With a whopping N16 trillion from Central Bank of Nigeria (CBN), the Pension Scheme, Mortgage institutions and other related financial services organisations, Nigeria’s housing sector is set to receive a boost.
This was as efforts are being made to allow pension contributors to access 25 per cent of the savings in their respective Retirement Savings Accounts(RSAs) for mortgage finance. In order to facilitate this, the National Pension Commission is currently discussing with the Central Bank of Nigeria (CBN), Mortgage Firms, and other relevant stakeholders, to fine tune a guideline that will regulate this initiative.
When finally released, it will facilitate access to home ownership by pension contributors as well as bridge the housing deficit in the country. The Section 89 (2) of the Pension Reform Act (PRA) 2014 already provides that a Pension Fund Administrator(PFA) may, subject to guidelines issued by PenCom, apply a percentage of pension fund assets in the retirement savings account towards payment of equity contribution for payment of residential mortgage by an RSA holder.
The Commission is currently working with CBN and other stakeholders in the mortgage sector to develop appropriate Guidelines. The guidelines are expected to be issued this year to allow Contributors to access and utilise part of their RSA balances towards equity contribution in respect of home ownership mortgages. If this is done, it will be a boost to the Real Estate market and equally contribute to socio-economic development of the country.
While commenting on the housing deficit in the country, the Chairman, Petra Real Estate Investment Club, Mr. Emmanuel A. Oyewole, said, the government is not doing much to address the housing deficits in the country as experts have put Nigeria’s housing deficits at 17 million units. Unfortunately, the figure has surged since as there have not been a corresponding increase in supply to the growing population.
While this provision is already in the guideline regulating the pension scheme in the country, the regulator is now working on implementation of this section by dialoguing with relevant stakeholders to make this a reality. When the initiative kickstarts, the intending beneficiaries are expected to make formal application to their respective PFAs, while such contributors are only allowed to access a maximum of 25 per cent of the RSA balance as equity contribution for a mortgage loan even though a contributor, can only access this mortgage finance only once in a lifetime.
The Vice President, Yemi Osinbajo had earlier forecast that the housing deficit in the country has continued to rise. He noted that the injection of the money would go a long way couple with other policies aimed for the sector to reduce the deficits.“The situation is worst in the cities where demographic distribution averages 15 per cent for high income earners, 25 per cent for middle income earners and 60 per cent for the low income earners where as the available trend in the provision of housing units, by both public and private organisations are unfortunately 70 per cent, 20 per cent and 10 per cent in favour of high, middle and low income earners respectively,“ he stated.
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