REVIEW OF RELATED LITERATURE

2.1. INTRODUCTION

In many developing countries, including Nigeria, urban housing crisis is escalating unabated despite a number of new policies, programs and strategies being engaged in by public and private sectors in addressing this problem. Government has recognized that the majority of those in need of housing in many less-developed nations in Africa, Asia and South America are in the low income categories and that some require special housing programs to be able to live in decent housing. Since market solutions and funds may not be suitable for housing this category of people and in view of the vital role housing plays in the socio-economic and political development of any nation; governments in these countries have over the years been engaged in public housing provision. In Nigeria however, from the debut efforts of the Lagos Executive Development Board (LEDB) in 1928 to date, public housing provision in this country has continued to lag behind the demand for housing, as almost 90% of the nation’s housing stock is provided by the informal sector (UN-HABITAT, 2006). As is true in other developing countries, a number of challenges are militating against the optimum performance of public housing in Nigeria. These challenges which are both contextual and organizational have shown manifestations in low productivity and provision of poor quality and expensive housing (Awotona, 1990; Olotuah and Bobadoye, 2009) are escalating by each passing day due to a number of reasons. These include high rates of urbanization and population growth (Akinmoladun and Oluwoye, 2007; Olotuah, 2010), absence of proper monitoring and evaluation of public housing policies and programs (Awotona, 1990; Federal Republic of Nigeria, 1991), lack of easy access to land and other housing inputs (Ikejiofor, 1999; UN-HABITAT, 2006) and low capacity of public housing agencies (Bana, 1991; Emerole, 2002). As a result, public housing in Nigeria has been criticized for failing to generate tangible and sustainable housing production, distribution and acquisition mechanisms to meet increasing housing demand, particularly by low-income earners (Mba, 1992; Olotuah and Bobadoye, 2009). The review of literature (Onibokun, 1985; Awotona, 1990; Federal Republic of Nigeria, 1991; Ali 1996; Mustapha 2002; Akinmoladun and Oluwoye, 2007; Ademiluyi, 2010) shows different reviews, appraisals, and assessments of the performance and challenges of past public housing policies and programs in Nigeria. But the broad and superficial perspectives many of these previous studies have assumed contributed to obscuring our understanding of the genesis of the challenges confronting public housing delivery system in Nigeria. This development is also partly responsible for forestalling the evolution of pragmatic solutions to the lingering urban housing crisis in Nigeria. Since public housing provision is principally carried out by government agencies and their collaborators, the paper argues that one vital step to addressing myriads of challenges in public housing provisions in Nigeria is to identify areas of weakness in public housing agencies and subsequently address such weakness for enhanced productivity. It is for this reason that the study investigated the contextual and organizational challenges related to public housing provisions in Nigeria in the postindependence era. The focus on post-independence era is based on evidence in the review of literature showing that conscious effort by governments in Nigeria to construct houses for the general public and formulate National Housing Policies started after independence from the Great Britain in 1960 (Onibokun, 1985) . The study attempted at using key organizational components to assess areas of challenges in public housing provision among government agencies in the study area. This is with a view to assisting public-sector housing policy makers and program managers chart future pathways for improved performance in public housing provision and management in Nigeria.

2.2. THEORITICAL FRAMEWORK

As a guiding principle a research need to have a theoretical perspective. Thus, for the purpose of this study, the system theory and the theory of class struggle to be relevant in explaining the topic “problems of public sector housing scheme, how it affects the low income class in Borno State”. The system theory is one of theory management approach that looked at organization as an entity whose parts are connected and interdependent. According this theory, organisation, is not an island to itself, but is being affected by the environment. In other words, there is a symbolic relationship with the environment which it lives. According to this approach, systems are of two types, the closed system and open system. The closed system is restricted by what is composed within it (its own elements) it is self-sustain and without intervention, it remains in a steady state. On the other hand, the open system has the ability to take input, to convert or process the inputs and to give an out put. This mean that, open system can grow depending on its ability to convert and process the inputs. If you reduce the inputs, the organisation will die. Open system therefore receive inputs, so they are not subject to entropy. Other basic essentials of the open systems are stated as follows: (i) Open system export their product to the external environment and their outputs are usually in inputs for other organisations, individuals or groups. (ii) There is feedback system in the form of information about the external environmental condition, organisations performance and internal operation. This keeps the system on course with regards to its goal.

