THE ROLE OF PRIVATE PARTNERSHIP IN HOUSING FINANCE MAINTENANCE IN NIGERIA

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THE ROLE OF PRIVATE PARTNERSHIP IN HOUSING FINANCE MAINTENANCE IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Introduction

By 2030, it is anticipated that about 3 billion people or roughly 40 per cent of the world’s population, will lack proper housing. In the developing economies, housing supply is being limited by poor governance systems and human resource deficiencies, as well as by institutions and regulations which are either obsolete, lacking in capacity, or poorly informed (UN-Habitat, 2015). The scale of the housing crisis facing Nigeria is unprecedented. Each year, Nigeria builds about 600,000 fewer homes than are needed, adding to the current dearth of 23 million that has been growing for decades. This shortfall has been accrued because of years of undersupply. In an effort to increase affordable housing delivery in Nigeria, this research suggests that the use of public private partnership (PPP) as a tool, if applied effectively, could increase private sector investment and fuel development initiatives. A key motivation is the opportunity for cash strapped government to tap into new private financing sources to meet the costs of delivering adequate housing.

Policy debates on housing are still very much dominated by how the nation can best support the low-middle income housing market (Sa-Aadu, 1984). The complex nature of the term affordable housing is reflected by the fact that affordability is both a function of housing demand and supply factors (Bieri, 2012). A supply side housing program typically sidesteps the private housing market while a demand side program relies on the discipline of the market to promote society’s affordable housing goals for the needy. The Nigerian government has been engaging in demand side approaches (such as Refinancing Mortgage Company and Federal Mortgage Bank) for years to promote home ownership without major significant success. This research however examines a supply-side strategy to attack the affordable housing problems faced by emerging Nigerian middle class. This involves giving a variety of assistance to those people and businesses involved in the delivery side of the housing sector (Berry, 2002).

The central focus of this thesis is therefore the creation of an effective public private partnership for the provision of affordable housing in Nigeria. The intent of this chapter is to set out the nature and scope of the thesis as well as to outline its structure. The rationale for affordable housing delivery, which is the motivation for the thesis, is presented in this chapter, as is the case for public private partnership (and the beneficiaries – emerging middle class Nigerians). Key concepts are elucidated, albeit briefly, in this chapter but dealt with more elaborately in the rest of the thesis. The aim of the research and the concomitant research questions are also the subject of this chapter. The significance of the research is also presented in the chapter and finally, a brief summary of the following chapters of the thesis is given.

1.2 Rationale for Affordable Housing Delivery

Housing has been identified as one of the world’s prevalent problems. The international community recognises that increasing affordable housing is one of the major development challenges of the twenty-first century (Kothari, 2005, Kissick et al., 2006, Walley, 2010). From slum residents in the developing countries to middle-income households in expensive global capitals in developed countries, hundreds of millions of people struggle to find decent housing that they can afford without severe financial stress which has social as well as economic consequences (Woetzel et al., 2014). Globally, around 1.6 billion people live in substandard housing and 100 million are homeless (Kothari, 2005). Every week more than a million people are born in or move to cities in low-income countries, driving up the need for new and better housing (Kissick et al., 2006). Estimates of total new housing need in Africa have been set at around 4 million units per year with over 60 per cent of the demand required to accommodate urban residents and this is likely to increase to 5 million per year (Walley, 2010). This translates into nearly 14,000 homes per day in order to accommodate the expected urban population growth.

Inadequate affordable housing, particularly in developing countries like Nigeria, is a constraint on economic growth and a persistent challenge for governments. Nigerian governments have historically struggled with the challenge of housing its citizens and providing housing at a reasonable cost for low and middle-income people. For years, Nigeria has underprovided affordable housing. In Nigeria, total current housing production is at about 100,000 units per year, for a country of nearly 170 million. Nigeria needs about 720,000 additional units each year, with the federal government estimating that there is a deficit of 23million homes in Nigeria (FGN, 2013). For some of the major urban centres (such as Lagos, Abuja, Ibadan and Kano), housing demand is growing at about 20 per cent per annum (Okonjo-Iweala, 2014). In 2010, it was reported that 85 percent of the urban population lives in rented accommodation, spending more than 40 percent of their income on rent (Kokularupan, 2010). It is also noteworthy that 90 per cent of houses in Nigeria are self-built; this may be due to a general lack of affordability and also the difficulty in obtaining mortgage financing (FinMarkTrust, 2010, CAHF, 2012).

