Engineer Kabir Musa Umar is the pioneer MD of the Federal Housing Authority (FHA) Electricity Distribution Limited (EDL). In this interview, he discusses the urgent need for Nigeria to fix its mortgage system in order to guarantee affordable housing as well as FHA’s recent licence acquisition from the Nigerian Electricity Regulatory Commission (NERC)

Where do you think Nigeria hasn’t gotten right in delivering affordable housing?

One word; Mortgage. That is where we got it wrong or where we’re still getting it wrong. And I’ll explain. You see, whether it’s affordable housing, high-income, or medium-income housing, you must have a very strong mortgage system.

Left to me, I am not even sure it’s the Nigerian mortgage system itself that’s faulty or perhaps it’s the implementation.

I have not done any specific study to determine exactly what the issue is, but clearly, our mortgage system is not working.

You can’t expect the government to build a low-income house for N8 million N12 million and then expect a civil servant earning N70,000 or even N200,000 monthly to buy it. I don’t know if that’s magic; but it’s not realistic.

What I expect is for the mortgage system to be strengthened in a way that people can own these houses without necessarily paying upfront or outright, but rather it should be paid gradually. This happens everywhere in the world. I don’t know why we can copy the presidential system or parliamentary system of the Western world but not the mortgage system.

I will give you an instance. If you carry N100 million and go to Brighton, Manchester, or even Southampton to buy a house in the United Kingdom  and make a one-off payment, the next day, they are  picking you up.

They pick you to explain how you got that kind of money and how you’re making that kind of one-off transaction. It doesn’t make sense to them. Meanwhile, here in Nigeria, people are paying one billion for property without blinking.

And in most cases, the people paying that kind of money don’t even need the house.

So how can this issue be addressed?

First, for me, is to strengthen social housing and also ensure that our mortgage banks are equipped with the capacity to deliver mortgage loans to Nigerians.

For instance, at FHA, we have two approaches: social housing and housing on demand. Housing on demand is for people up there in society. They come to us, give us the kind of housing they want, and we deliver to their taste. Those are high-income earners.

But social housing should be targeted at people who, ordinarily, cannot afford houses. So you build something basic, do some research, maybe questionnaires to find out what people in different locations want.

Secondly, you design simple homes that can be upgraded over time. Something they can move into while paying the mortgage over several years.

Then our mortgage banks too need to have that capacity to deliver mortgage loans to Nigeria at affordable rates.

If we continue in a situation where people are expected to pay for homes upfront, the housing sector will keep running in a disjointed, inefficient way. Because ideally, even people who can afford it should go through a mortgage system.

Your company, which is a subsidiary of the Federal Housing Authority (FHA), recently got a license to generate and distribute power for your estates. Tell us about it?

Yes, the company was incorporated on the 4th of August, 2023. Subsequently, we submitted an application to the Nigerian Electricity Regulatory Commission (NERC) to obtain a licence, which is critical to our operations. Without it, our activities wouldn’t have legal backing. I’m happy to share that we were recently issued a Distribution Licence by NERC. This means we’re now authorised to begin operations in our designated estates.

As I mentioned earlier, the idea is for the Federal Housing Authority, through this company, the Electricity Distribution Limited (EDL), is to own and manage the power infrastructure of its estates nationwide. That’s where we are at the moment, and we consider this a significant achievement.

Looking ahead, we plan to engage technical experts to explore the possibility of building our own generation plant. This would give us full control over our infrastructure.

Currently, as a distribution entity, we rely on transmission or generation companies to supply power. But if we generate power ourselves, we can control the cost and tariff.

Right now, we’re subject to the terms set by the providers we buy from, which is a major limitation. But if our plans materialise, we aim to supply power at rates lower than what current distribution companies offer. That’s our objective.

We believe that even within residential areas, we see people running small-scale industries—tailoring shops with sewing machines, or mini ice block factories operating from their homes. If there’s no power, their businesses stall. Power directly affects quality of life, productivity and development. It’s an undeniable index of national progress.

Which of the estates are you kick-starting with?

We are beginning with our flagship estate, Zuba.

 Why Zuba?

Zuba is free of encumbrances. Ideally, I would have preferred that we start with Gwarinpa, but Gwarinpa is currently operated by AEDC. They’ve already been allocated the reserve and are the ones generating revenue there.

For us to take over operations in Gwarinpa, AEDC would need to formally withdraw or enter into an agreement with us. That process involves negotiation and collaboration, especially considering that all the infrastructure in Gwarinpa was built by the FHA. And just to clarify—Gwarinpa is actually not just an estate, it’s a district—Gwarinpa District. It’s much larger than your typical estate.

So, Zuba became the most logical starting point. It’s newly completed and hasn’t been handed over to AEDC yet. That gives us a clean slate. The injection substation there was built by us, and we also installed 21 500kVA oil transformers. We’re currently working with a metering company to supply and configure the meters. Once that’s done, we’ll launch operations.

After Zuba, what comes next? I understand FHA has estates in other parts of the country.

Yes, after Zuba, we’re moving to Bwari Estate, which is also not encumbered and is still under construction. That means we can move in as soon as it’s ready.

As for Gwarinpa, like I mentioned, we’ve already engaged the Minister of Power on the issue. There are some complications tied to the Bureau of Public Procurement (BPP) transactions, but we’re working through them. We believe that by the end of this year, we’ll have full control.

In Kano, we’ve paused a bit because the state is in the process of setting up its own electricity licensing agency. We prefer to wait for that process to conclude before we fully engage.