The severity of the housing supply deficit in Nigeria has necessitated the participation if co- operative societies in the housing sector. However, their activities have remained under- researched. The aim of this thesis is to establish the scope and constraints of co-operatives’ housing supply activities in order to develop a set of guidelines that would integrate them as functional housing suppliers in Lagos State. Objectives of the study are: one, to assess the current activities of co-operative societies in housing supply; two, to determine constraints to their participation; three, to examine differences in constraints experienced by employment based and non-employment based co-operatives and four, to examine success factors of co-operative societies that have successfully developed housing on their land. Objective five recommends an action plan for their effective participation in housing supply. The study adopts an explanatory, sequential QUAN-qual mixed method design that starts with a major, quantitative study, followed by a smaller scale qualitative study. For the quantitative phase, a survey based on systematic random sampling of co-operative leaders was carried out; a total of six hundred questionnaires were distributed with response rate of seventy five percent being achieved. For objectives one, two and three, analysis was done with descriptive and inferential statistics with the use of independent T-tests and multivariate techniques. For the qualitative aspect, a Focus Group Discussion was carried out and analysis done with a computer software. This was carried for objectives one, two and four. Integration of results was utilized to achieve objective five. Findings show that co-operative societies are most active in land acquisition activities but are constrained by eight categories of constraints such as production costs, pre-construction costs, issues in member involvement and lack of external support, amongst others. Findings also show that across the three activity areas (land, finance and housing construction); employment based co-operatives are more active in the housing supply process than non-employment based co- operatives. As contribution to knowledge, the study discovered seven crucial success factors for co-operative societies’ involvement in housing supply which have not been identified by previous researchers in this study area. These provide fresh policy directions for the sector. The study also generated a time-bound, integrative action-plan to release thousands of co-operative housing units in Lagos State.



Affordable, decent housing is beyond mere assemblage of bricks and mortar (Ayeniyo, 2011; Nubi, 2015). Housing’s fundamental linkage to good health, well-being and economic development is evidenced in its inclusion in global and regional development agenda. It is both an investment and consumption good (Glaeser and Gyourko, 2017), being a major source of economic growth for countries such as China (Sun, Zheng and Geltner, 2017) and in countries such as Britain and America, constituting a major source of household wealth for over seventy percent of the households who own their homes (Gorea and Midrigan, 2017).However, it is very unlike other assets. While it is a great source of investment, its high capital requirements has resulted in itsbecoming a social needso that its attainment (or lack of)is often times a great sign of economic inequality in most societies (O’Dea, 2012).

The National Bureau of Statistics, NBS (2013) indicates that Nigeria’s major urban centres (Lagos, Abuja, Ibadan and Kano) are experiencing an increase of 20% in housing demand per annum; and over 65% of Nigerians reside in substandard homes in several slum communities due to inability to afford decent homes (Centre for Affordable Housing Finance in Africa CAHF, 2015). These are indicators of both current and future quantitative and qualitative housing need. The Federal Government had historically adopted a direct construction strategy to address supply shortfalls but this has achieved minimum results in over 20 years that it was practiced (Federal Government of Nigeria, 2002;Nubi, 2012; Obialo, 2005). Subsequent attempts to pass on the responsibility for housing provision to the private sector has also met with less than significant

success, with low rates of mortgage uptake (Nubi, 2006; Okonjo-Iweala, 2014) and preference of developers to build for the middle-high income earners who can afford to pay market-rates and also qualify for mortgage loans (CAHF, 2015; Eni & Danson, 2014; Nubi, 2010). This has resulted into a situation where decent housing reaches only a minor segment of the population. In trying to meet their housing need in the face of the multi-faceted problems surrounding housing affordability and access, most households then rely on self-financing through own equity, loans and gifts from friends and family, remittances from abroad and contribution from co-operative societies.

Co-operative societies, in particular, have long been utilized by households as a medium to address problems they are incapable of solving individually. From its origins by the Rochdale Society in the UK in 1844, co-operative membership has spread to other countries including Nigeria, which now has about 82,460 co-operative societies of various categories with over 1.4 million members in 605 local Governments (Enhancing Financial Innovation and Access EFInA, 2012). As obtains in other parts of the world, the co-operative societies operate in various categories. There are employment based co-operatives, which are domiciled in formal organizations and provide an avenue for employees to address their welfare issues. There are also various categories of non-employment societies (such as community based co-operatives, agriculture based co-operatives, artisanal co-operatives, gender based co-operatives and so on), all of which provide opportunities for people to assist one another outside the formal sector. Co- operative societies could therefore serve various purposes: production-based, consumer support, thrift and credit societies and so on, depending on the needs of its members.

