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Effects of Private Sector Participation in the Provision of Housing in Owerri, Imo State

ABSTRACT                                                    

In most developing countries today, the provision of housing is grossly inadequate despite several decades of direct government intervention in the housing sector. It has been observed that the phenomenal rise in population, spontaneous increase in size of most Nigerian cities have led to acute shortage of decent and affordable dwellings. This study examines the effects of private sector participation in the housing provision in Owerri. In order to achieve this, the objective of the study were firstly to examine the effects of private sector participation in housing provision, secondly to examine the factors that necessitates the implementation of private sector in housing delivery and thirdly to analyze the effects of private sectors on PPP projects. The method adopted in carrying out this report is extensive literature review with journals, newspapers, seminar papers, professional magazines and conference papers including exploring the internet. Primary data source is from well structured questionnaire to review relevant information from different parties in the construction industry while the secondary data source is from journals, seminar papers, magazines etc. The simple percentage method were used in the analyses of the data and the chi-squared statistical tool employed to test each of the hypothesis .The findings deducted from the research were that lack of finance from government, poor quality of inhabitable houses, population exploration and urbanization, poor leadership and poor government policy, all led to private sector participation in housing provision. The study concluded that the government should provide enable environment to enable private sectors in the provision of housing to the public.

CHAPTER ONE

INTRODUCTION                                                                                            

1.1 BACKGROUND OF THE STUDY                                       

Housing has been generally recognized as one of the basic needs for man’s survival. Housing goes a long way to determine not only the social standard of a man but also that of a nation and a community (Eni, 1998, Ezirim, 2005). Also, housing depicts the economic situation of a nation as it is directly related to man’s welfare and affluence. Housing has a profound impact on the health, welfare, social attitudes and economic productivity of the individual. It is also one of the best indications of a person’s standard of living and of his or her place in the society. Despite the essential role played by housing as a basic need, an adequate supply of this commodity has been lacking in virtually all societies throughout history. The situations particularly serious in developing countries where population growth and urbanization is increasingly very rapidly and where the gap between housing need and supply is greatest. Generally, the supply and demand for housing takes place in a housing market.

According to Bourne (1981), the housing market is a set of institutions and procedures for bringing together housing supply and demand, that is, buyers and sellers, renters and landlords, builders and consumers, for the purpose of exchanging houses and housing services as resources. It examines in details the present and future trends in the supply of and demand for housing within a given area. Basically, the housing market analyses identify supply and demand factors and needs and establish procedures and processes for meeting the needs. Unlike other types of markets, the housing market has a number of distinctive characteristics. It deals with the exchange of rights and property and is, for all intents and purposes. The housing market has no specific market place where exchanges between buyers and sellers are done. There are two distinct types of housing market – the public sector housing market and the private sector housing market. The participation of the private sector in housing delivery consists of individuals and corporate organizations. The sector provides houses for direct use by their staff and for rental use or outright sale to the public. Unarguably, the private sector has been more efficient and reliable in the production of housing than the public sector. In many countries the private sector plays an important role in housing development. It constructs housing either or sale or rent for different income groups. The private sector should participate in the construction of housing for all categories of the population either for sale or rent, manufacturing and supply of building materials in the housing construction sectors, infrastructure development for human settlements and encourage members of communities to improve their living environment through community participation in projects. The term “housing” has been viewed differently by various professionals but central to each definition is its role of providing protection and comfort to its inhabitants. Therefore, the importance of housing on the life of individuals, communities and even nations can never be over emphasized. As a result of this, having access to a decent and affordable housing accommodation was declared as a basic human right by the UN Article (25) 1 of 1948, which stated that all member countries of the UN are bound to strictly adhere to the provisions of the Article (Housing Right Legislation, 2002).

In keeping with the foregoing functions and expectations, the private sector had been consistently providing over 90 percent of the housing stock in Nigeria (FGN, 2002). Also, by 2010, it has been asserted that the private sector housing contributed about 98 percent of the existing housing units in the country (Mofinews, 2010). In Owerri, the 2006 Population Census revealed that the private housing sector contributed a paltry number of 5,625          or 6.0 percent. Thus, without doubt, housing in the city of Owerri is private sector driven. This study specifically concentrates on the private sector participation in the provision of housing in Owerri. It has been observed that in many cities, especially within the developing countries, the population increases without a proportionately corresponding increase in housing supply. Nubi, (2002) confirms this by asserting that, “in Nigeria the supply of new housing has not been able to match the demand…”. The consequences of this development are many, including a manifestation of high occupancy ratios, high cost of rental accommodation and the emergence of abandoned and destroyed urban scape (Jacob and ofem, 2007).