While the dire shortage of affordable housing has been recognised internationally as a deep and pervasive problem, strategies to address this do not seem to have been thoroughly examined (UN-Habitat, 2005). Some of the policies, institutions and regulations which the Nigerian government has put in place since independence in 1960 have been hindered by frequent changes of government and this has tended to disrupt policies and programmes before they have had a chance to take hold (FinMarkTrust, 2010). Although these initiatives may have had some impact, they have not been sufficient or effective enough to deliver housing for all Nigerians. Financing affordable housing is important if the world is to secure environmentally sustainability, economic prosperity, cultural diversity and social equality (UN-Habitat, 2005). In addressing these challenges, there is need for new organisational arrangements and commitments across sectors (government and private sector) (Brinkerhoff and Brinkerhoff, 2011). With these new combinations of desired resources, it is expected that overall effectiveness in the pursuit of the objective of affordable housing delivery might be enhanced.

History has shown that, nations that fail to house their people have risked urban unrest: poor-quality housing outputs contributed to rioting in Rome in 75 BC, Paris in 1848, several US cities in 1967, and Morocco in 2003 (Ernst and Young, 2013). Affordable housing has always been part of the Nigeria housing policy statements. ‘A good home for every citizen’ has been part of the national social contracts (NHP, 2012) but that is a promise governments could not keep. For decades, however, governments have been falling behind: the systems in place, cannot keep up with growing and diversifying economies and the long-predicted boom in urban population. With increasing population pressures, urbanisation and other developmental trends, the government’s ability to address the affordable housing needs adequately through traditional means has been severally constrained. To continue with the current system would be to condemn a majority of the populace to homelessness, or at best unsuitable housing. In most developed economies, the housing sector is seen as an important sector for stimulating economic growth. Many housing-related activities contribute directly to achieving broader socioeconomic development goals (Kissicks et al, 2006).

Housing is also a key driver shaping the social sustainability of societies, a vehicle for social inclusion. In fact, social scientists (Karn and Wolman, 1992) have observed that one key way to evaluate a nation’s housing system delivery is whether, and how much, it contributes to social stability. Therefore, the citizens’ sense of social cohesion is often directly connected to the delivery of sufficient housing they could afford. Housing is what creates and defines nations. A growing body of research shows that access to good quality affordable housing supports not only the nation’s households, but also has positive nationwide benefits related to economic competitiveness, health, education and public well-being (MAH, 2011). In addition, clean, warm housing is an essential factor in the prevention and care of the diseases of poverty like HIV/AIDS, tuberculosis, diarrhoea, and malaria (World Bank, 1993, Reeves, 2005). Thus, there is need for innovation by both the public and private sectors, to work together to deliver the housing the country needs and the citizens can afford. As such, affordable housing is essential to the continued success, growth and competitiveness of Nigerian state.

Although Nigeria has 84 primary mortgage banks (PMBs) and 20 commercial banks, most Nigerians usually, depend on private savings to pay for their homes. The size of the mortgage market has grown from N54billion (US$342 million) in 2006, to about N224billion (US$1.42 billion) in 2011 yet, this still accounted for only roughly 0.5% of GDP. For commercial banks, mortgage loans accounted for less than 1 per cent of their total assets. Nigeria’s Federal Mortgage Bank (FMBN) manages a National Housing Fund financed mostly by contributions from public sector workers. But results from this fund have been disappointing: as at August 2012, only about 12,000 mortgages had been provided for a total of 3.8 million eligible contributors (World Bank, 2013). This has contributed to the dearth of affordable housing in Nigeria. Various (of the 36 and the Federal Capital Territory) state governments also have housing development agencies, but these institutions have had very limited impact. Moreover, a number of administrative and bureaucratic, operational and financial capacity problems are hindering the development of the mortgage industry and the housing sector. These problems are well known and well documented but what needed is a plan to tackle the challenges.

