Samankwe’s ‘I Don Tire’ – An Average Nigerian’s Quest For Affordable Housing

July 25, 2016

2002: The Dream – The Scraping, Saving and Purchase

Oga Samankwe was one of the lucky ones. He had a decent job in the banking sector, finally managed to get married, bought a brand-new-Tokunbo Toyota Camry and lived in a rented apartment in a middle-income neighbourhood of Port Harcourt, Rivers State.

Oga Samankwe had finally ‘made it’, now officially a member of the elite 11% of emergent middle class Nigerians out of a 168 million population. This exclusive coterie had only just began to grow after the middle class mass extinction economic event of the mid 1980’s that left Nigeria with just the rich and the very poor.

But there was a problem.

‘Making it’ into the exclusive Nigerian middle class. As an Igbo man, especially an Igbo man from Oraukwu in Anambra state, Samankwe could not consider himself a real man, until he built a house of his own. One first in Port Harcourt where he lived and the second, following the age-old Igbo principle of ‘aku-lue-uno’, that wealth not evident in your hometown is wasted, will be a nice ‘white-house’ in his village in Oraukwu.

Osodieli his loving wife completely agreed with him. In fact she was the one that constantly reminded her of Oliver De Coque’s song in which he admonished that a tenant has no business beautifying and cultivating flowers in a Landlords house as he cannot uproot the flowers and leave at the time of eviction. In fact anything Samankwe indicated that he was struggling with saving up for ‘our project’ (for a major project it was) it was this famous track by Oliver De Coque that he will meet on repeat when he arrives home from work in the evening; as Osodieli sets out his dinner and runs his bath; and even as they both tuck themselves into bed at night.

So Osodieli’s message was quite clear, and Samankwe did not have the stomach to argue.

So they saved, and scraped.

Scraped and saved.

Saved and scraped until finally, in 2003 when they heard that  2 plots of native-land was available for sale in Rumuodomaya, a suburb of Port Harcourt, they withdrew their entire savings of N2 Million  to pay for and erect a perimeter fence around the land.

For their purchase, they got a Deed of Conveyance in return.

Now, a typical Deed of Conveyance is a document that evidences the history of how the land has reached the present owner till date and relates all the information in respect of the true owners of the land before it was passed to the current owner. Unfortunately, by the laws of Nigeria, specifically the Land Use Act Chapter 202 Laws of the Federation of Nigeria 1990, as enshrined in Section 315 (subsection 5d) of the Constitution of the Federal Republic of Nigeria 1999, “subject to the provisions of this Act, all land comprised in the territory of each State in the Federation are hereby vested in the Governor of that State and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of this Act”.


So by the Land Use Act, the seller of the Land cannot transfer title to Samankwe.

See gbege!

2003: The Land – Title, Right of Occupancy, and Consent

Section 9 of the Land Use Act (subsection 1) states as follows;;

(1)        It shall be lawful for the Governor–

(a)       when granting a statutory right of occupancy to any personal or

(b)       when any person is in occupation of land under a customary right of occupancy and applies in the prescribed manner; or

(c)        when any person is entitled to a statutory right of occupancy, to issue a certificate under his hand in evidence of such right of occupancy.

The law also prescribes the name of such a certificate in Section 2;

(2)        Such certificate shall be termed a certificate of occupancy and there shall be paid therefore by the person in whose name it is issued, such fee (if any) as may be prescribed.

So Samankwe being a law abiding citizen quickly reviews the process for  registering the title, and seeking the Governor’s consent  and the issuance of the much sought after Certificate of Occupancy popularly referred to as a ‘C of O’.

Why is this important?

Well because as we have already noted, the ‘C of O’ evidences title but more importantly, a ‘C of O’ means that Samankwe can use his land as collateral to secure a loan for Osodieli’s business or even use the land to first secure construction finance for his dream home and then refinance the construction finance with a long term mortgage. No bank will afford him such facilities based on a Deed of Conveyance.

You will think that this should be easy, right?

Not in Nigeria.