Thus, given the rationale for setting up co-operative societies, the socio-economic importance of housing and its high capital outlay,there is a logical assumption that they should be involved in addressing the housing supply challenges in cities such as Lagos, which show visible housing need evidenced by large slum communities. This assumption is fuelled by the positive track- record of co-operative societies in achieving improved socio-economic outcomes for their members as evidenced in Aderounmu, Odeyemi & Adeleke (2014), EFInA, (2012), Ezekiel(2014) and Olaleye (2007). Indeed, the National Housing Policy of 2004 section 7.3(iv) and section 7.3(ix) placed on housing co-operatives, responsibility for direct construction, distribution of building materials and possibilities of accessing funds from the Federal Mortgage Bank of Nigeria (The Federal Government of Nigeria, 2002). In addition, academics and other stakeholders advocate for deeper co-operative societies’ involvement in the housing sector (Danmole, 2004; Ndubueze, 2009).However, despite these general optimism amongst key stakeholders that co-operative societies are veritable tools for increasing the nation’s housing stock, their current contribution to the nations’ housing stock remains insignificant (Ndubueze, 2009).

Inevitably, while the literature on co-operative activities in agricultural and commercial activities is available, there is scant empirical research on the extent and depth of current activities of co- operatives in the housing sector. This is evidenced by the non-recognition and non- documentation of their activities in the 2012 global compendium of co-operatives involvement in housing and their non-visibility in the housing policy framework for Lagos State in the last few administrations. However, anecdotal views suggest their participation in land assembly- as seen from various billboards in the city peripherals that announce vast acres of undeveloped land as

being owned by one co-operative society or the other. However, it is not clear the motivation (social need, investment or speculative) for these acquisitions. The efforts of some co-operative societies at housing provision for members are also to be seen in housing estates developments, but it is also not clear, the depth of these activities across the entire co-operative sector (whether employment based or non-employment based) in Lagos State.

The few studies on the activities of co-operatives in housing supply in Nigeria are also limited in some aspects, such that more research is needed in this area. For instance, Adeboyede and Oderinde (2013); Odum and Ibem (2011); Oyewole (2010) have studied the role of co-operative societies in housing finance and land assembly components of the housing development value chain in Ibadan, Ogbomoso, Oyo and Enugu. Also, in advocating for institutionalization of co- operatives societies in housing supply in Nigeria, other researchers such as Danmole (2004), Ndubueze (2009) and Nubi (2008) have provided descriptive appraisal of the co-operative system. In terms of methods, these studies have either adopted quantitative or qualitative approaches, and in terms of geographical scope, they have been directed towardsurban areas with less intense housing need than Lagos State. Thus, with the peculiarities of the state as the nation’s sole megacity which accounts for 31% of estimated national housing deficits (The World Bank, 2016) recommendations from such studies might not be applicable in their entirety to address the housing problems in the state.

It is therefore important to provide focused research specific to this case study area. In addition, in terms of subject area scope, past studies have been limited to housing finance and land assembly components of the housing development value chain. Moreover, these studies have not

shown a detailed analysis of co-operatives and housing supply that is based on theoretical postulates. It is important to note that despite the differences in research design, while all these studies agree that, as recommended in the National Housing Policy, co-operative societies should have a more impactful role in housing supply in Nigeria, they have not provided a depth of data that would provide policy directions for the sector in Lagos State.

This thesis therefore seeks to address these gaps by expanding the scope of research on co- operative societies and housing supply in Lagos State. This is to be done by utilizing a mixed method paradigm to provide a state-wide appraisal of the activities of co-operative societies along three key components of the housing supply value chain (land acquisition, finance and construction); thereby generating stylized facts on how they can be integrated as housing suppliers in Lagos State such that they can begin to fulfil their assigned role in the Nation’s housing policy.

Statement of the Research Problem

The central research problem that this thesis addresses is that of the limited participation of co- operative societies in housing supply in Lagos State, the need to ascertain the causal factors that have produced this, while also determining strategies by which the co-operative structure could be utilized to address housing challenges.

This problem requires research attention due to a number of reasons. For instance, the antecedents of co-operative societies in housing for rental and home-ownership in countries such as Pakistan, Poland, Sweden, Germany and Turkey indicate the critical role they play in the housing provision framework. These societies are also recognized as a pathway to achieving

housing supply and affordability goals in Wales; and in Egypt, Kenya, India and Malawi they have been supported by State agencies and international organizations to provide self-built housing for members and in supporting urban regeneration. In Nigeria, however, the situation appears not to be the same. Lagos, with a current population of 21million has the highest population in Africa and is expected to achieve a population of 28 million people by 2020.