Housing is expensive to provide in Nigeria. The construction cost for a simple threebedroom house in Nigeria is about N8million (or US$50,000); compared to US$36,000 in South Africa and US$26,000 in India (Okonjo-Iweala, 2014). The costs are high for three reasons: high costs of building materials, high costs of skilled labour, and the costs of associated public infrastructure such as sewers, roads, etc. About 75 percent of households in Nigeria’s urban areas live in dwellings constructed with concrete. Cement prices in Nigeria are about 30-40 percent higher compared to neighbouring countries or to the world market prices due to epileptic power supply ((Ibem, 2011, Okonjo-Iweala, 2014). Nigeria therefore needs to explore the greater use of local inputs and alternative building materials, which are cheaper, of good quality, and environmentally friendly.

Affordable housing is usually viewed as non-market housing provided to those whose needs are not met by the market (DCLG, 2006). Housing is however expensive to provide and people whose incomes are low are likely to find it difficult to procure adequate housing through normal market mechanisms (Satsangi et al., 2001). This suggests that, there is a gap between the need for housing and the capacity to provide the desired housing type, resulting in an effective demand crisis for affordable housing in the country (FinMarkTrust, 2010). Walley (2010) conducted research into various options to provide housing in Nigeria for different income levels. The research found that none of the studied areas was delivering solutions for the needs of low-middle income households. The study recommended commissioning a detailed study on a framework for Housing Public Private Partnership Schemes, and advocated a more coordinated and inclusive housing policy. In line with previous studies, the research identified inadequate access to finance, slow bureaucratic processes, and the high cost of land and building materials as major factors negatively affecting housing provision in Nigeria.

The key issue here is that there is still a shortage of affordable housing in Nigeria and the performance of both public and private sectors in affordable housing delivery has been inadequate. The widening gap of effective demand over affordable housing is not arising because governments do not care; rather, it is proof that government’s existing frameworks are not adequate. It is time for government to make innovative changes in the delivery models and, in particular, to shift into a more outsourced, public private partnership oriented approach on both the supply side (new homes) and the demand side (financing products).

It is more apparent that the scale of housing problem in Nigeria and the finance requires to address the problem exceed what governments are prepared to commit. As stated earlier, governments and private sectors are not delivering enough homes and some of the available ones are often for high income earners. As a result, relying solely on government programs for the provision of housing is now unsustainable. Other options need exploring. Since governments are ill-equipped to deal with the problem, they must explore new ways to ensure that limited public resources are used in the most efficient way. One initiative proposed as a possible solution to address the provision of affordable housing is public private partnerships. The remainder of this thesis focuses on this initiative.

“While the dire shortage of affordable housing has been recognised internationally as a deep and pervasive problem, strategies to address this have not been thoroughly addressed” (UN-Habitat, 2005). Providing affordable housing for citizens is a perennial challenge for nations around the world (Woetzel et al., 2014) The problem of affordable housing is particularly severe in Nigeria, where a variety of housing initiatives have been tried and found wanting. The most recent involves Public Private Partnerships (PPP). PPPs are contractual relationships between partners in different sectors. Nigeria has recently experienced political transition, and the government plans to pursue private sector participation to accelerate access to housing to drive economic growth. This comes in the context of growing financial constraints. Good example is the drop in the price of oil over the past year has severely limited government revenue, since oil accounts for 70 per cent of the government’s income (Goussard, 2015). Growing resource constraints have increased the need for, and willingness of, organisations to work together (Alter and Hage., 1993, Christianson et al., 1995). However, evidence on whether PPP provides truly “win-win” solutions, (succeeding where both governments and markets have failed), is far from clear (Biermann et al., 2007). Given their diverse nature and ranging focuses, more needs to be done to analyse the effect of PPP project, especially in the provision of affordable housing in Nigeria.

