Cooperative Societies as a Panacea to Housing Deficits in Nigeria – Lawal

Introduction
Throughout human history, housing has been playing two major roles in a man’s life.

Economically, housing constitutes an important provision to a nation. It provides not only shelter but also security, comfort, and dignity. It is also a social necessity because good housing enhances healthy living which in turn influences human labour productivity. It also stimulates investment in other sectors of the economy.

For these reasons, much attention and premiums are often put in place on home ownership no matter the age, sex, income, or type of job the head of a household does in any part of the globe.

Despite the availability of abundant, unused, and ripe land at the periphery of most towns and cities in Nigeria, accessibility to low-interest rate financing constitutes the major hindrance to the easy acquisition of affordable housing among low and middle-income earners in the country.

Various Research has shown that land acquisition and building a home require incredible determination. UN-Habitat recorded that affordable housing is inadequate, though those who have access to what can be regarded as adequate shelter find such shelter unaffordable.

In many countries, Nigeria inclusive, the socio-economic and constant political changes over time had put pressure on governments, thus constraining their involvement in meeting the housing needs of the teaming and ever-growing populace.

This reality has led the government at various times to embark on policies such as Structural Adjustment Programme (SAP), Privatization/Commercialization, Public and Private Partnerships (PPP), Monetization of public servants‟ benefits, etc.

All these policies were geared towards shifting from public financing, management, and responsibility for the basic societal needs of the common man through private initiatives. Experience, over time, has shown that the non-availability of cheap and adequate finance has been the main reason why private sector developers often fail to take up the responsibility of championing the affordable housing provision issue in the country.

Globally, the world is currently witnessing two different demographic trends. While in industrialized countries birth rates are falling and life expectancy is steadily increasing, in developing countries, such as Nigeria, the reverse trend holds true. In Africa, the birth rate is still at high levels, with the majority of the population being below the age of twenty years.

A growing population portends pressure on the ecological system, thus increasing the need for food, shelter, jobs, and other basic necessities of life. The demands of the ever-growing population have created further problems of developable land scarcity; and conflicts over the use and ownership of land, hence, the ever-increasing rate of urbanization with rapidly growing slums and squatter settlements within cities in developing countries such as Nigeria.

The resultant effect of the inability of governments across the globe, especially in developing countries such as Nigeria, to address the needs of the growing population, in such areas as housing and employment generation, has inevitably led to systematic decay of value systems.

Family structures, which from time immemorial have always been a very reliable and effective system of social security have disintegrated thereby leaving the weaker and vulnerable members of the society to suffer.

The gap between the rich and poor has continued to widen within many societies, especially in the developing countries. Poverty, unemployment, and social disintegration often result in isolation, marginalization, and violence.

With limited and dwindling resources at the government’s disposal, it has become impossible for the government alone to cater to the current shortage of housing and poverty being encountered by the citizenry.

While these problems affect all countries in one way or another, there is a general consensus that the situation of most developing countries, particularly of Africa, is critical and requires special attention and action.

As a means of addressing the challenges facing most developing countries, I, therefore, find it imperative to identify the potential of cooperative societies through which members of a community could collectively provide the needed funding for their home ownership and other necessities of life at the lowest rate of interest, friendly repayment terms, and stress-free co-operative loan administrative processes thereby unconsciously lifting the societal spirit and by extension reduce drastically the poverty within the society.

Co-operative Societies in Nigeria
On the basis of the gradual denudation of the Nigerian traditional communal welfare system by colonialists and neo-colonialists to a society, where people tend to think of everything as business and essential services as being fragmented among investors, management, and customers, that is, those who own, those who control and those who use, with each of the three elements looking after its own interests, are the very antithesis of co-operatives.

Co-operative societies are enterprises in which owners, those who control, and those who use are all the same people. Co-operative Societies like other business organizations are established to meet certain needs. They can be classified into four broad categories, according to the tasks performed. These include marketing, purchasing, service, and processing associations.