To properly explain the system approach, David Easton used an analogy of the grinding machine whose output is being determined by the inputs and the mechanical structure within the machine. The machine receives inputs e.g. grains, the grains are processed within the machine and the end product with the output becomes grains powder. However, if there is no input the machine can not give output. Similarly, if the mechanical structure on the transformation process is faulty, the output or the product of the machine will not be good or qualitative product. This means the product had to be reprocessed again for better result. The complains made about the product enables the machine operators to readjust his machine or repair the faulty parts. This process is the feedback system. To relate the above explanation to this study, the grinding machine is the ministry or agencies of the public housing schemes; the operator of the machine is the government. The inputs are the human and material resources in the housing schemes. While the mechanical structures of the machine are the policies being implemented to achieve the goal or outputs. The outputs are the housing projects or affordable houses constructed or the services rendered by various housing schemes e.g. the national housing fund scheme. The lesser the inputs (e.g. funds) invested in the public housing scheme, the lesser the provision of houses by the public housing schemes or projects. On the other hand if the housing policy were not properly implemented, there will be problem in either the construction or distribution of the houses. If this happened, then there will be problem in the housing delivery, this is because many potential beneficiaries would not have access to the scheme. However, a responsive government will always used the feedback system to plan and redirect itself toward achieving the goal. In a situation where this cannot be possible, those who can not have access to the housing scheme will suffer various housing problems. The feedback system are the praises or complains and criticism about the activities of the public sector housing schemes, while the quality of the output are the type of services rendered whether or not it has reach the potential beneficiaries. Based on the above explanation therefore, one can see that the process of public sector housing delivery system in Borno State has problems. This is because; it seems most successive administration having been indifferent or insensitive about the plight of the low income class. Thus, government has continued to build houses that only the rich, senior civil servant and political office holders can benefit from it. With regard to the theory of class struggle, it has its origin from the works of the Karlmarx, Fredrick Engels, Linens and other Marxian scholars. According to them, society is divided into two classes as a result of private ownership of the means of production. In other words, it was private property that split society into the rich and poor, exploiters and exploited. Those who own the means of production in the capitalist society are the bourgeoisie while those who do not own any means of production are the proletariats. The theory of class struggle is based on the premise that, each of these two classes, struggle for the possession of what society considered as desirable. This struggle according to this approach is like a contest with each struggling to acquire and accumulate these desirables. In this process of contest, each utilized what is available at his disposal to enable him have an upper hand over the other. However, in this type of struggle the bourgeoisie always dominate the proletariat because he has the means of production where as the proletariat has not to further his chances. In this type of struggle, Ake (1977) noted that sometime the activities of the bourgeoisie constitute an obstacle to development. To relate the above theory to this study, the desirable of society as used in the theory can be compared to housing need. This is because every person in the society would like to live in his own personal house. However, since not every body can have the resources to build a house, any public sector housing scheme becomes a hot cake for potential beneficiaries. In this type of situation where many people are after limited number of houses, only the well to do can afford to have access to the scheme. The low income class on the other hand are defeated in the contest on the ground of inability to afford it at higher rate. In a capitalist society like ours, where market forces determine the price of commodities, the low income class would find it difficult to afford a descent housing accommodation. Most of the public sector housing schemes in Borno State has been hijacked by high income class such as the senior civil servant, businessmen, political office holders and traditional rulers. In this study, the bourgeoisie class is made up of the groups mention above because they control the machinery of government and the economy. They use the machinery of government to acquire the desirable of society at the expense of the low income class. As have been mention earlier, most of the public housing scheme in Borno State does not favour the poor or low income class. The high income class continue to dominate the housing sector so as to maintain their status quo because it gives them respect and recognition when tenants called them landlord or Maigida.

