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Affordable Housing

Why FMBN’s new affordable housing programme comes with a difference


If there is anything that inspires hope in the new national affordable housing delivery programme  which was launched recently by the Federal Mortgage Bank of Nigeria (FMBN) in collaboration with leading labour unions in the country, it is because the programme differs significantly from other housing programmes undertaken in the past by government or its agencies which almost always ended up as white elephant projects with grave implications to the national economy.

Nigerians have, in the past, seen so many housing programmes initiated by state and federal governments or/and their agencies which ended at conception level, mid-way into construction and, in some cases, at near-completion level, leaving behind a pile of wasted efforts and resources.

Among several others including the Shagari Low Cost Housing, Nigeria has had social housing projects which failed, in part, because they were executed without taking into cognizance the concerns and economic realities of the Nigerian worker and other potential buyers.

However, the recent launch of the National Affordable Housing Delivery Programme for Nigerian workers in six locations across the country by the Federal Mortgage Bank of Nigeria (FMBN) in partnership with leading labour unions in the country is coning with a difference.

There are many reasons to believe that this affordable social housing project will succeed and not go the way of abandoned national projects. Finance is a major drawback in housing delivery but the availability of funds for the new programme guarantees that the delivery is sure.

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FMBN is leveraging its pool of funds from the National Housing Fund (NHF) to finance the construction work and delivery of the project. Selection and mobilization of competent developers is also another guarantee and the apex mortgage bank has already mobilized reputable indigenous developers with the capacity to deliver to start construction work on the project.

Another basis for hope in this programme is the strategic involvement of state governments as critical stakeholders in its implementation. The selection of the pilot sites was done based on the responsiveness of state governors to the conditions of the FMBN for siting the project. This helped in the speedy acquisition of expansive pieces of land for the housing estates.

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It is expected that the support from state governors whose workers will benefit directly from the scheme will indeed help to ensure timely project completion and delivery to deserving workers.

The active involvement of the labour unions in the design of the program is a major plus for the project and equally gives hope that it will succeed. The participation of leaders of NLC, TUC and NECA in the development of the framework for delivering the project made it possible for them to make constructive inputs into the housing designs, selling prices and conditions for delivering the project. This has given them a strong sense of ownership of the project which is considered a critical factor for its success.

The housing programme, which is designed in collaboration with the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers’ Consultative Association (NECA) is a good addition to the efforts of FMBN as a strategic policy tool of the federal government to increase access to affordable housing by low- and medium-income earners in the country.

Under the pilot phase of the project, about 1,400 housing units comprising one-bedroom, two-bedroom, and three-bedroom units are planned for construction and delivery at 14 sites nationwide. 200 housing units are to be built in each of the six geopolitical zones with 100 units in two selected states while Abuja and Lagos are to be treated as special sites.

A defining feature of the programme is the fixing of the selling prices of the housing units within a range that workers can afford with their salaries. The prices are to range from N3.1 million to N8 million which marks a departure from the worrying trend of building houses that are far beyond the financial capacity of low- and medium-income earners.

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The rapid and simultaneous commencement of construction activities at various sites in five states including Nasarawa, Kogi, Abia, Enugu, and Akwa Ibom inspires hope for the speedy delivery of the projects within the 6-months timeframe as planned.

In Nassarawa State, for example, the state governor, Tanko Al Makura, provided 5 hectares of land for the project and at the groundbreaking event recently, the governor promised to commit an additional 10 hectares for the project. In Kogi State, the governor, Yahayah Bello, provided 37 hectares of land for the project on the outskirts of Lokoja. In addition to the land, most of the governors have also indicated strong willingness to provide access roads, electricity, and other associated amenities.

“The launch of the National Housing Delivery Programme is a momentous development because it marks the first time that FMBN and the labour unions have worked closely with experts and industry stakeholders to develop a realistic and acceptable framework for delivering affordable housing to Nigerian workers”, noted Ahmed Dangiwa, FMBN’s CEO, at the groundbreaking event in Nasarawa.

Dangiwa reasoned that the collaborative spirit which this programme has fostered gave room for labour leaders, who understand the realities and financial challenges that Nigerian workers face, to make constructive inputs to the housing designs, pricing range and other relevant conditions for delivering this project.

The stakeholder involvement and contributions to the project design makes the programm a fit-for-purpose tool that will deliver houses that workers can afford as part of the overall national efforts at redressing the huge housing deficit that experts now estimate to be over 22million housing units.

Dangiwa assured of a plan already in place to ensure that once the houses are built and delivered, the FMBN will provide mortgage loans through selected Primary Mortgage Banks (PMBs) to Nigerian workers that contribute to the NHF to enable them to purchase the houses and repay over a maximum period of 30 years.

Eligible workers whose loan requirements fall below N5 million will not be expected to make any equity contribution to access the facility while those requiring N5 million – N15 million will have to provide only 10 percent equity contribution instead of the old requirement regime of 20 percent and 30 percent.

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The housing delivery programme is especially significant because of its conceptual focus on delivering cost-effective, safe, decent, quality and affordable housing. The direct commissioning of the bill of quantities by the FMBN to suppress the profit motive and the strategic engagement of state governors for the provision of land at near-zero cost has helped greatly to substantially reduce the cost of the building and keep the selling prices within the reach of Nigerian workers. This combination of quality and affordability makes the program a fit-for-purpose model for social housing in Nigeria.

The programme demonstrates yet another important and impactful initiative that the FMBN is driving to add zest to Nigeria’s quest for social housing. This is which it has become necessary for the government and stakeholders continue to support the bank’s initiatives such as this and upscale it to reach even greater numbers.

“If the bank has shown that it can achieve this much with a capital base that is just about N5 billion, government needs to continue its professed support and quickly progress its commitment to the re-capitalization of the bank to the tune of N500 billion in the next five years  as planned.

With such additional funding,  it is hoped that FMBN will have more financial leverage to fund and upscale its projects and indeed rise up to the occasion and ignite a social housing revolution in the country. The current level of housing deficit demands immediate action by government and all stakeholders. Recapitalizing FMBN is a good way to start since it now represents the hope of the common man for decent, quality and affordable shelter.

Source: Chuka Uroko 

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