There is hardly any workplace in Nigeria today particularly government establishments, where a cooperative society is not operational. Their operations are quite effective because transactions of money are carried out in conjunction with the employers on behalf of the staffs.

For example, staff savings into cooperatives are deducted at source and repayment of loans is also done through deduction from staff salaries as instructed by the operators of the societies. The cooperative societies mobilise funds for use in the sectors where funds are needed and also create in the members‟ the spirit of savings.

The motivation behind the formation of cooperative societies stems from the need to encourage thrift among members and to pool these savings into a fund so that members can borrow from the pool should the need to borrow arise.

The depositors also constitute the borrowers most of who knows one another through some common bond and these pre-existing social connections help to circumvent problem of imperfect information and enforceability.

Cooperative societies are useful for providing easy access to “cash” in a convenient and less stringent manner. Members do not have to provide collateral for loans as required by banks. Loan processing is quick and usually available within one or two weeks. Loans from banks can take up to six months due to the demand for several documents and administrative processes to ensure that risks are minimized if not totally avoided.

Cooperative societies‟ activities reduce considerably the level of poverty in society by making loans more accessible to low-income earners based on their saving capabilities. Cooperative members have been able to expand their businesses and by extension increase their profit margins and accumulate some savings in their accounts as a result of cooperative assistance.

Studies have concluded that cooperative societies have positive effects on members‟ welfare and that the role of cooperative societies in poverty reduction and capital formation cannot be overlooked in the development process of any country, particularly in less developed countries like Nigeria.

Studies have shown that the cooperative society’s approach provides the best funding alternative to all other economic groups and schemes. With 48,856 active co-operative societies in Southwestern Nigeria as of June 2023, one can reasonably deduce that the spread of cooperative societies in the country contributes significantly to the provision of basic needs of members at low and fixed interest rates in the area of direct purchase and sale of food and household items from companies, housing, thereby eliminating middlemen, collective large scale farming, harvesting and sale of produce direct to end users, group acquisition of land for co-operative society members, housing development, provision of welfare bus services at lower transport charges, etc. each cooperative society decides its area of priority in terms of the pressing need of members.

The available urban land is un-serviced land, servicing such land presents financial challenges to housing co-operatives and especially those consisting of low-income earners.

The lack of local authority services in urban areas is therefore apparent. Co-operative mismanagement, partly due to lack of technical, managerial, and administrative skills and the low levels of education among co-operators is a major problem causing many co-operatives to remain inactive in their housing projects.

There are generally low levels of co-operative housing development in urban areas. However, there is a lot of potential in residential housing development through co-operatives.

Recommendations
To make cooperative societies in Oyo state and other part of Nigeria to perform effectively, the following recommendations should be vigorously pursued:

1. The Government of Nigeria should subsidize public land for the urban poor to cheaply obtain land for constructing residential houses. This could be in the form of offering public land to co-operatives at cheaper prices for residential development. This should go along with the government’s encouragement of local authorities to eliminate speculation in land suitable for building projects, especially on the outskirts of urban centers. This land could be made available to co-operatives at lower costs or at long-term renewable
2. Minimal servicing of urban land by local authorities for residential housing development should be ensured in order to reduce the financial strain posed on housing co-operatives in their housing projects.
3. Rapid urbanization and high urban and rural birth rates should be arrested in the form of emphasizing family planning programmes in both rural and urban areas. This should be done by incorporating such programmes and giving them more emphasis as part of the wider national development programme.
4. A chance could be given to housing co-operative societies to use foreign capital in their housing projects. This is with a view to assessing the success of these projects and encouraging more co-operatives to engage in residential housing development especially in urban areas, since the major problem hindering their development is finance oriented. This could be done by giving the more promising co-operatives the first priority. This is because there is an apparent need for housing co-operatives to be supported financially by external capital.
5. A more effective mechanism of dealing with those cooperative leaders who manage co-operatives and especially those who misappropriate cooperative funds should be sought. Court procedures should be followed more closely in dealing with such cases.
6. The national housing policy should provide for adequate credit facilities in the form of long-term repayment periods and low-interest rates to enable especially low-income co-operatives to produce more residential houses. This would also prevent delays in large-scale housing schemes for families in the lower-income groups.
7. The housing policy should consider more appropriate and particularly cost-effective standards of housing in order to cater to low-income earners trying to obtain housing through cooperative efforts.
8. The application of cooperative principles and practices in the field of housing with all the relevant financial, legal, administrative, and accounting information should be provided in clear language for all housing cooperatives. This would expose the public to the wider advantages of cooperation and therefore, encourage membership and guide the existing cooperatives in their operations.