The recent allocation of plots in public Housing Estates and Government Reserves Areas in Maiduguri Metropolis only create more chances for the high income class to dominate these reserve areas and to destroy the green areas which are supposed to be left for the comfort of the people in the area. As a result of this greedy accumulation or acquiring of plots by this bourgeoisie, some plots have been left undeveloped for years leaving those who are in dire need of a house to suffer various housing related problems.

2.2. CONCEPTUAL FRAME WORK

Review of the Present Housing Finance System

It has been observed that the Nigerian present housing finance is under developed and ill equipped to mobilise and channel savings to the housing sector. Although the Federal Mortgage Bank of Nigeria was created to serve as a whole sale and apex institution, the primary mortgage institutions which are the institutional components of the finance market have not developed or are not existent in some states of the Federation e.g. Borno State. According to the National Housing Policy, the primary mortgage institutions can be established at state level even by private bodies. Although it is important to know that this process of decentralization will provide an opportunity for as many as possible to participate in the scheme, many state governments such as Borno, could not register. As at December 27th, 1999 according to the Punch (1990) only less than 60 accredited primary mortgage institutions were in operation as against the initial number of two hundred and eighty seven (287) that registered. The paper attributed the dwindling number of the primary mortgage institutions to the “whirlwind of distress that characterised the financial services industries from early 1994 upwards”.Based on the above explanation therefore, the hope of the low income class to own their own houses has become an illusion. This means only the privilege can have access to housing fund. Hence, there is still an urgent need to create a vigorous effective housing finance system for the state.

Strategies for Effective Mobilization of Fund for Housing Finance

fund is guaranteed. Under this strategies therefore, attention were paid to the following crucial areas of resources mobilization.

Voluntary scheme

Mandatory scheme

Government budgetary allocation and financial transfer

To encourage voluntarily housing scheme, the following strategies were pursued:

Encourage individual to save at low interest rate and also borrow at the same rate to build or buy their houses at any given time.

Introduce appropriate fiscal measure to project the assets and liabilities of individuals.

Stabilize individual deposit through contractual saving scheme, where the guarantee of housing loan at low cost encourages personal saving at low deposit rate.

The Central Bank through guideline and active participation should encourage commercial banks to set up subsidiaries that will specialize in primary mortgage institution. Under the mandatory scheme, the National Housing Fund scheme was established by decree 3 of 1992 as a sustainable means of housing finance for the low income earners. According to the National Housing Policy (1990) such scheme have been implemented in many developed and under developed countries given the need for long term financing of housing development.

The terms and conditions of this saving scheme within the framework of National Housing Fund (NHF) are as follows:-

( Participation in this scheme is for workers earning not less than three thousand naira (N 3,000) per annum in both public and private sector of the economy.

( Participants are required to contribute 2½ of their monthly salaries to the scheme.

( Interest rate of 4% shall accrue to such saving or contribution.

( Any participant who contributed up to six months is legible to apply for housing loans which will be given out through the primary mortgage institutions.

( If for any reason the contribution could not utilize the housing loan facilities under the scheme, his or her contribution can be withdrawn as retirement benefit together with the accrued interest.