This study in the light of the various discourses made about housing matters, has attempted to critically examine the effects of private sector participation in the provision of housing in Owerri.

1.2     STATEMENT OF THE RESEACH PROBLEM                 

Private sector constitutes one of the major pillars of housing delivery and maintenance system. Indeed, without a well-organized and efficient housing provision mechanism, the goal of a housing development and maintenance development will be largely unattained (Nubi, 2002). Private sector has been recognized as an important, almost indispensable factor in the housing delivery and maintenance system (Abrams, 1964). There are several debates as to whether private sector participation in the provision of housing is effective and produce projects that offer better value for money. Dixon et al (2005) maintained that to date a lot of project procured through PPP/PFI are subject to debate over its effectiveness though a number of projects have delivered better than the traditional procurement. It’s disturbing that in spite the attention given to PPP by researchers since it was introduced in the construction industry and efforts made by governments towards achieving more effective delivery of PPP projects, the project continues to fail even in countries with long history of its application (Ibrahim et al, 2006). The private sector faces a number of difficulties in housing provision, which hampers it in large-scale construction. Housing provision is enormously costly and the private sector, which is essentially profit-driven, cannot be expected to produce a socially optimum output with adequacy in quantity and standards, neither can it allocate housing resources equitably. This is due to distinct peculiarities of housing such as its heterogeneous nature, high production costs relative to income, high transaction costs and low elasticity of supply.

In Nigeria, Imo state, Owerri city in particular, many projects were held up, terminated or even failed to take up at various stages thus questioning the effectiveness of private sector participation in the provision of housing in Owerri. Based on these the researcher seeks to examine the effects of private sector participation in the provision of housing in Owerri.

1.3   AIM AND OBJECTIVES

1.3.1   AIM                                                                            

The aim of this study is the effects of private sector participation in the provision of housing in Owerri.

1.3.2   OBJECTIVES

In order to achieve the aim of this research, the objectives are:

  1. To examine the effects of private sector participation in the provision of housing.
  2. To examine the factors that necessitates the implementation of private sector in housing delivery.
  3. To analyse the effects of private sectors on PPP Projects .

1.4   RESEARCH QUESTIONS

  1. What are the effects of private sector participation in the provision of housing?
  2. What are the factors that necessitate the implementation of private sector in housing delivery?
  3. What are the effects of private sectors on PPP Projects?

1.5   HYPOTHESES

Ho:    Private sector involvement have not helped in effective housing provision to the public in Owerri

Hi:  Private sector involvement has not helped in effective housing provision to the public in Owerri.

Ho: Lack of finance and planning, Poor quality and leadership are not parameters that necessitate the implementation of private sector

Hi: Lack of finance and planning, Poor quality and leadership are parameters that necessitate the implementation of private sector

Ho: Private sectors are not effective on PPP projects, risk management and maintenance

Hi: Private sectors are more effective on PPP projects, risk management and maintenance

1.6   SIGNIFICANCE OF THE STUDY

Despite the concerted efforts by private sectors, governments and scholars worldwide to improve projects delivery, many such projects continues to fail, courtesy of poor planning and implementation of the projects, weak policies and regulatory framework, poor financing, bribe and corruption with regards to procurements of projects, poor monitoring and evaluation among others. As private sectors are increasingly becoming involved in project execution both in Federal, State and Local government levels, the need for a study that will identify possible reasons for success and/or failure of such projects with a view to offering possible suggestion on how to promote the successes and prevent future failure. This research initiative will point out the directions that may be helpful or give a greater chance of success of the private sector participation of housing in Owerri.

1.7   SCOPE OF THE STUDY

The scope on the effects of private sector in the provision of housing in Owerri will cover the rationale for private sector involvement in housing, its implementation, the effects of private sector participation in housing provision and the concept of public-private partnership.

1.8   LIMITATIONS

This study was limited by verifiability of some facts due to passage of time (with attendant change in personnel, inaccessibility to useful records for fear of exposing some classified information about the office. The reliability and validity of the sources of both primary and secondary data are limitations since the study is subject to weakness inherent in the interview guide and questionnaire, for example, bias in responses cannot be ruled out. The researcher spent much time explaining to the respondent what they were required to do. Despite these limitations, the researcher continued the work with data collected, which were enough for work.


Pages:  83

Category: Project

Format:  Word & PDF

Chapters: 1-5

Material contains Table of Content, Abstract and References

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Written by Divine Portal

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