(Ecofin Agency)

• Nigeria sets up $650 million fund for affordable housing

• World Bank provides concessional loan to support initiative

• Housing crisis worsens as urbanization pressures infrastructure

The Nigerian government is setting up a fund worth 1 trillion naira (about $650.5 million) to help provide affordable mortgages, as reported by Bloomberg. Finance Minister Wale Edun shared the news, highlighting that the fund will make it easier for Nigerians to access home loans at single or low double-digit interest rates, making homeownership more attainable for many.

JUST IN: The Ministry of Finance Incorporated (MOFI) says it has secured N100 billion through the MOFI Real Estate Investment Fund (MREIF) to finance affordable housing. pic.twitter.com/PA6Xn1mn63

— Nigeria Stories (@NigeriaStories) March 24, 2025

Part of the funding will come from a 40-year concessional loan from the World Bank’s International Development Association (IDA), with an interest rate of just 1%. Local institutions, including pension funds, banks, and insurance companies, have also chipped in, bringing the total amount for the first phase of the project to 250 billion naira (around $153 million).

This initiative is part of the government's broader efforts to address the country's housing crisis. Just last week, a separate 100 billion naira real estate fund was launched to attract private investment into the housing sector.

Earlier in 2023, BC International, a Dubai-based real estate development firm, signed an agreement with the Federal Housing Authority (FHA) of Nigeria to build affordable housing complexes in Abuja, with a total investment of $500 million. The goal is to provide homes that are both affordable and comfortable.

Nigeria’s rapid urbanization, with more than 53% of its population living in densely populated urban areas, has put significant pressure on infrastructure and the housing market. This has made housing increasingly difficult to access, especially for low-income households. Key factors behind the crisis include the lack of investment from property developers in affordable housing due to low profit margins and the high interest rates charged by banks on mortgages. According to Housing Finance Africa, the country faces a housing deficit of 28 million units.