The World Bank has provided Nigeria a $300 million loan to boost the financing needs of the nation’s housing sector.
Director of Other Financial Institutions Supervision of the CBN, Mrs. Tokunbo Martins, disclosed this at the workshop on Model Mortgage and Foreclosure Law organized for Attorneys General of the states, as well as federal and state legislators in Abuja.
She revealed that the loan (about N1.080 billion when converted at N360/$1) was given to Nigeria on a generous term with a re-payment period of 40 years. Martins said CBN was the Project Implementing Entity of the Nigerian Housing Finance Programme, NHFP, which had been working to deepen the primary and secondary markets for mortgages in the country.
According to her, the Nigeria Mortgage Refinance Company, NMRC, was created pursuant to the objectives of the NHFP.
She added that although the NMRC operates as a Public-Private Partnership (PPP) model, “the CBN is underwriting some of the risks that come with the programme. For instance, CBN is underwriting the foreign exchange risks.”
The theme of the workshop was, “Creating an Enabling Environment for the Growth of Housing and Mortgage Sector: The need for Land and Law reform.”
Earlier, the CBN Deputy Governor in charge of Corporate Services, Edward Adamu, noted that the sector had been facing major constraints, especially the Land Use Act of 1978.
He said: “Apart from the unintended constraints created by some of current laws such as the Land Use Act, 1978 and the multiple laws applicable to the creation and enforcement of housing mortgages, difficult legal processes, antiquated land administration infrastructure and policies, the significant costs and multi-layered processes involved in land titling and perfection of land related transactions, have left the housing and mortgage industry in an undesirable and untenable state.
“The fact remains that access to adequate housing is directly connected to the health, wealth and happiness of our citizens and impacts everything from our national security, to our family social wellbeing. Therefore, any nation that ignores this critical sector does so at its own peril.
“It is an indisputable fact that apart from providing shelter for our citizens, investment in the housing sector will boost our national savings as well as economic growth by creating jobs across the entire economic spectrum as well as imbuing small, micro and medium businesses with a collateral asset often required for accessing finance.”
Speaking with journalists on the sideline of the event, the Executive Director (ED) Policy, Strategy and Partnerships of the NMRC, Dr. Chii Akporji, said the programme was to provide greater access to houses for Nigerians by helping to raise long-term funds for the development of the sector.
She added that the company would work with state governments to incentivize land acquisition, property registration and foreclosure laws at the sub-national level.
She said: “The state governments need to attract investments in the sector to their states. It will increase their Internally Generated Revenue, IGR, so they will have more money and, of course, more jobs are created.
“There are certain steps that these state governments need to take in order to create that environment, essentially looking at the issue of land, titling, property registration , instituting a foreclosure mechanism. Those are the key things that state governments are expected to look at, with a view to reforming them, expediting the process .
“For example, the issue of governor’s consent is very important. That is what you need to get access to land and to home ownership. “Initially, what we see is that this can take many years. You see the files pile up for governors’ consent. What this new initiative proposes is that either the governor makes it a priority or delegates that responsibility to a commissioner.’’