To Housing corporation
As the overall national housing society, Housing Corporation has a great challenge now and in the near future in making co-operatives more effective in providing particularly low-income urban residential housing. The following are some of the suggestions to the Corporation.

1. The Housing Corporation should promote further research on semi-permanent construction materials that are locally available and ensure their wider use and development. These should be used especially by low Income housing co-operatives and this would make it much cheaper than the use of permanent construction materials which are much more expensive. This would eventually reduce building costs for the latter income groups.
2. The Housing Corporation should carry out nationwide educational campaigns by directly involving cooperative members and cooperative leaders in seminars and Workshops. This could be done through making these groups of people aware of general co-operative development and management processes and especially on specific aspects of these processes. Generally, therefore, an educational campaign is necessary to encourage more cooperative housing participation.
3. The Housing Corporation should assist in the establishment of new co-operatives and therefore, encourage more co-operative membership from all income groups, household sizes, educational levels, ages, and from both sexes. This would eventually lead to indiscriminate residential housing through cooperatives. Through such programme, the Housing corporation could also facilitate the exchange of ideas and experiences among co-operatives in order to create challenges for the less successful housing co-operatives.
4. The Housing Corporation could also carry out wholesale purchases and later production of construction materials for housing co-operatives nationwide. This would assist co-operative housing projects to obtain building materials more cheaply directly from the Housing corporation, with the latter getting a small margin of profit to help in its operations. The Housing corporation can also provide architectural, lawyer, and auditor services at lower charges than is the case.
5. The Housing corporation should give advice to housing cooperative societies about such specific matters as making realistic cost calculations, and investment plans, negotiating construction loans, building techniques, and bookkeeping.

The Case Study of New Housing Reform Obtaining any type of loan from a commercial bank is a time-consuming exercise. Apart from the need to meet loan requirements, the issue of unstable loan interest rates at short notice becomes a nightmare for borrowers.

As a means of assisting members of the cooperative society, flat interest rates on facilities are spread evenly based on the periods of repayment major benefit of the decision of the Society to acquire land for members is the fact that the purchase of each plot of land is permitted to be paid for by all members in instalments through deductions from members‟ salaries so as to carry all income groups along.

The cooperative society has been a blessing in situations where Institutions and organizations where such are hosted join hands with the officers of the Society especially as it relates to savings contributions and loan repayment deductions from source.

The existence of a Cooperative society relieves the host community of incessant requests for financial support in the form of loans to meet staff pressing financial needs. As a society, the government needs to encourage the growth and sustenance of cooperatives in Nigeria with a view to eliminating poverty amongst the citizens in the country.

However, if the three arms of the Nigerian government fail to get the Cooperative movement off the ground, one of the most potent developmental tools available to those most in need may be wasted thereby rendering the masses powerless and perpetually poor.

Challenges Affecting Co-operative Housing across Nigeria
Low incomes are a major problem facing housing co-operatives in urban areas. This has obvious strains on the co-operative housing projects’ financing leading to low productivity of co-operative houses.

One of the major problems related to this is that of the National Building Code of Nigeria which has not been realistically set to assist low-income earners to obtain houses through co-operatives.