The need for affordable housing investment continues to grow in virtually all countries; governments are recognising the value in establishing partnerships with the private sector to increase the provision of affordable housing projects (Austin, 2008). There is consensus among policy makers that to achieve solutions to the affordable housing crisis at scale, major support and involvement by the private sector is necessary (Davis, 2006). At their best, private funds ease budget constraints (Sanusi, 2012), for example, in the USA; budgetary constraint was the driving force, which prompted community based non-profit housing developers to forge creative alliances with various parties to finance affordable housing (Pomeroy et al., 1998, Davis, 2006). The same was true in the UK (Webb and Pulle, 2002, Boussabaine, 2007), Canada (Moskalyk, 2008) and Australia (Susilawati, 2009).

The private sector cannot however produce housing that is affordable to low-middle income households without some form of subsidy (Pomeroy et al., 1998, Suchman and Sowell, 1997). Even for the construction of modest housing units, the break-even rents are higher than what is considered to be affordable for many low-income households (Moskalyk, 2008). Similarly, the withdrawal of government funding has shown that housing authorities lack sufficient funding and resources to produce low-cost housing on their own. Therefore, based on the public sector lack of sufficient funding and current market conditions, it appears that affordable housing provision will require a partnership between public and private sectors. This observation is echoed in research literature and the trend toward Public Private Partnerships has been noted in the UK, Canada, Australia and the United States (NAO, 2010, Pomeroy et al., 1998, Berry et al., 2006).

With the failure of the most recent attempt at national housing reform and the growing financial pressures, the public and private sectors are looking more often to these types of partnerships to respond to housing needs (NHP, 2012). Despite the positive rhetoric surrounding their perceived role, however, whether or not partnerships will prove a model of effective delivery for affordable housing in a new world of complex interdependence required a systematic examination. The argument that PPP effectively address global challenges is still rather a normative idea than a methodologically sound and theoretically grounded empirical fact (Homkes, 2011). Initial researches suggest that partnerships have indeed led to substantial gains and contributed to addressing these pressing global problems (Caines, 2005, Buse and Tanaka, 2011). The cumulative positive impact of this is perhaps neither established nor properly tested (Biermann et al., 2007). Therefore, more needs to be done to systematically study the impact of these unique collaborative partnerships.

PPP could only be successful if the right enabling environment is created including political stability, enforcement of a legal framework, and increased transparency and openness to foreign investment coupled with an institution that has strong corporate governance and is shielded from undue political interference. However, the capacity to appraise and implement PPP projects is still relatively limited, resulting in incomplete project preparation, inadequate financial models and business plans, and a general lack of experience in developing high quality concession contracts and most particularly monitoring their operational success. Nigeria needs to do more to address these weaknesses (Sanusi, 2012). In Nigeria, according to (Okonjo-Iweala, 2011), every project takes at least twice as much time to complete because of regulatory failures, lack of consensus and in the end the projects are the most costly compared to other neighbouring countries. The private sector has been shown to be more willing to enter into partnership where regulatory framework is clear and in a structured environment. This is needed in Nigeria to facilitate the development of effective PPP.

While there are many positive aspects to the emergence of PPP, there remain many uncertainties and some causes for concern (Teiseman and Klijn, 2002). Research is needed to learn more about what makes a partnership effective and in particular what organisational forms and management arrangements represent best practice for governance and what factors contribute to partnership effectiveness on the ground. Recent research says harnessing the potential and minimising the risks of partnership failures relies on the systematic identification of potential pitfalls associated with PPP and the use of these findings to develop appropriate guidelines, procedures and safeguards (Hayford, 2013).

Public private partnership has long been advocated and analysed as a potential organisational solution to pressing societal problems that call for the comparative advantages of government, business, and civil society (Brinkerhoff and Brinkerhoff, 2011). Addressing these challenges, taking advantage of the opportunities they provide, and mitigating threats calls for new organisational measures and unwavering commitment across sectors (public and private). Broadbent et al (2003) note: ‘partnerships are no panacea, for they bring their own technical, organisation and political challenges’. However, if the government cannot deliver the affordable housing needed by the Nigerian public with the available resources, there may have to be a review of the functions undertaken by the government.