Unfortunately the process of getting the Governor’s Consent and the requisite C of O can take any time between 1 to 15 years depending on the State of the federation. Stories abound of heaps and heaps of C of O requests stacked at the various State Governors’ Offices. In fact it is quite normal for the agent / lawyer processing the C of O to seek its withdrawal on a number of occasions to change the name of the assenting Governor given the expiration of the Governor’s tenor in Office.

So that you do not hold your breath to the point of asphyxiation, Samankwe was eventually issued a C of O.

In 2011.

After 8 years.

He was one of the lucky ones. His request passed through both Governors Peter Odilli, Governors Celestine Omehia and was eventually approved during the tenor of Governor Rotimi Amaechi.

8 years!

In that 8 years the piece of land was a non-earning asset, trapped equity and not fit to serve as collateral for a bank loan of any nature.

2003: Winch-People and the Barbarians at the Gates – Construction Finance and Chief Oti-Okpo

But Nigerians are innovative. Because of this inordinate delay in issuance of rights of occupancy, Samankwe and his ilk rely on what has become the housing finance model of necessity in Nigeria and parts of West Africa, the ‘Stepped Self-Finance’ model. Houses are built in fits and starts, as the prospective home owner raises savings, over an extended period to build, until his savings are exhausted.

So you hear things like, “I don reach foundation level” or “DPC (Damp Proof Course) / Lintel level”. If the target home is a storey building or more then the home owner’s savings may run out  at ‘Decking’ Level after which he will cover the staircase access with a roofed small hut that has come to be known as an ‘I don tire’, an euphemism for exhausted savings. The ‘I don tire’ protects the staircase opening (and by extension, the completed lower floor) from the elements, particularly the rains, pending when the home owner saves up enough money for the second phase of the project.

This process can take anywhere between 1 to 20 years. In fact several of such structures have been completed by descendants. A civil servant father starts the building’s lower floor with savings over a span of a decade then caps it with an ‘I don tire’ upon retirement from the civil service. The son picks up the mantle upon completion of education and securing a job, and finally finishes the first floor and roofs the building. In some instances the plastering and painting of the building is left to the third generation of the family….but I digress.

So Samankwe confirmed from his lawyer the taxes and rates due to the Local Government Council as well as the State Government for Building and associated Permits. Armed with this information and the knowledge that both the Local Government and the State maintained revenue collections accounts at the bank in which we worked, he secured a personal loan and the credited the taxes into the their respective accounts with his bank.


The very next day after he commenced erecting a perimeter fence, he received a visit from a band of thugs, Chief Oti-Okpo’s enforcers. Apparently Chief Oti-Okpo serves as an authorised revenue collection agent for both the State and Local Government and is entitled to 30% of all taxes and revenues. Two receipts are issued for such payments; one for Chief’s 30% and another for Government’s 60%. Chief Oti-Okpo’s thugs descended on Samankwe’s project engineers and construction workers when they learnt that he paid ‘their money’ directly to Government. Following a couple of calls to people who matter, Samankwe secured audience with Chief Oti-Okpo and later in the evening meets him holding court in an expansive compound.

Chief Oti-Okpo explains calmly that Government cannot defraud him of his entitlement and only concedes to allow the construction if Samankwe pays another 30% directly to him. Samankwe angrily calls the Local Government Chairman and Chief Oti-Okpo screams in the background that if the Chairman has a prick dangling between his legs, then he should attempt not to give him his due.

Silence.Both on Samankwe’s end and Local Government Chairman’s end.

Then Local Government Chairman claims he is dashing into a meeting and switches off his phone. With ‘humbility’ and his tail between his legs, Oga Samankwe pays Chief Oti-Okpo his 30% and secures respite for his project.

By the way, ‘humbility’ is the act of eating humble pie with humility that the average Nigerian is used to.

No power? We accept with humbility. No potable water? No security? We accept with Humbility. No….I’m sure you get the drift.

But I digress.

So work on site continues to the foundation level. Savings are exhausted. Samankwe rests.

‘I don tire’.

2003: Village Fraudsters and the Law- Litigation

It turns out that Samankwe may not own the land after all. Notice of a Court action was posted on his gate. It appears that the person who sold the land to him may have sold to some other parties while the person’s brothers and cousins may also have sold the same property to other parties. All the sellers are from the same extended family.