It is very important to note here however that, while various terms and conditions have been clearly stated in the National Housing Policy, the National Housing Fund scheme has failed to meet some of these conditions mentioned above. Many people could not have access to the fund because of the stringent conditions imposed by the managers of the fund. Other strategies which were supposed to be adopted with regard to the National Housing Fund includes simplification of the procedure for the refund of any contribution by the Federal Mortgage Bank, keeping accurate record of each workers contributions and ensuring the participation of self employed workers. With regard to record keeping by the National Housing Fund, it should be observed that little have been achieve in this direction. Many workers have not registered with the National Housing Fund although they have been contributing for many years. Infact many workers are not even aware that they have been contributing to the fund. Since there is no good record keeping, many workers may not know how much they have contributed. Hence, the calling for the scraping of the scheme by labour unions and individuals is not out of place. In addition to the mandatory saving by the workers, Commercial and Merchant Banks are required to invest 10% of their loans and advances in the Mortgage Banks at an interest of 1% chargeable on current account through the Central Bank‟s credit guide lines. On the other hand, insurance companies are to invest a minimum of 20% of their non life fund and 40% of the life fund in real estate development at an interest rate not exceeding 4%. According to the National Housing Policy council report (May, 1993), the Federal Government release the sum of N 250 million as take off grant for the National Housing Fund in October, 1992. however, according to the Punch of Monday 17th July (2000), the National Housing Fund only disbursed the sum of N 242,808,490 to only 395 beneficiaries.

Urban Housing development

With regard to housing, the National Housing Policy observed that, although for the past years housing schemes were concentrated in the urban areas specific needs of the low income groups have not been adequately address. It noted that 70% of the low income group still live in rented houses than owner occupies houses. To alleviate the problems of housing and ensure physical development of the urban low income area; the National Housing Policy stated that government shall adopt the following strategies and recommendations on urban housing:-

1. Encourage massive private sector investment in provision of cheap habitable rental accommodation by

(a) providing access to building finance at favourable terms to developers of low income accommodations.

(b) ensuring the employers of labour assist their workers in the provision of shelter.

(c) Providing serviced land at subsidized rate for development

2. Directly provide facilities and houses for urban low income earners by

(a) re-organizing and funding various housing agencies and encouraging them to make available rental housing for urban low income group.

(b) reviewing the existing building bye laws to ensure that their provisions are brought within affordable limit of the low income group etc. Chapter eight of the National Housing Policy is also an important aspect of the policy because it states the role of the private sector in housing schemes. According to the National Housing Policy, the private sector provides over 90% of the housing stock in the country. It has been defined according to this policy to include “all financial intermediaries, industrial and manufacturing organisation, as well as private and individual investors”. However, some of the factor militating against effective private sector participation were identified to include:

(1) Problems of land acquisition: land has always been one of the valuable things that people keep as an asset. It is difficult to acquire land because people claim their ancestral land.

(2) Lack of access to adequate housing finance. Some of the bureaucracy involved is too frustrating coupled with corruption in the disbursement of such fund.

(3) Excessive cost of building materials etc.

However, to encourage private sector to further participate in the housing delivery, the following strategies have been suggested:

(i) Grant capital allowance on residential building and exempt interest on loan from tax.

(ii) Streamline the procedure and speed up the issuance of certificate of occupancy and consent to mortgage.

(iii) Encourage trade groups to set up building societies (

4) Review and ensure effective enforcement of the provision of the employee Housing Scheme Decree 54 of 1979 as amended etc. Chapter nine which is the last chapter of the National Housing Policy (August, 1990 publication) is concern with the monitoring and evaluation aspect. This chapter attribute the failure of past housing delivery to lack of adequate monitoring and evaluation of policy implementation. By this it means that constant monitoring of the agencies involved in housing delivery will check the problems of failed projects and eliminate corruptions in terms of contracts. Since large number of institutions is involved in the implementation of this policy, adequate monitoring is required to achieve its goal. Although several strategies for evaluation and monitoring were put forward, the cases of abandon housing project are still prevalent. The problem with our public policy is that, many people do not consider government programmes or activities as somebody’s work. Thus whether the programmes fail or succeeded it is none of their business. According to the strategies for monitoring and evaluating housing policy as contained in this chapter, there shall be national council on monitoring and evaluation of housing policy which shall be an independent body, charged with responsibility of monitoring and evaluating the implementation of the National Housing Policy. The council shall among others: (a) examine the performance of relevant agencies and institution involved in housing as determined by the National Housing Policy, especially in the area of rural and low income housing: (b) take prompt action to effect remedial measures where necessary in the interest of an orderly and effective implementation of the National Housing Policy: (c) examine and monitor participation and performance of private sector in the provision of accommodation.

