solely on high-income urban centres like Lagos and Ikoyi. Instead, attention must shift to suburban areas, providing affordable housing for low-income earners. Long-term mortgage repayment plans spanning at least 20 years could make homeownership feasible for more Nigerians while driving sustainable urban development.
“The Federal Government is working in a few states called Renewed Hope Estate, which is a right step in the right direction, but my major issue is that what are the state governors doing in terms of housing affordability and land affordability or rent-to-own except Lagos and Ogun states? Governors are in charge of land in their states; they should do more, and the federal government should partner with more private sectors to deliver more housing by giving them subsidised land and pushing for price control of building materials from the manufacturer. On building materials, the government needs to have a town hall meeting with manufacturers of building materials to give either incentives or a tax holiday for them to reduce the cost of materials.
“Finally, housing development in Nigeria must account for the realities of the labour market. Workers in suburbs often commute to urban centres, making affordable housing in suburban areas crucial. Government policies should prioritise subsidised housing projects to bridge the gap between housing demand and affordability. While the housing sector holds immense potential for growth, resolving security and homelessness. Hence, realising this potential requires the government to adopt a holistic, transparent, and inclusive approach to housing finance and development.”
