For not meeting their housing needs, Federal Government employees are mounting pressure to break the monopoly of National Housing Fund (NHF) on workers’ contributions. To show their seriousness, they are currently seeking withdrawal of their contributions from the NHF to Federal Government Staff Housing Loans Board (FGSHLB) for easy access to their money.
Their demand is contained in the proposed Amendment to the Federal Government Staff Housing Loans Board (FGSHLB) Act currently before the House of Representatives. The proposed amendment is hinged on the need for federal public servants to derive guaranteed benefits from their contributions to NHF. Under the proposed amendment, Section 8 of the new Act is proposing that 50 per cent of Federal Public Service contributions to the NHF be channeled to the FGSHLB to guarantee contributors’ access to the fund.
Justifying this in his lead presentation to House of Representative Committee on Public Service Matters in Abuja, Director, Legal Services, Office of the Head of Service of the Federation, Mr. Emmanuel Omonowa, stated that many workers, who were contributors to the NHF, who should be helped to put money together to own their own houses, were denied access during and after retirement. According to him, what has been on ground is that money would be deducted from work ers’ salary at source and given to primary mortgage institutions (PMIs) to build houses that civil servants cannot buy due to high cost, adding that this has been responsible for rising nation’s housing deficit. In view of the fact that contribution to the NHF is being done by federal public employees, the director of legal services proposed that “50 per cent should be ordered in the Act, to be amended, to be paid to the loans board.”
He said: “Number one, for anybody to retire from the public service today, they request that you must bring a certificate from the Federal Government Staff Housing Loans Board that you do not owe. These are the people contributing to NHF and they must come to the board to obtain a certificate to show that they do not owe. “So why not put their contributions here (FGSHLB), so that when they come for their certificate, if they have not obtained any loan, then you put their contributions together and give to them.”
The NHF Act compels workers to contribute two and half per cent of their salaries to the fund and the law empowers employers to deduct the contributions at source. Although the law covers workers in both the public and private sectors, only federal public servants have been contributing to the fund since the law took off in 1993. The existing law setting up the NHF gives the Federal Mortgage Bank of Nigeria (FMBN) the power to manage the funds being contributed by workers.
The argument, however, is that FMBN operates as a secondary mortgage institution that does not deal with individual contributors. This was identified as a problem in accessing to the NHF by contributors. Representative of Senior Civil Servants Association of Nigeria, Mr. Apebo Joshua, maintained that contributions of public servants to the NHF should be transferred to the Federal Government Staff Housing Loans Board.
He said: “This is because we do not benefit from our contributions to the National Housing Funds, being managed by the Federal Mortgage Bank of Nigeria.” According to him, even if FMBN gave money to private developers to build houses, many houses built by developers won’t be affordable to civil servants with the current N18, 000 minimum wage. He said: “If a developer charges N4million for a house, a civil servant who desires to own such a house would be required to pay 10 per cent of the sum, amounting to N400,000. How much is minimum wage? Minimum wage is N18,000, in 12 months will give you N216,000.
“The sum of N216,000 is not up to the 10 per cent being demanded by the developer. So how can somebody acquire that type of house?” But a representative of FMBN, who did not want his name in print, told the House Committee that the NHF Act, which empowered FMBN to manage the fund, was opened to all contributors to the fund. He added that civil servants and members of the public sectors have been benefitting from it.
The FMBN representative further explained: “We reckon that the Act provided for the monies collected (through NHF), to be channeled through Primary Mortgage Institutions (PMIs), for on lending to contributors, and we have our problems there. We have been seeking to amend our own Act and then the NHF Act, to meet the realities of the time.” In an effort to ensure that civil servants that cannot afford equity contributions to own a house have access to fund, the FMBN representative said the bank floated Home Renovation Loan to enable them access to funding to renovate existing homes.