2.3. EMPIRICAL REVIEW

A survey of literature vividly shows that public housing connotes different meanings in different countries (Oxley, 1999; Parson, 2007). But in the context of this study, public housing describes housing provided, owned or managed independently by government or in collaboration with private sector for the purpose of providing mass housing to citizens and some key top government officials on owner-occupied or rental bases (Ibem and Amole, 2010). In spite of the different meanings and connotations of public housing in literature, there is consensus among authors and researchers that the goal of public housing provision in most countries of the world is the provision of subsidized housing to households and individuals who are unable to gain access to decent housing at market prices (Balchin et al., 2000; Liu, 2007). This is particularly very important in improving public health; reducing societal injustice and poverty; ensuring social order and accommodating population growth (Grigsby and Bourassa, 2003).

Several studies have indicated that public housing provision involves policy formulation, institutional development, actual housing provision, allocation and management (Omole, 2001; Valenca, 2007; Sengupta and Tipple, 2007). This goes to suggest that challenges in public housing provision are related to policy formulation, institutional growth and development as well as actual production and consumption of housing units and services. In fact, Sengupta and Tipple (2007) noted that the performance of public-sector housing in terms of total supply and quality, price and affordability of housing and services depends on these key areas and perhaps on other intervening factors. Specifically, the actual production of housing units and associated services is one of the key objectives of public housing provision which aims at increasing decent and affordable housing stock within a country, state or locality. However, evidence from literature review clearly shows that public housing provision in many developing countries, including Nigeria, has not recorded any impressive result in marching housing production to housing demand, as there are huge housing supply deficits in many less developed countries (Rondinelli, 1990; Mukhija, 2004; Sengupta and Ganesan, 2004; Olotuah, 2010). It is on this basis that this paper contends that the myriad of challenges militating against optimum performance of public housing in developing countries deserve proper investigation for appropriate solutions. The burgeoning housing supply deficit in Nigerian which as at 2008 was put at over 15 million housing units (Onwuemenyi, 2008) for instance, has been blamed on low productivity in public-sector housing. Table 1 shows the planned and constructed number of housing units in the different public housing programs initiated between 1962 and 1999. Examination of Table 1 reveals that a total of 618,498 housing units were planned for production in the various public housing schemes across the country. However, around 85,812 housing units representing around 14% of the planned housing units were actually completed. This achievement level clearly shows that many of the public housing programs initiated by government within that period failed to meet the targeted number of housing units. The cumulative effect of this failure is that an estimated 75% of Nigeria’s 60 million urban population live in slums, and not less than 700,000 housing units are required annually to improve on this appalling housing situation across the country (Federal Republic of Nigeria, 1991; Olotuah, 2010). If the recent revelation by the FederalMinistry of Housing is anything to go by, the current national annual production of 10,000 housing units fall short of the estimated yearly housing demand in Nigeria. This implies that adequate measures need to be urgently put in place to combat the challenge of low productivity in public-sector housing in this country. In view of the foregoing, many authors have argued that the challenge of low productivity in public housing in Nigeria is rooted in mismanagement of funds and politicization of housing program (Bana, 1991; Mustapha, 2002) while others are of the opinion that poor implementation of housing policies as well as lack of proper coordination of activities of public housing agencies were the key challenges of public housing in Nigeria (Ikejiofor, 1999; UN-HABITAT, 2006; Akinmoladun and Oluwoye, 2007; Ademiluyi and Raji, 2008). Another school of thought believes that low capacity of public housing agencies in delivering their housing mandate is responsible for the failure of past public housing schemes to achieve set targets in Nigeria (Bana, 1991; Emerole, 2002). These views are no doubt very incisive as they attempt to identify the possible reasons why many past public housing schemes failed to achieve targeted number of housing units in the country. They are however, deficient in revealing why this challenge has persisted over the years. Specifically, the reasons why previous public housing programs were politicised and poorly implemented as well as the areas of weakness in organizational capacity in public housing agencies have not been addressed. These are vital areas of research deficiency which this study will attempt to address. Interestingly, contemporary literature on organizational studies has shown that performance of organizations in product and service delivery depends on a number of factors. These include availability of requisite human resource, staff morale, work environment, equipment, technological know-how and funding (Lusthaus et al., 2002). Others are leadership style, role assignment to staff, information management strategies, process management and monitoring strategies, innovation, communication channel, staff evaluation and reward system, capacity building process and others (Wachira, 2009). Therefore, an investigation into these vital components of organizational performance can help to uncover the actual areas of deficiencies in organizational capacity in public housing agencies in Nigeria.