This is evidently a family business model.

Samankwe takes another personal loan to hire a lawyer and initiates discussions to settle the case amicably and out of court. It is very important to him as all his life savings and borrowings (including that of Osodieli) are tied in that piece of land and the building foundation therein.

Samankwe settles the case out of court. Borrows money from a relative to pay for the land a second time, proceeds of which is used by the selling family to settle the defrauded litigants.

2004: Gbese and Loan Repayment

Samankwe is still repaying all the money he borrowed for tax payments to Government and Chief Oti-Okpo and for both the first and second purchase of the same piece of land.

2005 – Samankwe is still repaying gbese.

2006 – Still repaying gbese!

2007 – Still repaying gbese!

2008 – Samankwe finally retires all borrowed funds and commences saving again.

2009 – Savings and borrowings enables house to be build up to ‘Decking’ level. Savings and borrowings exhausted. Samankwe caps it with …you guessed right!

‘I don tire’.

2010 – Still repaying the borrowed funds

2011 – Savings and short term borrowings enables Samankwe complete the first floor, roof, finish the house and move in. But monthly principal and interest repayments on the short term borrowings is crowding out all other needs of the family. Both Samankwe and Osodieli are now very irritable. No romance without finance.

2011 – Governor’s consent is finally received and Certificate of Occupancy issued.




Na Christ emerigo ekwensu!

2012: Long Term Mortgage Finance

To ease the pressure on his cashflows, Samankwe approaches a commercial bank for a mortgage loan. Documents are processed and credit risk assessed. Loan is approved. However Section 22 of the Land Use Act 1990 states as follows;

“It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof  by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained”

So Samankwe pays the requisite charges and taxes and the bank sends the documentation for Governor’s Consent. The additional Charges and Taxes are built into the value of the Mortgage granted to Samankwe. Interestingly, if the commercial bank intends to securitize it’s Mortgage Book (which includes Samankwe’s Mortgage) to liquefy the book and write more mortgages, then Section 22 of the Land Use Act still applies. The documents are sent for Governor’s consent again, though as  part of a batch.

The additional Charges and Taxes passed on to the home owner.

Now this is the typical housing finance structure deployed by an average honest Nigerian civil servant and middle income earner.

Those few that are lucky to access construction or mortgage finance fare better.

Of course our politicians, civil servants who receive kickbacks and all those who have made money from fraudulent endeavours do not build their houses in this manner. For those types, construction is undertaken ‘day and night’ and a spanking new master piece is delivered within a space of 3 to 6 months.

The Moral of My Story Is…

Encapsulated in Samankwe’s story are a few of the challenges facing our housing sector today, ranging from title issues, inadequate scale of delivery, multiple formal and informal taxation (that increases the cost of the housing units), inability to access mortgages and construction finance due to either lack of a clear property and security rights or absence of long term mortgage finance, high cost of mortgages when available, the affordability gap between the cost of building a house and the income of potential home owners etc.

Of course there are a number of other issues plaguing Nigeria’s housing sector not covered in Samankwe’s story but I guess we all get the drift.

In all developed societies, wherever there is an Affordability Gap as obtainable in Nigeria, Government has always found an innovative way to intervene and encourage the creation of housing stock, and none, and I repeat NONE of these governments rely on a general increase in household incomes as the means for raising effective housing demand.

Such Affordability Gap interventions range from; the provision of land by Government / Communities; Subsidising consumption; Subsidising supply; Supply creation through Public Private Partnerships and Private Finance Initiatives; Separation of ownership from management to protect the assets from problems of mismanagement; and Default prevention through hands-on property management, loan administration and customer care; and Securitization.

Then as a matter of urgency Government needs to streamline and speed up the process of securing Certificates of Occupancies. For instance, why will an investor, particularly a foreign investor, inject US$1 Billion, or even US$1 Million in a housing project when it will take eternity for the underlying title to the property to be transferred?

Exposure without clear property and security rights?

In my early days in banking one of my bosses taught us that ‘In God we trust, everyone else should bring collateral’

Are you God?

