The Battle Against NHF

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A proposed amendment to the Federal Government Staff Housing Loans Board (FGSHLB) Act, before the House of Representatives, has set the stage for federal public servants to derive guaranteed benefits from their contributions to the National Housing Fund (NHF). An Abuja public analyst, Isaiah Abraham, writes that if the amendment scales through, the Federal Mortgage Bank of Nigeria’s (FMBN) in the Housing Fund scheme, would have been broken.

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Proposal before the House of representative committee seeking to transfer 50 percent of the contributions of Federal civil servants from the National Housing Fund (NHF), to the Federal Government Staff Housing Loans Board (FGSHLB), if passed into law, may change the fortunes of civil servants desirous of owning their own houses. The NHF Act, which became operation in 1993, compels workers to contribute two and half per cent of their salaries, deductible at source, to the fund. It also empowers the Federal Mortgage Bank of Nigeria (FMBN), the power to manage the funds contributed by workers.

However, there is a snag in the Act; the FMBN operates as a secondary mortgage institution, and as such does not deal with individual contributors, making access to the fund by contributors challenging.

Since 2000, the organised labour has been kicking against the continued contribution by workers to the NHF on the ground that there was no guaranteed benefit. Labour’s grouse against the scheme was that as at 2006, about 1.8 million workers were registered from 17,132 employers, under the NHF, with a contribution of about N6 billion, but according to labour, only less than N280 million has been disbursed to about 446 contributors as loans.

Labour further claimed that between 1993 and 2006, about N20 billion has been contributed by workers to the NHF without any widespread benefit, closing the doors against the Federal Government Staff Housing Board, which has been operating a social welfare scheme by providing houses for Federal Government workers since 1924, in the cold.

Under the proposed amendment of the Federal Government Staff Housing Loans Board Act, Section 8 of the Bill is proposing that 50 per cent of Federal Public Service contributions to the NHF should be channeled to the Loans Board to guarantee contributors’ access to the fund.

In his lead presentation at the a Public Hearing, conducted by the House of Representatives Committee on Public Service Matters, on March 27, 2018, Director, Legal Services, Office of the Head of Service of the Federation, Mr. Emmanuel Omonowa, proposed that “in view of the fact that contributions to the NHF is being done by Federal Public Employees, 50 per cent should be ordered in the Act to be amended to be paid to the loans Board”.

In justifying this position, Omonowa argued that upon a civil servant retirement, he is asked to bring a certificate from the Federal Government Staff Housing Loans Board to indicate that he is not indebted to the Board. “So, if these are the people contributing and they must come to the Board to obtain a certificate to show that they do not owe, why not put their contribution here? So that when they come for their certificate, if they have not obtained any loan, then you put their contributions together and give it to them.”

Instead, he said, what obtains is that deductions are made at source from public servants’ salaries and given to the primary mortgage institutions to build houses that civil servants cannot buy, adding that the contributor, who should be helped to put money together to own a House, cannot own a House and cannot get his contributions back. “This ought not to continue, so that we do not have our senior citizens, retiring with heart attack,”he said.

FGSHLB Executive Secretary, Mrs. Hannatu Adamu Fika, debunked claims that the FMBN has been funding the activities of the Board. She maintained that the only partnership that exists between the board and the FMBN was initiated to douse tension among workers.

“Recently, in other to douse the tension among contributors to the NHF from the public service, we were able to broker renovation loans of N1 million. For the past two years, FMBN has been giving us N1.5 billion; this amount cannot fund the Federal Government Staff Housing Loans Board. Our funds come from the government and even the N1.5 billion that they have been giving us, there have been schools of thought that we are not a PMI (Primary Mortgage Institution), and it should be discontinued. So, the issue of they (Federal Mortgage Bank) funding us is not completely true,” Fika said.

But at the committee hearing, a representative of the FMBN revealed that the NHF Act, which empowers the mortgage bank to manage the affairs of the fund, is opened to all contributors to the Fund, insisting that Civil Servants and then the Public sectors have been benefitting from it. The representative further explained that although the Act provided for the monies collected (through NHF), to be channeled through Primary Mortgage Institutions (PMIs), for lending to contributors, the bank has been seeking to amend its our own Act and then the NHF Act, to meet the realities of the present time.

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He added that in an effort to ensure that civil servants that cannot afford the equity contributions for mortgage are catered for, the Bank came up with the product, “Home Renovation Loan,” so that most of them, who cannot go through the NHF, to access funding for building or to buy a House outright, can at least, renovate their existing homes. The same goes for the Federal Integrated Staff Housing (FISH) product too, which is targeted at ensuring that houses are delivered to civil servants all over the Federation.

But labour disagreed. Speaking through one of its representatives on the Board of the Federal Government Staff Housing Loans Board, Mr. Ejiofor, the group said: “The NHF, who contributes to it? As at today, largely, it is Federal Employees who contribute. As a result, you use the funds of Federal Employees to fund Mortgage owners or Mortgage system, in which the workers, themselves, cannot pay the terms. That is the critical issue. State governments, most of them, are not in that scheme and we are saying that Federal Public Employees, who are the main contributors, as of today, must benefit more. Does the NHF give annual returns?”

Continuing, he lamented that workers and contributors to the NHF would retire or die, and their contributions to the fund is not refunded on time. For him, the Federal Government Staff Housing Loans Board exist wholly for federal public employees, and as a result the bulk of their contribution should go there. That is equity. “But to take the contributions of poor workers and fund mortgage institutions, who in most cases, provide Housing Schemes for the rich is an aberration,” Ejiofor maintained.

Similarly, a representative of Senior Civil Servants Association of Nigeria, Mr. Apebo Joshua, told the House committee the contribution of public servants should be transferred to the Federal Government Staff Housing Loans Board. This, he argued, is because his colleagues do not benefit from their contributions to the NHF being managed by the Federal Mortgage Bank of Nigeria.

“Even if the FMBN gives private developers money to build houses, they would build houses that are not affordable by civil servants. The contributions to NHF should be channeled to the Federal Government Staff Housing Loans Board, so that we can be able to access loans,” he said. However, between the old order and the proposed new order, in the administration of the National Housing Fund, it is fingers crossed, as the Bill continues its legislative journey.

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