Apart from the failure of public-sector housing to provide planned number of housing units as Table 1 suggests, unimpressive result has also been recorded in the provision of quality housing in Nigeria. Although each of the 1988, 1991, 2002 and 2006 National Housing Policies set outs to provide Nigerians access to qualitative and satisfactory housing at affordable cost; several studies have succinctly shown that these policies and thehousing schemes derived from them achieved minimal success in this area (Awotona, 1978; Ukoha and Beamish, 1997; Fatoye and Odusami, 2009; Olatubara and Fatoye, 2007; Jiboye, 2009; Ibem and Amole, 2010). Each of the above cited works identified lack of consideration of end users’ socio-economic and cultural attributes and personal preferences as being responsible for unsatisfactory public housing as perceived by the users. Moreover, there is the general notion that this development is due to lack of proper monitoring and evaluation of housing policies and programs in Nigeria (Federal Republic of Nigeria, 1991). Evidence in existing literature suggests that one of the key criteria for enhancing product and service quality is a good information infrastructure that allows for feedback loops, performance appraisals and benchmarking against self and others (Kellecher, 2010). The reality is that there is dearth of good information infrastructure that allows for feedback mechanism in public housing delivery system in Nigeria (Federal Republic of Nigeria, 1991). This is probably why there appear to be no adequate and reliable information base for effective housing policy formulation, program design and implementation strategies in the country, which is inimical to effective and efficient public housing delivery system. It is very obvious from the review of literature that the very reason why this problem exists in the country has not been properly investigated. With respect to affordable housing provision, the UN-HABITAT (2006) report on Nigeria noted that past public housing policies and programs in the country were aimed at enabling low-income earners gain access to decent housing at affordable cost. According to Aribigbola (2008), the 2002 New National Housing and Urban Development Policy (NNHUDP) for instance, asserted that no Nigerian is expected to pay more than 20% of his or her monthly income on housing. But to the contrary, prior studies (Onibokun, 1985; Awotona, 1990; Mba 1992; Olotuah and Bobadoye, 2009; Ibem, 2010) have shown that the targeted population of many past public housing schemes in Nigeria did not benefit from such schemes. This was due to high cost of housing units provided. Consequently, several authors have contended that the constraints in accessing housing inputs (land, building materials and finance) as well as cost of providing infrastructure were partly responsible for the hike in the cost of public housing beyond the reach of an average Nigerian (Ikejiofor, 1999; UN-HABITAT, 2006; Aribigbola, 2008). In addition, it can also be deduced from literature that poor management of those housing schemes and the use of inappropriatedesign standards contributed to high cost of public housing in the last few decades in Nigeria (Onibokun, 1985; Mustapha, 2002; Ademiluyi, 2010). From the foregoing, it is evident that there are challenges in the provision of affordable housing that is quantitative and qualitative adequate by public sector in Nigeria since independence in 1960. Some of these challenges are contextual and are primarily due to the external social, economic and political environment in which public housing schemes were conceived, designed and implemented while others are organizational challenges within public housing agencies. The current study is primarily concerned with the causes of, and possible solutions to these challenges.