The high building standards set result in high building costs which are beyond the financial capability of most housing co-operatives. High costs of urban land and building materials and the scarcity of cheap urban land are major obstacles facing housing co-operatives especially those constituting low-income earners, thus making their projects lag behind or become dormant.

To Co-operative Societies

1. Co-operatives should recruit more members from the low-income groups of people at lower membership fees in order to attract more needful households into co-operative housing. To win such membership, small-scale ownership of co-operative property could be guaranteed to the members.
2. Co-operative members should be encouraged to attend conferences and seminars which have been organized on co-operative aspects. This would improve on members’ understanding of their full rights, privileges, and responsibilities in their co-operatives. This would also help them to appreciate the activities of co-operatives and therefore, improve their initiatives to work towards faster and more housing production.
3. Co-operatives should employ more educated and qualified personnel in their activities so that their housing projects are not delayed due to ignorance. Co-operatives should seek advice and more details of this from the Housing Corporation.
4. Income-generating activities should be encouraged within co-operatives that directly involve the co-operators, especially in those cooperatives constituting low-income members. This would make such cooperatives financially more self-supporting in order to avoid external financing problems. Such activities should be emphasized within the ‘informal sector.
5. Co-operatives dealing with housing should accept lower standards in their housing projects. This would reduce building costs and therefore have such co-operatives incentives to build more houses. Pieces of Advice should be sought regarding these standards.
6. Co-operatives should consider housing projects appropriate to their members’ needs in terms of household sizes. This would ensure that large households are well catered for.
7. Co-operatives should ensure that their activities benefit their members. Their members should, therefore, take the first priority in acquiring housing at affordable prices before selling them out to the non-members. Even if the latter is done, this should be seen to directly benefit the members.

Conclusion
If the Government of Nigeria followed the guidance from the national development plans which emphasize the importance of the housing sector and that of cooperatives in housing, there could be a better era for co-operative housing. However, even though the official housing policy has many good and realistic aims, these have not been put into practice.

The number of housing co-operatives and the number of co-operators should increase with time when the short-term problems discussed earlier in this study have been dealt with. This is because the need and demand for housing is likely to be there for a long time and are also likely to grow.

Nevertheless, there is a lot of potential in co-operative housing in Nigeria but there is a need for special financial support to the existing housing co-operatives and proper co-ordination of co-operative housing activities. Perhaps the most complementary action to be taken is the creation of jobs to raise the incomes of poor households so that they can afford better housing through co-operatives.

There is a need for the integration of co-operative societies into the framework of housing supply in Oyo state and other states of the federation with provision for immediate tapping into the land resources of societies that already possess such because they have enough land in their possession to lift thousands of households to home ownership. This implies that in a drive towards attaining sustainable development goal 11.1, cooperative societies must be regarded as partners. There is therefore a need to create support networks to enable them to operate more efficiently as is being done internationally.

This would see the connection to, and linkage of cooperative societies with housing construction input suppliers such as building materials connection with local professional bodies and associations to facilitate access to professional services and linkage such as building access with other government ministries whose activities relate to housing. This would reduce production and transaction costs in the housing sector.

Since there is an office of the Sustainable Development Goal in Oyo state and states of the federation. The implementation of those actions can be given greater impetus. For African cities facing similar housing challenges as Ibadan and other cities in Nigeria, support networks for the cooperative sector should also be considered.

This is because cooperative societies have been found to perform better in countries where they enjoy some form of government and institutional support. The capacity of cooperative societies to release affordable cooperative housing to low-income households in African cities is considered to be highly significant if they are formally declared as affordable housing providers and supported as such.

In a nutshell, dedicated recurrent funding by the government could systematically address the issue of non-availability of affordable housing for the low-income earners in Oyo state in particular and Nigeria as a whole.

Toyeshe Lawal, an estate surveyor, is the Director of Estate, Town Planning, and Survey, at Oyo State Housing Corporation. Writes from Ibadan.