Nigeria has experienced mixed success in the development and execution of PPP projects, and has recently taken concerted action to improve aspects of the operating environment or to boost institutional capacity. The country has undergone significant regulatory reform, with the ratification of new PPP acts, while at the same time developing institutional frameworks from the ground up. Although the country has had some experience in engaging private-sector parties in the development of power facilities with relative success. However, regulatory frameworks and institutional arrangements are not yet robust. There is however, a good level of political will towards deploying PPP as a means of boosting much needed affordable housing investment (Ohiani, 2014). Despite weak regulatory frameworks and underdeveloped institutions, the attractiveness of the country’s investment proposition is critical, as is the imperative to get the rules and the institutions right. Prospects for Nigeria are bright, given the increasing attractiveness of its business environment and the growth of increasingly sophisticated domestic financial facilities (AFDB et al., 2012).

Affordable housing is an overlooked opportunity for developers, investors, and financial institutions. To replace today’s substandard housing and build additional units needed by 2025 would require an investment of $9 to $11 trillion for construction; with land, the total cost could be $16 trillion. Of this, $1 trillion to $3 trillion may be required from public funding (Woetzel, et al, 2014). These findings indicate that new approaches are needed since attempts to date to provide affordable housing have yielded inadequate results. The governments need to think more broadly and creatively about a solution to satisfy the need for affordable housing that can accommodate citizens of all income groups and their changing requirements that might connect them to employment and society. To turn these aspirations into reality, governments will need efficiently functioning delivery mechanisms.

Affordable housing cannot be fully effective without an efficient delivery mechanism to manage and fund affordable housing initiatives. The affordable housing delivery mechanism is how the government turns its goals, aspirations, and policies into action. To ensure this is achievable, policy makers need to collaborate with the private sector, choose the housing delivery model(s) that fits the local context, identify all possible sources of funding, and establish rules for governance, including deciding how affordable housing benefits will be allocated and in doing this manage the performance of housing-related regulatory processes (Woetzel, et al, 2014). In this arrangement, the public sector is an active partner with the private sector, rather than a passive, regulatory actor. Public private partnerships could be an influential scheme for providing affordable housing by leveraging the best of both the public and private sectors, wherein the government enlists a private sector partner to deliver affordable housing under agreed-upon conditions.

Overall, this public private partnership shows that there is a strong economic case for expanding the private sector involvement in affordable housing delivery in Nigeria. New provision may require increased investment in public private partnerships, but they could be capable of delivering important improvements in the affordability and efficiency of affordable housing delivery, and improving the Nigerian housing system’s capacity to cope with the impact of the housing deficit.

Why Emerging Middle Class is Important

The focus of this research is to examine how PPP could be effectively used to deliver affordable housing for emerging middle class Nigerians. Many recent studies have focused on housing for low-income earners (Wapwera, Parsa and Egbu, 2011; Abdullahi and Abd Aziz, 2011; CAHF, 2012; Ibem, 2011 and Adedeji and Olotuah, 2012); however, there is little research on affordable housing provision for middle class in Nigeria (Okpoechi, 2014). Mabogunje (2011) and Awotona (1990) observed that, this middle-income group (which forms the bulk of the working population) suffers from the shortage of housing stock in Nigeria; translating their aspirations into effective demand is challenging. Nigeria’s middle class has emerged along with expansion of the private sector industries like banking, telecommunications and services, centred in urban areas. A study carried out by Africa Development Bank, estimated that Nigeria’s middle class accounted for about 23% of the Nigerian population (39.9m) (Ncube et al., 2011) (See Figure 1 – Page 12). According to Hever (2007), an equitable society is one in which the middle class is large and the upper and lower classes are small. All over the world, the existence and sustenance of the middle class are perceived as very important factors in measuring the extent of economic well-being of a country’s working population (Li, 2006). For many years, it was apparent that high rate of poverty and income inequality have threatened the Nigerian middle class with extinction (NBS, 2007). In order to sustain and improve the middle class in Nigeria, Nigeria Bureau of Statistics suggested that Nigeria need to boost its homeownership program for middle class. This invariably, might reduce social inequality in Nigeria (NBS, 2007).

