Reporter

RECOMMENDATIONS FOR IMPROVING ACCESS TO HOUSING FINANCE IN NIGERIA

 

Housing Microfinance is an interesting innovation appropriate for the Nigerian market. It functions by providing small, short-term loans to match step-by-step housing construction that the lower-income segment can afford. Technical support ensures that people get the best possible housing for their investments.

With a population of over 70 million low-income people and an almost non-existent mortgage market, the opportunity for a housing microfinance business model is evident. Nigeria’s housing finance sector depends on the active participation of both the public and private sectors.

The following recommendations are broken down into issues affecting
(a) Policy and Regulation
(b) Financial Sector
(c) Capacity Building and Knowledge Gap
(d) Housing Sector

POLICY AND REGULATION
Challenges
• Difficulty in procuring consents for transfers, title deeds and very high processing costs.

Recommendations
• State governments should make administrative amendments to the Land Use Act to delegate endorsement of consent to Commissioners. At the national level, a Director of lands should do this
• Simplification of land title registration and revision of procedures and cost structure. Revised fee schedule should be capped at 0.5%. Subsequent land transactions should NOT require Governor’s Consent but mere registration of title
• Policies and programmes should be aimed at the low income segment focusing on assisting them to acquire, build or improve their homes through easy accessibility to land and securing of title documents

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FINANCIAL SECTOR
Challenges
• Lack of access to funds by potential homeowners and PMIs. There also exists absence of synergies for generating construction and mortgage finance
• Low funding base and poor corporate governance of PMIs
• Absence of secondary market
• FMBN’s poor capital base
• High down payment percentages
• Sectoral illiquidity issues
• Inadequate investments by pension funds

Recommendation
• Housing microfinance for the low-income population is critical and resources should be committed to researching and understanding this emerging sector. There should also be concerted technical assistance programs and housing support services to be administered by the government
• The CBN should direct PMIs to recapitalize to position them to finance big ticket transactions and to provide long term funding to developers and end users. The CBN should also encourage Mergers and Acquisitions among PMIs.
• Institutionalize a code of corporate governance in the management of PMIs
• CBN should issue a 20-25 year bond in collaboration with the Debt Management Office and use the proceeds to refinance eligible mortgages
• FMBN should be given adequate resources by the government to strengthen its financial and operational capabilities
• Government should provide a form of security to financiers/home buyers, for example securing a percentage of the total amount in case of default through a mortgage insurance scheme. This security should be targeted and removed after a certain period so that the mortgage insurance scheme can operate independent of government. This would help to reduce current down payment percentages required from home buyers.
• Development of liquidity facilities framework for refinancing qualified mortgage assets of Deposit Money Banks and PMIs to fund affordable housing
• Review existing provisions and allocation framework to allow for more participation of Pension funds in long term finance for housing

CAPACITY BUILDING AND KNOWLEDGE
Challenges
• Absence of data
• Lack of trained and skilled housing finance personnel

Recommendations
• The CBN, FMBN, Housing Finance Professionals Association of Nigeria (HoFPAN), CIBN and Mortgage Bankers Association of Nigeria (MBAN) should collaborate to institutionalize training leading to the certification of professionals in the mortgage and housing finance sectors. The National Universities Commission (NUC) should be encouraged to offer courses on housing finance at Universities
• A Real Estate Information Centre that will warehouse data and information on the real estate and housing market should be established. The centre will be the repository of market information on key data in the housing sector
• Capacity development and training for real estate professionals should be done through local and international training programs, seminars, workshops and study visits

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HOUSING SECTOR
Challenges
• Infrastructure challenges
• Affordability and cost issues

Recommendations
• The Federal Government should set up a Housing Infrastructural Development Trust Fund to provide incentives to participating State Governments to induce provision of housing related infrastructure in their states.
• Basic building materials should be given tax and duty relief and government should develop incentives to encourage both the public and private sectors to use indigenous building materials
• State and federal governments should engage housing finance experts to develop viable framework for public private partnership for housing and infrastructure
• Government, developers and financiers should work together and come up with strategies that can make housing affordable especially to the low income segment. Strategies may include granting tax holidays to developers and providing free land to them to reduce the cost of producing houses

KEY CHALLENGES OF ACCESSING HOUSING FINANCE IN NIGERIA

 

The Nigerian housing sector has an affordability challenge. Housing delivery is targeted mainly at the middle high income segment of the population that can either pay cash or access mortgage finance from the banks.

