Labour has urged the Federal Government and state governments to channel the financial gains from the removal of the petrol subsidy into affordable housing, arguing that mass investment in homes could help ease the cost-of-living pressures facing Nigerians and narrow the country’s housing shortage.

The Chair of the Lagos State Council of the Nigeria Labour Congress, Agnes Sessi, argued that the government should make affordable housing a central component of its response to the economic pressures created by the subsidy reform, with one-bedroom and two-bedroom homes offered through rent-to-own arrangements for middle and low-income Nigerians.

“Let them go to each of the states and make a project or proposal to each of the governors that every year, make sure that you have like 50,000 homes or 100,000 homes. It’s something that can be achievable,” Sessi told The PUNCH.

Her proposal comes as the Federal Government’s latest housing data puts Nigeria’s housing deficit at 14.925m units in 2025, although broader estimates that include structurally inadequate and substandard homes have put the effective shortage at close to 28m units. The official figure was produced by the National Housing Data Technical Committee and presented in January, with the committee arguing that the new methodology provides a more reliable measure of the country’s housing needs.

Sessi urged the government to draw on the fiscal space created by the removal of the petrol subsidy to fund housing and other infrastructure that could lower the cost of living, arguing that public investment should extend beyond high-end developments to homes accessible to ordinary Nigerians.

She cited the housing scheme introduced by former Lagos Governor Lateef Jakande as an example of effective government-led affordable housing, stressing that the focus should be on homes for low- and middle-income earners rather than duplexes and terrace houses.

“Let them also make provision for middle cadre and low-income earners,” she said, adding that the government could develop areas currently regarded as forests and affected by insecurity into housing projects.

Jakande’s administration, which led Lagos between 1979 and 1983, was renowned for its large-scale low-cost housing initiative, with historical records estimating that more than 30,000 housing units were built during the period. Studies of the programme further show that most of the homes were designed specifically for low-income residents.

The scale of Sessi’s proposal is significant against the current supply gap. Building 100,000 homes a year would amount to about 1m units over a decade before accounting for population growth and the deterioration of existing housing stock, meaning that even such a programme would need to be accompanied by private-sector construction, mortgage finance and improvements in land administration to materially narrow the deficit.

The call also raises fresh questions about how the government has utilised the fiscal resources generated by President Bola Tinubu’s removal of the petrol subsidy at his inauguration on 29 May 2023.

Tinubu declared that “the subsidy is gone” in his inaugural address, ending a policy that had imposed a heavy burden on public finances while keeping petrol prices artificially low.

According to Finance Minister Taiwo Oyedele, the removal of the subsidy mobilised N15.8tn in resources for the Federation between June 2023 and December 2025. The Federal Government’s share amounted to N5.4tn, while N10.4tn was distributed to state and local governments through the Federation Account. The government has stressed that the N15.8tn was not held in a separate account labelled ‘subsidy savings’ but reflected additional resources available to the federation as a result of ending the subsidy.

That distinction matters to Sessi’s proposal because the resources are not a dedicated housing fund that can simply be reassigned but rather additional fiscal resources distributed among the three tiers of government. Her argument is therefore for the government to prioritise housing when deciding how those resources are converted into public investment.

Beyond housing, Sessi called for greater investment in electricity, roads, rail and affordable public transport, arguing that infrastructure should be developed as an interconnected system capable of reducing the cost of living and improving economic productivity.

She also advocated a return to agricultural settlements, where farmers could be provided with housing and supporting infrastructure, arguing that the government should make farming more attractive to younger Nigerians while strengthening domestic food production.

The proposal comes as the government faces pressure to demonstrate that the fiscal gains from its reforms are translating into tangible improvements in living standards. The removal of the petrol subsidy and the accompanying foreign exchange reforms have improved public finances and attracted investor support. However, they have also contributed to a sharp rise in living costs, making affordable housing, transport and food security increasingly important measures of whether the reforms are improving household welfare.