The deficiencies in the institutional capacity to cope with the associated housing need are already evident. Literature avers that the state has a housing supply deficit of 2 million units, in addition to 3 million housing units that need to be upgraded to decent standards in order to improve the lives of close to 70% of Lagosians who reside in several slums across the State (Lagos State Ministry of Economic Planning and Budget, 2013; Nubi 2015). It is acknowledged that attempts have been made to address these deficits as records of the housing construction activities of the state governments are available with its ministries and agencies, the efforts of both corporate and individual housing providers are quite visible, but the contribution of the co-operative sector in housing supply in the state remains undocumented. This is a problem that requires research attention.

Another aspect of this problem is that while literature shows that although the number of registered co-operative societies in Lagos State rosefrom 1,040 in 2013 (Lawanson & Oyalowo, 2016) to 2,516 in 2015,only 14 are currently registered as housing co-operatives.However, other types of co-operatives are known to be involved in housing issues,for instance, employment based organizations and multi-purpose co-operative societies are also involved in housing provision for their members. However, probably because of the dearth of empirical study and

systematic data on the structure and workings of these activities, these efforts have not been given significant policy attention in the state.

Without a composite approach to address these problems, the implication is that the current housing activities of co-operative societies in Lagos State will remain unrecognized, unstructured and unregulated, and the potential that the sector has for increasing the housing stock will not be realized. If this situation continues, the housing need of co-operative members who have probably joined co-operatives to satisfy capital intensive needs such as housing, would remain unmet and the potential contribution of co-operatives to reduce the housing deficit in Lagos (and indeed Nigeria) would remain untapped. Besides, an empirical investigation would permit the use of theory in understanding the behaviour of co-operatives in the highly market dominated housing sector, and how decision making processes in these societies affect the depth of participation of co-operative societies in housing provision activities.

The current study therefore sets out to address the issues in the existing knowledge area about the activities of co-operatives in housing supply in Lagos State.

Aim and Objectives of the Study

The aim of this research is to assess the operations of co-operative societies and their housing provision activities in Lagos State, with a view to developing a set of guidelines that would integrate them as functional housing suppliers in Lagos State.

Accordingly, the objectives of this thesis are to:

1. assess the current activities of both employment and non-employment based co-operative societies across three levels (land acquisition, finance and construction) of the housing supply value chain;

2. determine the constraints to co-operative societies’ participation in the housing supply process;

3. examine the differences in the level of constraints experienced by employment and non- employment based co-operative societies;

4. determine the success factors of co-operative societies that have successfully developed housingon their land; and

5. recommend an action plan for co-operative societies’ effective participation in housing delivery in Lagos State.

Research Questions

The following are the research questions formulated to guide the study:

1. what are the current activities of both employment and non-employment based co- operative societies across three levels (land acquisition, finance and construction) of the housing supply value chain?

2. what are the constraints to co-operative societies’ participation in the housing supply process?

3. what are the differences in the level of constraints experienced by employment and non- employment based co-operative societies?

4. what are the success factors of co-operatives that have successfully developed housing on their land?

5. What action plan can be developed to enable effective participation of co-operatives in housing delivery in Lagos State?

Research Hypotheses

In line with the mixed methods design adopted for this study, not all the research questions have corresponding hypothesis. The following null hypotheses for research objectives one and three were found relevant for this study:

Ho1: there are no significant differences in the current activities of employment based and non- employment based co-operative societies across three levels (land acquisition, finance and construction) of the housing supply value chain.

Objective 2: No hypothesis is required.

Ho2 (Objective 3): there are no differences in the level of constraints experienced by employment and non-employment based co-operative societies.

Within objective 3, the following sub-hypothesis was tested:

Ho2a: there are no differences between employment and non-employment based co-operative societies with respect to transaction costs constraints.

Ho2b: there are no differences between employment and non-employment based co-operative societies with respect to housing production constraints.

Ho2c: there are no differences in the responses of co-operative leaders and co-operative members with respect to level of member involvement in land acquisition decision-making.

Ho2d: there are no differences between employment based and non-employment based co- operatives with regards to external support.

Ho2e: There are no differences in member satisfaction in co-operative loan management services across employment and non-employment based co-operatives.

Objectives 4: No hypothesis is required.

Objectives 5: No hypothesis is required.

