Homelessness and the absence of social security systems to support homeownership remain critical challenges in Nigeria. With soaring inflation, the removal of fuel subsidies, and the devaluation of the naira, the dream of owning a home has become increasingly unattainable for many Nigerians.

According to data from the Federal Mortgage Bank of Nigeria, the country faced a housing deficit of 28 million units as of January 2023, with an additional 900,000 units required annually. By the end of 2024, over 30 million Nigerians were in urgent need of housing.

To address this crisis, the National Pension Commission (PenCom) introduced a provision under the Pension Reform Act (PRA) 2014. This allows Retirement Savings Account (RSA) holders under the Contributory Pension Scheme (CPS) to use a portion of their pension funds for equity contributions toward homeownership.

Since the policy’s implementation in March 2023, over 5,276 RSA holders have benefitted, with pension fund administrators disbursing N47.13 billion for mortgage financing by June 2024. This initiative underscores the transformative potential of the CPS in bridging Nigeria’s housing deficit.

Despite its promise, the policy is not without limitations. It excludes informal sector workers like traders and artisans who lack stable incomes. Additionally, strict eligibility criteria, such as a minimum of 60 months of cumulative contributions and a three-year minimum to retirement, limit access for many workers.

Another challenge is the affordability of housing. Rental costs for modest accommodations in urban areas often surpass the annual earnings of an average Nigerian worker. For instance, a single-room apartment can cost as much as N250,000 per year, while a two-bedroom flat ranges between N700,000 and N1.5 million.

Insurance companies can also play a pivotal role in addressing the housing crisis. Advocates suggest introducing “Shelter-Linked” insurance products tailored to different income levels in collaboration with property developers and financial institutions.

Life insurance policies, for example, can serve as collateral for obtaining mortgage loans. Additionally, compulsory insurance for buildings could mobilize significant investment funds for housing construction and provide financial protection against disasters like fire and building collapse.

While initiatives like the CPS mortgage financing are commendable, they cannot fully address Nigeria’s housing deficit. Advocacy groups urge the government to implement people-oriented housing policies and create affordable housing schemes that are accessible to all citizens.

Without a coordinated effort from the government, private sector, and financial institutions, the dream of homeownership will remain out of reach for millions of Nigerians.

The housing crisis in Nigeria is a complex issue requiring multifaceted solutions. Pension and insurance sectors have taken significant steps to alleviate the burden, but more needs to be done. Collaborative policies that address affordability, accessibility, and long-term sustainability are essential to ensure every Nigerian can have a place to call home.