The sheer size of the low income population, however, suggests a crucial growth opportunity for developers and financiers if they are sufficiently innovative. The affordability parameters inherent in the mortgage instrument limit access by the low income population.

These parameters include 20% – 30% equity contribution, maximum tenures of only 10 –15 years, high interest rate of 22%, etc. Opportunities to address this market are limited by expensive building materials and the lack of local capacity to produce the supply chain components like doors, door knobs, windows, etc. The non – availability of long term funding for housing development also compels builders of residential accommodation to recover their capital within the shortest possible time. It is in this area that the development of non-mortgage housing finance products, such as housing microfinance, could be very usefully explored. Some of the other challenges to the development of the Nigerian housing market include:

MACRO-ECONOMIC CHALLENGES

Inflation: Inflation in Nigeria is still in double digits. Investors, lenders and borrowers prefer a stable economy where decisions can be taken without trepidation. Apart from inflation, other macroeconomic indices should be kept stable and must continue to improve if the mortgage market is to thrive and become vibrant.

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POLICY AND REGULATORY CHALLENGES

Land Use Act:  The Land Use Act of 1978 has become an obstacle to making land available for housing. The Act has been blamed for the prolonged bureaucratic process of obtaining the Certificate of Occupancy, the document that confers ownership of the land to the individual from the government. Furthermore, the Act has not guaranteed security of title and cost remains prohibitive while access to titled and registered land is difficult and cumbersome.

Taxes, Stamp Duties and Fees: The tax burden on housing development in Nigeria is enormous. Value Added Tax (VAT), which is collectible at various levels of the building process, adds as much as 30% to the total cost of a house. This is exclusive of titling fees and stamp duties. This ultimately puts the sales price of the unit beyond the reach of low income earners.

Property Registration: Registering property is generally slow and expensive. However, there has been some improvement since 2008 when the World Bank’s Doing Business 2008 report recorded that reforms had led to a reduction in the time required to complete the process from 274 to 80 days. In the 2010 World Bank Doing Business sub-national report, the number of days for processing the governor’s consent was estimated to be 52 days. However, it takes only 1 day for the same registration to be done in Singapore.

FINANCIAL SECTOR CHALLENGES

Insufficient Capital Base: The inadequate capital base of most primary lenders limits their ability to provide needed finance to meet market demand.

Funding Challenges: Funding is a major challenge in the Nigerian housing market. The market is characterized by high interest rates, which are a reflection of the source of funds which is predominantly short tenured (30 days, 60 days and 90 days) Mortgage finance where present is structured as variable rate mortgages. Funding challenges lead to affordability issues. Thus, there is a gap between the cost of houses and the income of end users.

Unavailability of Secondary Market: There is no efficient secondary mortgage market linked to capital markets and institutional investors. This puts enormous burden on PMIs or housing finance institutions to carry the mortgage loans to maturity. Currently, outstanding mortgage loans remain on the books of the PMIs no matter the tenure. This limits the ability of the PMI to originate more loans.

Lack of Credit Enhancement Vehicles: To extend mortgages to low-income levels, there needs to be some credit enhancement like mortgage insurance to guarantee credit risks up to certain loss levels for loans with high loan to value ratios. This may also extend affordability to the low income population as lenders will require smaller deposits if the loan is guaranteed.

Skilled Manpower: There is limited capacity for the requisite skills required in the mortgage market in Nigeria. This is explained by the fact that the market has not being in existence for a long time.

