• Government leverages concessionary loans, mortgage support to lower financing costs and improve affordability
•ICRC says model targets 100,000 housing units without direct federal financing of construction
•36 African countries explore Nigeria’s approach to attracting private capital for social infrastructure
James Emejo in Abuja
Director General/Chief Executive, Infrastructure Concession Regulatory Commission (ICRC), Dr. obson Ewalefoh, said the federal government has deployed concessionary financing, mortgage support and risk-sharing arrangements to unlock about $125 million in private-sector investment for affordable housing, cutting the effective cost of its Renewed Hope Housing project by about 30 per cent.
The financing structure, presented at a continental Public-Private Partnership (PPP) forum in Addis Ababa, Ethiopia, was designed to deliver 100,000 housing units across selected Nigerian cities without direct government financing of construction.
The forum was jointly organised by UNECA, the African Development Bank (AfDB) and the African Legal Support Facility (ALSF) under the theme, “Making Social Sector PPPs Work: From Policy Ambition to Effective Service Delivery.”
The finaning initiative seeks to address one of the major constraints to housing development in the country including high cost of capital, with commercial lending rates exceeding 23 per cent, making it difficult for developers to finance projects and for prospective homeowners to afford completed units.
Under the arrangement, the government is deploying targeted financial incentives, guaranteed demand and supporting infrastructure to reduce investment risks and attract private capital into a sector where high development costs and limited access to affordable mortgages have continued to constrain supply.
Ewalefoh, who presented Nigeria’s model at the forum, said the structure differed from conventional PPP arrangements because the private-sector partner was responsible for providing the land, designing the housing scheme, financing construction and executing the project.
According to him, government’s intervention is focused on removing the risks that could discourage private investors rather than directly financing the construction of the housing units.
He said, “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.”
The federal government’s commitments include identifying middle-income federal civil servants as off-takers for the homes, providing access roads to the semi-urban project locations and facilitating access to concessionary funding through specialised housing finance institutions.
Specifically, about $19 million in single-digit interest-rate funding was unlocked through the Federal Mortgage Bank of Nigeria, while another $20 million in concessionary loans was provided through the Family Homes Fund.
He said the arrangement also incorporated about $112 million from the MOFI Real Estate Investment Fund (MRIF) to support lower mortgage rates for buyers.
In addition, sale prices were negotiated with the developer to improve affordability, while a restriction limiting purchases to one housing unit per buyer was introduced to discourage speculative acquisition.
The combined measures, according to the ICRC director-general, had reduced the effective cost of the project by about 30 per cent, helping to improve its commercial viability while limiting the government’s direct financing burden.
The initiative reflects the current administration’s attempt to use public resources and policy commitments to mobilise private investment in infrastructure, particularly in sectors where affordability concerns limit the extent to which investors can recover their costs directly from end-users.
Ewalefoh pointed out that unlike toll roads, ports and power projects, social infrastructure such as housing, healthcare and education often requires additional government support because the revenue generated from users may not be sufficient to cover the cost of investment at commercially viable rates.
He told delegates that the government’s role in the Renewed Hope Housing project was therefore to create the conditions necessary for private capital to participate in housing delivery at a lower cost.
In a statement by acting Head, Media and Publicity, Ifeanyi Nwoko, he said, “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.”
Nigeria’s presentation was made at the two-day continental forum held at Africa Hall of the United Nations Economic Commission for Africa (UNECA), with delegations from 36 African countries participating.
It brought together heads of PPP units, development finance institutions, private operators and transaction advisers to examine how public-private partnerships could expand access to affordable housing, healthcare, education, sanitation and water.
Nigeria was among five countries selected to present projects at a dedicated clinic, alongside Malawi, Kenya, Djibouti and Côte d’Ivoire.
During the session, delegates expressed interest in the country’s housing framework, particularly its approach to reducing project risks through guaranteed demand and access to concessionary financing.
The discussions centred on how the mechanisms could be adapted to the circumstances of other African countries seeking to expand social infrastructure without placing excessive pressure on public finances.
The forum also examined risk allocation, availability payments, viability gap funding, subnational PPP arrangements and contract management, with participating countries presenting ongoing projects and sharing experiences on implementation challenges.
The discussions provided an opportunity for governments to assess how public financing could be used more strategically to attract private investment while maintaining affordability and fiscal sustainability.
The Renewed Hope Housing initiative is intended to demonstrate how government-backed risk reduction, targeted financing and private-sector participation can be combined to expand housing supply.
The continental forum builds on its inaugural edition in 2024, which brought together more than 30 African PPP units to discuss climate-resilient infrastructure.
The statement added that this year’s meeting expanded the focus to social infrastructure, emphasising the need to translate policy commitments into projects that deliver measurable improvements in access, affordability and service quality.