FG Unlocks $125m Private Money for 100,000 Homes
By Patience Ikpeme
The Federal Government is delivering homes under its Renewed Hope housing programme without paying for their construction. About $39 million in cheap government-backed funding is helping to bring in a project that now costs about $125 million in private investment.
The project will deliver 100,000 housing units across selected cities in Nigeria under the Renewed Hope Cities programme. It is run as a joint venture between government and private developers, a form of Public-Private Partnership (PPP).
The Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Dr Jobson Oseodion Ewalefoh, explained the model at the Second Forum for Public-Private Partnership Units in Africa, held in Addis Ababa, Ethiopia. African countries at the forum showed strong interest in copying it for their own housing programmes.
Dr Ewalefoh said the arrangement differs from the usual PPP. “The beauty of this PPP structure is that it is not the conventional PPP. In this case, the private party owns the land, has the design, is financing it and is doing the construction,” he said.
Government’s role, he said, is to remove the risks that would otherwise keep private money away. “The PPP here is that government agreed to de-risk the project,” he told delegates.
The reason is the cost of borrowing. Commercial lending rates in Nigeria are above 23 per cent, which puts housing finance at market rates out of reach for most developers and buyers.
To bring that cost down, government made several commitments. It guaranteed a market for the homes by naming middle-income federal civil servants as the buyers. It also promised to build access roads to the semi-urban sites where the homes will stand.
Government also unlocked about $19 million in single-digit interest funding through the Federal Mortgage Bank of Nigeria, and a further $20 million in soft loans through the Family Homes Fund. Together, these two sums make up the roughly $39 million in concessionary funding.
For buyers, an estimated $112 million MOFI Real Estate Investment Fund (MRIF) will bring mortgage rates down. Government negotiated the sale prices with the developer to keep the homes affordable. It also set a limit of one unit per buyer, to stop people from buying up homes for speculation.
According to the ICRC, all these measures together cut the effective cost of the project by about 30 per cent.
Dr Ewalefoh said the lesson is that government does not need to carry the full cost of housing projects. “Government does not need to finance housing capital projects. It can crowd in private capital through policy, land availability and off-taker facilitation to create a replicable, scalable model for housing delivery,” he said.
During the question-and-answer session, many delegates asked how the protections Nigeria used could be adapted to their own countries. They were most interested in the guaranteed buyers and the access to cheap finance.
The forum was held at Africa Hall, the headquarters of the United Nations Economic Commission for Africa (UNECA), with delegations from 36 countries. It was organised by UNECA, the African Development Bank (AfDB) and the African Legal Support Facility (ALSF). Its theme was “Making Social Sector PPPs Work: From Policy Ambition to Effective Service Delivery.”
It followed a first edition in 2024, which brought together more than 30 African PPP units to discuss climate-resilient infrastructure. This year, heads of PPP units, development finance institutions, private operators and transaction advisers met to discuss how partnerships with private companies can deliver housing, healthcare, education, water and sanitation at prices citizens can afford.
The organisers noted that these services are harder to finance than roads, ports or power plants. Unlike those projects, schools, hospitals and homes rarely earn enough from user fees to repay investors. This makes careful public spending, affordable prices and accountability for results central to every project.