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HOUSING SECTOR CHALLENGES

High cost of building materials: Nigeria imports about 60% of the building materials required for housing development. This is a key factor for the high cost of houses.

Infrastructure: Infrastructure accounts for about 25 to 30 percent of housing costs. It is a major determinant in the delivery of affordable housing. Government has neglected this area and developers now provide same, thus increasing the cost of houses. This is evident in many gated residential estates across the country, where the developer provides independent/alternative electricity, water treatment plant, sewage plants, access roads to the estate, etc.

 

…to be continued

Trump Tweet on South African Land Reform Draws Government’s Fury

 

South Africa’s government on Thursday criticized a tweet by President Donald Trump in which he said he asked Secretary of State Mike Pompeo to study efforts to overhaul land ownership and “large scale killing of farmers” in Africa’s most-developed economy.

Mr. Trump’s overnight tweet referenced a report by Fox News host Tucker Carlson attacking the U.S. government’s stance on land reform in South Africa, which he suggested was too lax.

South Africa’s rand fell against the dollar after the tweet, and was 1.3% lower in Thursday morning trade.

The ruling African National Congress has said it plans to change the constitution to explicitly allow the expropriation of land without compensation in an effort to overcome deep inequalities in land ownership the country, which shed white-minority rule in 1994. White South Africans, who make up around 8% of the country’s population, still own 73% of agricultural land, according to estimates from farmers association Agri SA.

“South Africa totally rejects this narrow perception which only seeks to divide our nation and reminds us of our colonial past,” the government said in a message from its official Twitter account Thursday morning. “South Africa will speed up the pace of land reform in a careful and inclusive manner that does not divide our nation.”

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President Cyril Ramaphosa and other ANC officials have said any expropriations would be handled with care to avoid eroding property rights, food security and agricultural production.

Under South African law, land owners would also have the right to challenge any government action to take away land without compensation in court.

So far, agrarian reform has been led by voluntary sales by white farmers and other property owners to the government at market prices under a policy known as “willing seller, willing buyer.”

Mr. Ramaphosa’s spokeswoman didn’t immediately respond to a request for comment on Mr. Trump’s tweet. But state broadcaster SABC news reported that the government would ask the U.S. Embassy in Pretoria for clarification on the tweet.

The U.S. has had a warm relationship with South Africa, which embraced liberal democracy and free-market policies after the end of apartheid. Last month, former President Barack Obama was the keynote speaker at celebrations of what would have been the 100th birthday of the late Nelson Mandela. But the government in Pretoria has complained about U.S. tariffs on South African steel and aluminum introduced as part of Mr. Trump’s efforts to revive manufacturing at home.

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In a question-and-answer session in Parliament on Wednesday, Mr. Ramaphosa criticized South African interest groups who he said “are going around spreading lies and rumors.”

“Running overseas and saying the ANC is out for land grabs. There is no such thing,” he told lawmakers. “The ANC wants to ensure that there is land reform that is going to lead to the growth of our economy and agricultural growth and if we embrace this approach we are going to restore the dignity of our people.”

Violent attacks on white South African farmers have grabbed headlines in local and foreign media in recent years, prompting protests from farmers and white Afrikaner interest groups. A study released in June by Agri citing police crime statistics said that the number killed on farms has declined over the past 20 years, and reached a low of 47 people killed in 2017/18.

The number of attacks on farms — including crimes such as rape, robbery and causing bodily harm — has increased over the past two years, counting 561 attacks in 2017/18, but is still far off a 2001/02 high of 1,069 attacks.

Gabriele Steinhauser

Water crisis-world Leaders meet in Sweden

World leaders, water, development experts, among other stakeholders are converging on Stockholm, Sweden, to find new, nature-based solutions to meet escalating global water crisis.

In a statement by Jens Berggren, Communications Director, Stockholm International Water Institute (SIWI) the event would be a wake-up call on the challenges that climate change, economic and population growth, and increasingly unpredictable weather and water patterns impose on global water security.