Significance of the Study

The primary beneficiaries of this research are the over 1.4 million people who belong to co- operative societies all over Nigeria,co-operative managers and leaders, researchers, co-operative society regulatory agencies as well as policy makers and funding organizations.

In research objective one, the study presents the scope of co-operative housing activities to provide a better understanding of their activities in the housing sector. The result of this is useful for all stakeholders because it will serve as a baseline upon which other decisions relating to areas of possible intervention can be addressed. Thereafter, in research objectives two and three, the peculiar problems that constrain co-operative housing activities are examined in depth using both qualitative and quantitative means, and results provide rich contextual knowledge on why and how these constraints have emerged and are inter-related. Taken with research objective four that provides a narrative discussion of housing sector success factors from the co-operatives themselves, this study provides a template for sharing best practices amongst co-operatives societies themselves and useful guidance for funding agencies seeking to strengthen the participation of co-operatives in the housing sector.

The study utilizes the Transaction Cost theory to derive study variables, explain the behaviour of co-operatives in the face of housing market constraints and also utilizes the stakeholder and resource dependency theories to recommend actions necessary to improve performance of the sector. This is beneficial for researchers seeking theoretical basis in this study area. The study i

based ona pragmatic paradigm executed on a mixed method design. This permits the linking of quantitative and qualitative methods to better understand the phenomenon being studied. This study therefore provides a linkage between theoretical knowledge and practice resulting in a better focused methodology for co-operative societies’ participation in the housing sector. It is hoped that this will provoke further academic and policy-driven research in the problem area.

The resulting action plan that this study proposes in realization of research objective five is a time-bound strategy that could be implemented immediately to propel housing construction activities by the co-operative sector and hence release thousands of housing units into the markets while also helping to integrate these societies as vibrant housing suppliers in the state.

The study is therefore significant in three respects: contribution to knowledge, contribution to policy development and contribution to organizational development.

Scope of the Study

In terms of scope in subject matter, this study is primarily focused on co-operative societies as potential housing suppliers for members. It is specific to the supply context. Demand-side variables of members such as income, housing preferences, and so on are analyzed only to the extent that they impact on supply decisions by the societies. This is because of the difficulty associated with the empirical identification of all factors affecting both the demand and supply of housing: some factors affect the demand side, while other factors affect the supply-side (Wong and Rickman, 2017).

It is also limited to the activities of co-operative societies in the first three steps of the housing supply value chain. These are land acquisition, housing finance and housing construction. The

higher levels of the value chain (housing finance through the primary and secondary capital markets) are not sufficiently matured in the mainstream housing market and are therefore not considered in this study. In addition, while it is known that there are several types of co-operative societies in operation in Lagos, to facilitate conciseness, these have been aggregated to two: employment based and non-employment based co-operatives.

Finally, in terms of geographical coverage, the study is limited to Lagos State. This is   on account of the dearth of literature on the co-operative and housing sector in the state and also on account of the depth of the housing need and the significant number of co-operatives that are registered in the state, when compared to other urban centres or states in the country.

Operational Definition of Terms

Co-operative Housing: Any form of intervention in housing supply by any type of co-operative societies, through direct construction for renting or sales, at market or subsidized rates, for the benefit of members and non-members alike.

Co-operative Societies: These are entities that are set up by a group of people to collectively address issues relating to their welfare that require substantial and collective resource mobilization.

Employment Based Co-operatives: Co-operatives whose membership is drawn exclusively from the staff base of a host organization; such as a company, government agency or other formal organization.

Housing Co-operative: A co-operative society specifically set up only for the purpose of addressing the housing needs of its members, and in some cases, non-members as well.

Housing Supply Value Chain: This term is used synonymously with housing supply process, housing development value chain and housing development process. It relates to the stages inherent in the process of housing supply: land acquisition, financing, infrastructure development, construction and accessing the capital market for sustained growth.

Housing Supply: This is the number of completed, decent housing units injected into the market by a housing provider, at any given point in time. It is used as a synonym to housing production. Governance variables: These are variables, such as member involvement that relate to the internal mechanism of leadership and followership in the co-operative society.

Market Constraints: These are constraints, such as production costs, that are external to the co- operative society; being dictated by the macro-economic conditions in which co-operative societies operate.

Non-employment based co-operatives: These are co-operatives that draw their membership base from trade groups or from the local community alone, but sometimes, in addition to the staff of a host organization.

Transaction Costs: These are non-direct costs of production, associated with administrative expenses, the acquisition and purchase of inputs, obtaining regulatory permits, information seeking, arranging contracts and all such other costs that nonetheless affects total housing supply costs.



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