The Land Use Act as an Albatross

Our housing finance challenges directly linked to the infamous Land Use Act can be classified under two broad headings; Consent and Revocation.

Consent Provisions (Section 22) of the Act

  • The Land Use Act’s single greatest impediment is that it requires the consent of the State Governor before any legal transaction on land can be consummated.
  • In simplistic terms Section 22 requires that if A wants to sell his plot of land to B, A will have to first seek and obtain the consent of the Governor (to effect a change of title to the land in favour of B), before effecting the sale. Consequently what obtains in practise is that the seller will sign all documents to enable the purchaser obtain the consent of the Governor at the point of sale and therefore transfer the cost, trouble and risk of obtaining the required consent to the buyer.
  • Secondly, State Governments exploit the Consent process to generate revenue leading to a situation where the direct cost of Consent is today a minimum of 15% of the assessed value of the land. Added to the high cost of land this makes land purchase in Nigeria an extremely expensive venture.
  • Thirdly, it takes an inordinate length of time to obtain the Consent even when all conditions have been met. The story of piles of Deed of Conveyances and Assignments awaiting Consent in many states of the federation is common knowledge. This has made the reliance on properties as collateral for loans quite unattractive as the process of perfecting Legal Mortgages is time consuming.

Revocation Provisions (Section 28) of the Act

  • This section gives the State Governors the right to revoke a C of O for ‘overriding public interest’.

The section further explains the conditions for such Revocations in sub section 2 and 3;

(2)     Overriding public interest in the case of a statutory right of occupancy means–.

(a)     the alienation by the occupier by assignment, mortgage, transfer of possession, sublease, or otherwise of any right of occupancy or part thereof contrary to the provisions of this Act or of any regulations made thereunder;

(b)     the requirement of the land by the Government of the State or by a Local Government in the State, in either case for public purposes within the State, or the requirement of the land by the Government of the Federation for public purposes of the Federation;

(c)    the requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith.

(3)     Overriding public interest in the case of a customary right of occupancy means –

(a)     the requirement of the land by the Government of the State or by a Local Government in the State in either case for public purpose within the State, or the requirement of the land by the government of the Federation for public purposes of the Federation.

(b)     the requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith;

(c)    the requirement of the land for the extraction of building materials;

(d)     the alienation by the occupier by sale, assignment, mortgage, transfer of possession, sublease, bequest or otherwise of the right of occupancy without the requisite consent or approval.

In practise, overtime we have seen a very fluid interpretation of ‘Overriding Public Interest’ for the purpose of Land title revocation by State Governors. This includes for the sole purpose of frustrating a project championed by the Federal Government by a State Governor in the opposition (we saw this in the Second Republic); Intimidation of political opponents (we have seen cases where the C of O of a property in which an opposition party holds its meetings was revoked by a Governor). We have even seen a case, where the Certificate of Occupancy to a property allocated to President Yar’adua (when he was a State Governor) was revoked. Regardless of the propriety or not of the last mentioned incident particularly, at the time, it probably did more damage to housing sector investor confidence in Nigeria than whatever good it set out to achieve. As a potential foreign investor in the Nigerian real estate market pointed out to me, ‘if you guys can revoke the title of the property of a President, how safe will the investment of a foreigner like me be?’ Hopefully, when we get our heads out of our backsides, a little policy change like a mandatory Title Insurance Policy framework may serve to mitigate the fallout of such a title revocation and create more Housing sector investor confidence in our issued titles.

But then, we have never really been known to be good at coming up with the little solutions that make a big difference, have we?

Today we pay lip service to affordable housing yet we are all aware of the formal and informal bottlenecks that increase the cost of building a house;

  • We have made the access to clear property and security rights a long and torturous process thereby increasing the cost.
  • Consequently we have inadvertently made the cost of a piece of land with a Certificate of Occupancy much more expensive than one in the same location without proper title. Simple demand and supply logic suggests that the more real estate we have in the country with clear property and security rights, the less expensive the land will be.
  • Nobody has ever bothered to estimate how much ‘trapped equity’ the country has in land with inappropriate title. How many SMEs will be able to access financing if the owners real estate inherited under native laws and customs can be provided with eligible title.
  • We have a situation where the cost of Consent is a minimum of 15% of the assessed value of the land. Why wouldn’t housing be unaffordable?
  • We need to reduce and harmonise the charges for Building Permits and Consent. No Chief Oti-Okpo middleman or Revenue Agents should be part of the process.
  • When Long Term Mortgage finance is available then it’s probably expensive and in double digit interest rates. Unfortunately this is a case of the current Cost of Funds, inflation and several other factors. Even the Government of the day borrows from the market at double digit interest rates.