The 2018 World Water Week will be held from August 26 to 31, under the theme: `Water, Ecosystems and Human Development’, an issue of particular relevance given the past year’s many extreme weather events.

Mr Berggren stated that the event would be a wake-up call on the challenges that climate change, economic and population growth, and increasingly unpredictable weather and water patterns impose on global water security.

“The UN expects that by 2025, 1.8 billion people will suffer from water scarcity, recent weather-related events also underline the critical role ecosystems play for human well-being and existence.

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“Nature-based solutions as effective tools for human development will also be a focus of this year’s theme,’’ she said.

She added that no fewer than 3,300 participants from more than 130 countries will be attending the World Water Week, representing governments, private sector, multilateral organisations, civil society and academia.

Speakers at the opening session on August 27 include Amina Mohammed, Deputy Secretary-General United Nations, and the 2018 Stockholm Water Prize Laureates Professors, Mark van Loosdrecht and Bruce Rittmann.

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According to Berggren, group influences decision-makers, facilitates dialogue and builds knowledge in water issues, thereby contributing to a just, prosperous and sustainable future for all.

The World Water Week brings together more than 3,500 participants from more than 130 countries representing governments, private sector, multilateral organizations, civil society and academia to shape joint solutions to global water challenges.

(NAN)

Building housing on flood plains another sign of growing inequality

 

Many cities around the world face a lack of affordable housing in and around expensive central business districts. Employers want cheaper labourers, who need more affordable housing in accordance with their lower salaries, to live nearby. So developers are invited to build on flood plains, without consequences. And often there is no public involvement in the decision.

Flood plains are easy to build on because they are flat and, in cities, they tend to be close to amenities. Yet all parties involved in housing know that cities are facing more rainfall and flooding due to climate change. Cities are now starting to prepare for catastrophic floods. and research has estimated flooding losses in the United States to be increasing dramatically.

Irresponsible and autocratic choices made by elites, at Waterfront Toronto for example, leave unsuspecting, lower-paid professionals in dangerous circumstances with rising insurance costs and potentially bad investments. That’s because, in the future, flood insurance may become prohibitively expensive or insurers may decide not to cover such high-risk properties, making them difficult to sell.

FLOOD RISKS WORLDWIDE
Difficult housing choices are reflective of a broader loss of worker power and associated income inequality. Research shows that densely populated areas are more vulnerable to disasters — the same disaster affects more people in dense environments. And where there is income inequality, there are more victims of natural catastrophes.

Cities dominated by appointed, un-elected officials, such as the board members of Waterfront Toronto, are helping to generate this inequality.

In the U.K., where there’s an ongoing housing crisis, government has approved building on flood plains as long as the new homeowners are made aware of the risks in advance. At least the British are having an honest conversation about it. In Toronto, we are not.

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New Orleans has long relegated its poorer populations to lower elevations by the Mississippi River, where floods and subsequent disease have devastated the city. The terrible treatment of Hurricane Katrina’s victims in New Orleans is a continuation of an enduring history of racism.

Research also describes how in the flood plains of Bangladesh, income inequality is related to a higher risk of flooding and lower preparedness to deal with floods.

In South China, increasing rainfall has left millions of the poor living in such dangerous low-lying areas that China’s president has called in the army.

PUBLIC SPACE CAN BE CLIMATE ADAPTIVE
Today, most North American coastal cities are in danger of climate-related sea level elevations and storm surges. Hurricane Sandy caught New York’s elite off guard because they became victims too. It didn’t matter whether you were in the Upper East Side or in Harlem.

In wealthy south Florida, saltwater rises not only directly from the sea, but also up through porous limestone, so Miami cannot use the same climate adaptation approaches as in some other cities, like adding green space. Miami is working to add pumps and other infrastructure instead.

Toronto could turn its remaining waterfront space into parkland, instead of housing developments, as a protective barrier.

New York City is going to build a wall around the lower part of Manhattan, and add a park. The Dutch are using public space to absorb floodwater. New Orleans is building parks to double as reservoirs for floodwaters, on the advice of the Dutch.

