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Stakeholders to FG: Compel CBN, banks to fund NHF

Housing stakeholders have tasked the Federal Government on policy that will compel the Central Bank of Nigeria (CBN), banks, insurance firms and others to provide funds for the National Housing Fund (NHF) as stipulated by its Act.

This is coming barely a week the House of Representatives Committee on Housing led by its chairman, Mr. Ahmed Baba-Kaita, fingered the failure of Central Bank of Nigeria (CBN), commercial banks and insurance firms to perform their duties as a major shortcoming to NHF inefficiency.

The committee also investigated the non-compliance with the National Housing Fund (NHF) Act and the inability of government to deliver housing to the citizenry.

Speaking with New Telegraph in Lagos, former President, Nigerian Institute of Building (NIOB), Mr. Chucks Omeife, urged the Federal Government to push policy that will compel CBN, banks and commercial banks to make their contributions to NHF.

He said the case has become complicated when the Federal Government that was expected to show interest in the buoyancy of NHF was found wanting, saying this was the main reason the scheme has not been working.

“Government must push policy that will compel stakeholders to contribute certain percentage of their profits to NHF,” he said.

Also, Principal Partner, Kola Akomolede and Co., Chief Kola Akomolede, tasked government on the need for banks and insurance firms to remit their contributions to the NHF scheme.

Decree 3 of 1992 (now an Act), which established NHF, a pool of long-term funds aimed at overcoming the dearth of long-tenured capital, granted FMBN the responsibility to collect, manage and administer NHF.

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The Act identifies cheap, sizable and ‘patient’ resources to fund the scheme. These are contributions of 2.5 per cent of the monthly income of all Nigerian workers earning the sum of N3,000 per annum and above.

According to the Act, 10 per cent of the loan portfolio of commercial banks in Nigeria, should be mandatorily invested in the NHF, while 40 per cent of life funds and 20 per cent of non-life funds of insurance companies registered under the Insurance Act, to be mandatorily invested in real property, with no less than 50 per cent invested directly into NHF.

Also, this includes financial contributions of the Federal Government.To this end, the House of Representatives Committee on Housing recommended that such contributors should be compelled to provide funds for NHF as provided in the Act.

Besides, the committee also canvassed that the Federal Government should recapitalise the Federal Mortgage Bank of Nigeria (FMBN) to the tune of N500 billion.

This, the committee said, has become necessary to make the bank more vibrant and responsive to its functions for effective housing delivery in the country.

The recommendation to recapitalise the bank was contained in the report of the House Committee on Housing, which lawmakers considered and approved.

The committee also recommended that FMBN be given necessary government support in areas like guarantee, recapitalisation and allocations to empower the bank for maximum productivity.
These steps, the House Committee said, should be taken to review the provisions of the NHF Act to make it more enforceable.

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Opposing the creation of another agency, it said: “Existing Federal Government institutions should be supported rather than creating new ones to avoid duplication of functions.”

Chairman, HOB Estates Limited, Chief Olusegun Bamgbade, said the inability of banks to give long-term loans for real estate was one of the major reasons the economy has not really picked up.

He pointed out that the only organisation mostly responsible for real estate development has been FMBN, lamenting that it was unfortunately that the bank had not been effective in this area, especially on Developers’ National Housing Fund (NHF) settlements.

Bamgbade attributed delay, unnecessary charges and high interests on loans as major obstacles to the bank’s performance.

He said: “FMBN would rather keep you as a perpetual EDL client than taking pragmatic steps towards inter-account settlements, thereby charging unnecessary and obnoxious interests on an account that ought to have been cleared many years back.

“FMBN is always in the habit of scheming and blaming the developer for its ineptitudes.”

To really grow real estate development in Nigeria in practical terms, Bamgbade said the mind-set of frustrating genuine real estate developers must be addressed by FMBN.

Until this happens, “there can’t be any serious growth in real estate sector,” he said.

Dayo Ayeyemi

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