Many of the emerging middle class in sub-Saharan Africa are not “income-secure”. They are at the risk of slipping back into poverty in the event of some exogenous shocks (Ncube et al., 2011). Where the secure middle class is small, it is also likely to be more economically dependent on government, either directly in the case of civil servants or indirectly in the case of employees of government-owned companies and other enterprises heavily dependent on government subsidies and political largesse (Birdsall, 2007). Both federal and State governments in the country are grappling with how to address the need for more housing that is affordable for their civil servants. With little or no subsidies available, huge construction costs have made private developers focus on building luxury rentals, not low-middle class housing.

Housing has become severely unaffordable for much of the Nigerian middle class in urban areas, and particularly for new working families (Ibem, 2011); this is negatively affecting their standard of living. Without an effective and coherent policy promoting affordable housing and a strong commitment by various levels of government to promote and strengthen a middle class in Nigeria, the prospects of a vibrant, stable, and affluent middle class may be less than encouraging. The failure to establish a strong middle class in Nigeria may also negatively impact economic growth, the goal of a more consumptionbased domestic economy, and the hope of building a harmonious and civil society in Nigeria. Sound policies encouraging the growth of the middle class are necessary to ensure sustainable development in any country (Li, 2010). This is particularly important for a populous country like Nigeria.

The middle class is widely acknowledged to be Africa’s future, the group that is crucial to the continent’s economic and political development. Recent estimates put the size of the middle class in the region in the neighbourhood of 300 to 500 million people, representing the population that is between Africa’s vast poor and the continent’s few elite (Ncube et al., 2011). It is also argued that Africa’s middle class is strongest in countries that have robust and growing private sectors (Ramachandran et al. 2009). Africa’s middle class is not only crucial for economic growth but is also essential for the growth of democracy (Mahajan, 2009). Whilst the affordable housing problem for low-income group is huge, but the current trends are that the problem is now spreading to middle-income households, families earning between $6,000 and $7,000 per year (Ncube et al., 2011 and Robertson et al., 2011). These middle-income families have less money to spend on other goods and services and that creates huge losses across the economy. Some middle-class households choose to move out of major cities in search of more affordable housing, depriving the state of young, skilled workers who represent the backbone of the workforce and the state’s future (Lutz, 2015).

One advantage of delivering affordable housing for emerging middle class is to create housing opportunities near centres of job growth. Thus, this could promote balanced urban growth that strengthens existing cities (Katz et al. 2003). Affordable housing can offer development opportunities for the housing sector, and it can be a stabilising factor for economic development. It can also facilitate urban development and regeneration, contribute to ecologically sound standards in new construction and refurbishment, stabilise migration flows and reduce social tensions (United Nation, 2010). Additionally, projections by the African Development Bank in 2011 suggest that by 2030, countries like Nigeria, Ethiopia and South Africa, are expected to provide the largest number of middle income in Africa (Juma, 2011). It thus becomes important that for there to be a continued rise in the middle class in Nigeria, policies that bolster the incomes of those already in the middle class would have to be introduced. Housing is one such policy, as it has the capacity to accelerate the reduction of poverty, and improve the living conditions of the people.

Statement of the problem

Affordable housing has become a great concern for both developed and developing countries. To date, there is still no commonly agreed upon definition of ‘affordable housing’, and there are still major gaps in the knowledge on how various countries such as, Nigeria can effectively tackle its growing housing challenge and what more can be done to increase provision (Walley, 2010; Woetzel et al., 2014; CAHF, 2015). The primary reason for affordable housing is to ensure equity in accessing housing, which is generally regarded as a basic human need (UN-Habitat, 2008). Government involvement is inevitable due to the failure of market housing to adequately meet housing needs. The quality of housing provision plays a decisive role in the economy of a nation and health status of its citizens. Many health problems are either directly or indirectly related to housing because of inappropriate construction materials, the equipment installed, the size or design of the individual dwellings and the quality of the internal environment (Butler-Jones, 2009).

