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TO RUEHC/SECSTATE WASHDC 0015
INFO RUEHUJA/AMEMBASSY ABUJA 9702
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UNCLAS SECTION 01 OF 02 LAGOS 000255 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV EAID EIND EFIN NI
 
SUBJECT: NIGERIA: FEDERAL, STATE SOLUTIONS TO ADDRESS NATIONAL 
HOUSING DEFICIT, BUT MORE REFORM NEEDED 
 
LAGOS 00000255  001.2 OF 002 
 
 
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PLEASE, ZFR IMI ZFR LAGOS MRN 255 AND BLANK ALL ASSOCIATE MCNS 
AND MRN, NEW MSG WILL BE SEND WITH NEW MCN. 
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LAGOS 00000255  002 OF 002 
 
 
shops in Ilasan, a community located about 40 minutes drive outside 
of Lagos' commercial center. (Note: TransAtlantic uses the Nigerian 
Federal Government's definition of low-income housing, i.e. housing 
costing between Naira 2.5 million to 5 million (USD 20,000 to 
40,000. End Note) The construction in Ilasan would create 
approximately 2,000 local jobs, Williams estimated. TransAtlantic 
will partner with the Lagos Building Investment Company Limited 
(LBIC), a primary mortgage institution and private-public venture 
supported by the Lagos State Government.  Under this partnership, 
LBIC would offer potential buyers home loan financing, provide 
TransAtlantic the estate property, and thereby own 30 percent of the 
project. In light of Nigeria's housing laws, TransAtlantic will 
utilize Asset Backed Commercial Paper (ABCP) conduits.  In using 
ABCP, LBIC would purchase individual loans from Nigerian banks, 
securitize them, and sell them to investors in order to replenish 
the banks' credit line. 
 
Police, Military Housing Programs Stall 
--------------------------------------- 
 
¶8. (U) However, public and private housing projects with promise 
have faltered.  TransAtlantic's Sheen told EconOff that state 
governments received appropriations from the Federal Government in 
early 2008 for a police housing program. That program has fallen by 
the wayside as state governments failed to allocate land and to see 
through the projects. TransAtlantic had planned on building 100,000 
housing units for the Nigerian police in each of Nigeria's 36 states 
as part of the program, he said. 
 
¶9. (U) The Nigerian military had devised a similar housing scheme 
for its retirees in partnership with United Bank for Africa (UBA). 
Under this program, 20 percent of the government's allocation to a 
retiree's pension would be diverted to payments on a mortgage for a 
period of 15 to 25 years.  Conceived four years ago, the scheme took 
off in 2007 with the construction of 50 houses in Kogi State, but 
has been grounded since because the military has not been paying its 
retirees either pensions or post-service separation incentives. 
 
¶10. (U) Private low-income housing projects in Kaduna, Rivers, and 
Anambra states have stalled as well, Sheen said. The state 
governments have allocated the land for the projects, but U.S. 
investors have not moved forward with the discussion.  TransAtlantic 
hopes to conduct a second housing feasibility study in partnership 
with the U.S. Overseas Private Investment Corporation to update one 
done approximately five years ago. 
 
Developers Run Gauntlet of Extra-legal Taxes 
-------------------------------------------- 
 
¶11. (U) Despite advances in other areas, private developers continue 
to suffer at the whim of government officials, First Bank's 
Santuraki said.  In Lagos State, government officials frequently add 
on additional levies, and developers have to absorb some of the 
costs and hope to pass the remainder onto the customers.  This is 
easier to do with prime property, he noted. 
 
¶12. (U) Comment: State governments need to realize any effort made 
at reducing bureaucratic bottlenecks and streamlining policies at 
the state level will be undermined by a lack of accountability and 
transparency in the system.  Moreover, patchwork housing development 
schemes will only be a drop in the bucket in terms of the national 
housing deficit.  Without real reforms to existing land and housing 
policies, good business sense will deter private investors and 
developers from making long-term investment. End Comment. 
 
¶13. This cable was cleared with Embassy Abuja. 
 
BLAIR