All what we have stated above are Government’s problems to solve; the right legislation, the appropriate fiscal and monetary policies plus meticulous execution and then watch the magic work itself.

For instance, once we sort out the problem with C of O issuance and Construction Finance, abolishing the Cash Reserve Requirement for Commercial Banks in Nigeria will free up liquidity, reduce cost of funds and force lending rates down. We can then legislate that a portion of this freed up capital be deployed to construction and mortgage finance. This will be supported by an appropriate Securitization framework to purchase the mortgage assets from Commercial banks and Primary Mortgage Institutions.

For like forever we have been looking for long term deposit liability to fund mortgage finance and people have offered all sort of proposals. Yet we have almost 30% of the banking industry’s total deposit liability locked up in cash reserve requirement. If liquidity is the issue here then we can agree on criteria and underlying documentation for primary mortgage loans written with liability that should ordinarily be part of CRR and government can securitize it in exchange for Treasury Certificates that qualify as part of a bank’s liquid assets.

Remember that in doing this government has to sort out the issues with land title and consent which should moderate part of the inflationary pressure that this will otherwise have created.

Call this a Local Fannie Mae ‘na nwanneya’ Freddie Mac if you like, essentially creating the securitization liquidity source that a typical FMBN requires to function. With this you will have a banking industry whose risk asset portfolio is made up of 30% Mortgage Assets.

CRR is sterilized at 0 interest anyway so a 10% or even less interest rate on this Mortgage Portfolio is conceivable, also solving the issue of single digit Mortgage interest rates.

Guess what?

The liquidity that will be unlocked from this structure is more than half of Nigeria’s 2016 Expenditure Budget and for a Government looking for a defibrillator to jumpstart the economy, such a crazy idea as this could just be it. The trickledown effect will be enormous and this will be way better and more targeted than the ‘Helicopter money’.

Crazy? Yes…but this is Crazy Season.

In most of the developed countries that we aspire to be like, Residential Mortgages as a percentage of GDP is well over 50%, in some cases like Germany it approximates 90%. 50% of Nigeria’s over US$520 Billion GDP is US$260 Billion. Imagine a Nigeria with Mortgage assets of US$260 Billion…that is N78 Trillion worth of mortgage financed housing units.

Imagine what N78 Trillion can do to the building materials and hardware sector.

Just pause and imagine!

You don imagine finish?

Oya, wake up!

But seriously, I take God beg all of una in the name of Oga Samankwe, his wife Osodieli and the 88% of Nigerian’s who are neither part of the exclusive middle class nor members of our super-rich cabal….

Nigeria Governmenti oh!!!!!!!! The Housing Affordability Gap is real!!!!

Bridge it and you will have solved almost 50 to 60% of Nigeria’s Affordable housing problem.

It is your responsibility!

Honestly, it is that easy and the models abound.

I swear! I don tire!


2 Responses to “Samankwe’s ‘I Don Tire’ – An Average Nigerian’s Quest For Affordable Housing”

  1. Reblogged this on Richard Ali's Blog and commented:
    “So you hear things like, “I don reach foundation level” or “DPC (Damp Proof Course) / Lintel level”. If the target home is a storey building or more then the home owner’s savings may run out at ‘Decking’ Level after which he will cover the staircase access with a roofed small hut that has come to be known as an ‘I don tire’, an euphemism for exhausted savings. The ‘I don tire’ protects the staircase opening (and by extension, the completed lower floor) from the elements, particularly the rains, pending when the home owner saves up enough money for the second phase of the project.”


  2. Ovie Mukoro Says:

    Oga Jeks, this is not a bad idea at all. It certainly cannot be worse than if we maintain status quo.


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