Evidence has shown that those who have the least resources at their disposal suffer the worst housing conditions (Krieger and Higgins, 2002; Bonnefoy, 2007). Dealing with poverty will thus remain a most important element in any housing policy, either through specific housing programmes, or through specific economic policies. Looking at available knowledge on housing strategies, The World Bank observed that: “While the dire shortage of affordable housing has been recognised internationally as a deep and pervasive problem, strategies to address this have not been thoroughly addressed” (UN-Habitat, 2005). The World Bank strongly believes that more research on housing strategies will bring about better solutions for local, regional, and national policy-making.

Similarly, the Report of the Presidential Committee on Urban Development and Housing opined that “the strategies and programmes of successive governments did not satisfy the quests of the average Nigerian for housing mainly due to lack of adequate resources and political will” (NHP, 2012). Walley (2010) conducted research into various options to provide housing in Nigeria for different income levels. The research found that none of the studied areas were delivering solutions for the needs of low-middle income households.

The study recommended a detailed study on a framework for PPP housing schemes, and advocated a more coordinated and inclusive housing policy. However, this shows there is an urgent need for a renewed commitment; redirection of focus and private sector participation if achieving an adequate affordable housing objective is to be achieved.

The several housing policies and programmes previously developed in Nigeria, though well intended, have made little impact. The small achievements made to meet the needs of the low-middle income groups have usually been taken over by higher-income groups (Adedeji and Olotuah, 2012). Ogunshakin and Olayiwola (1992) traced the causal roots of the failure of affordable housing policy in Nigeria to the flaws in the institutional mechanisms of decision making and implementation processes. On provision of housing through PPP in Nigeria, Oyebanji, Akintoye and Liyanage (2011) also revealed that poor structure and lack of well-defined policy guidelines have been the underlying issues in Nigerian housing sector (Oyebanji et al., 2011).

The effort toward closing the affordable housing gap will not be possible if the Nigerian government do not have effective ways to follow through with affordable housing initiatives. Housing is very important, and requires innovative approaches. It is clearly necessary to approach housing in a cross-sectional and multidisciplinary way. The literature search has identified the role the private sector could play in reducing the supplydemand gap of affordable housing through productivity and expertise. The best housing strategy will fail to accomplish its goals if it is not effectively implemented. In order to encourage sustainable affordable housing delivery, policy makers need to create a supportive environment, which could play an important role in attracting investments into PPP for affordable housing delivery. A conducive environment is a critical factor in determining the efficiency and effectiveness of PPP because it not only affects the process, but also influence the interactions, decisions and outcomes of any PPP projects.

In summary, the existing literature on the use of PPP for the provision of affordable housing in Nigeria have identified the causal roots of failure as flaws in the institutional mechanisms of decision making and implementation processes (Ogunshakin and Olayiwola, 1992). They have revealed that poor structure and lack of well-defined policy guidelines have been the underlying issues (Oyebanji, Akintoye and Liyanage, 2011). There is, however, a gap in knowledge in the reasons for these flaws, for the poor structure and the lack of well-defined guidelines. This means that the problem situation is not well understood let alone the knowledge of the problems and constraints that exist within it. The knowledge gap therefore is the understanding of the problem situation, which the research aims to achieve.

Once this knowledge gap is filled, it would enable the development of a more robust and comprehensive framework for implementation of PPP projects which would help to foster confidence and thereby encourage investors to get involved.

Research Objectives

1. To identify the mechanisms for affordable housing delivery?

2. To identify the issues, problems and constraints that hinder the performance and success of using Public Private Partnership for affordable housing delivery in Nigeria?

3. To know how Public Private Partnership increase the provision of affordable housing in Nigeria?

Research Questions

The following research questions are raised for this study:

1. What are the factors that facilitate the establishment, performance and success of Public Private Partnership as a mechanism for affordable housing delivery?

2. What are the issues, problems and constraints that hinder the performance and success of using Public Private Partnership for affordable housing delivery in Nigeria?

3. How could Public Private Partnership increase the provision of affordable housing in Nigeria?

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