TORONTO’S RECENT FLOODS A WAKEUP CALL
Toronto has had a few waterfront floods over the years, including this year and last, damaging the Toronto Islands in 2017. The city faced several storms in 2018 with violent winds and flooding downtown. Some wealthy Torontonians leave the city for private lakefront properties in cottage country, but others live within limited space affected by the aftermath of catastrophes. The Toronto Islands recovery, for example, is still ongoing and has not yet been fully paid for.

Meanwhile, new Toronto lakefront condominium developments are proceeding in the Quayside and Portlands neighbourhoods, near the Islands, on flood plains historically contaminated by heavy metals, oil and coal. “Workforce housing” is a required part of the plan.

Will Flessig, former Waterfront Toronto CEO, says that middle-income professionals are expected to settle in the waterfront condominiums so that they can be closer to where they work.

But no one in Toronto is talking about the flood plains, since elected officials apparently consider the issue resolved. Based on a plan developed in 2007, the federal and provincial governments are investing $1.185 billion to reconstruct the mouth of the Don River so that the water safely flows into Lake Ontario.

However, the waterfront area still remains a flood plain, and is still affected by storm surges associated with climate change.

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Building on flood plains has serious consequences, including future uninsurable buildings as insurance companies anticipate they won’t be able to afford the payouts. A single major flood causes a great deal of damage and requires insurance companies to pay all at once. With a higher frequency of catastrophic floods and the corresponding required payouts, the pool of insurance premiums collected to cover the losses dries up, and insurance companies face bankruptcy.

Before that happens and buildings are left derelict, people and property are endangered. We recently saw life-threatening flooding of buildings in Toronto, and there are limited rescue personnel to address all of the issues at the same time when mass floods happen.

Simultaneously, damage to personal property can be overwhelming — for example, to cars and contents within condominium lockers in underground parking garages. In Toronto, we have also seen streetcars submerged in water recently with people trapped inside.

Fixing the damage therefore adds costs to public transit. Water quality and disease concerns are also heightened as storm sewage systems cannot handle increasing rainfall volumes. Over the longer term, repeated flooding also weakens building foundations.

HARD TO MANAGE WATER LEVELS
On a broader scale in the Great Lakes region, the ability to adapt to changing conditions is reduced. That’s because the ability of water officials to manage water levels is much more difficult when condominiums and other housing is built on flood plains.

For example, water flows are somewhat controlled in the Lake Ontario and St. Lawrence River watersheds through an international agreement called Plan 2014. If buildings are in the path of water flow, this complicates and limits the range of adjustment options.

We know now what we’re confronting. Let’s learn from past mistakes. In the best interests of homeowners, the public and climate adaptation, what’s left of Toronto’s waterfront should be public parks, not condominiums billed as “workforce housing.”

Deborah de Lange

FG, FISH to inaugurate over 150 Houses In October

 

The Federal Government Staff Housing Loans Board (FGSHLB) is set to inaugurate over 150 houses in Kuje Area Council, Federal Capital Territory (FCT).

The executive secretary of the board, Dr Hannatu Fika, made this known while speaking to Journalists at the sideline of the governing board meeting , at the Federal Secretariat in Abuja.

Fika said that the inauguration would be part of events to commemorate the October 1 Independence Day, adding that the houses would be in conjunction to the Federal Integrated Staff Housing (FISH) programme.

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“We will be commissioning two housing estates in Kuje, which comprise of 66 and 100 houses each, the estates have been built and few finishing touches are being put in place. We are also looking at developing our plot of land, which was allocated to the board by the Federal Capital Territory Administration (FCTA), to enable us construct affordable houses for public servants. A lot of public servants have indicated their interest to own houses. A giant part of the houses to be constructed will be part of the FISH programme, where we give houses in lieu of the cash loan,’’ she said.

Commenting on the N1 billion renovation loans, Fika said, public servants in the North East, Benue and Plateau States whose houses were affected by the insurgency were being prioritised. She added that the Federal Mortgage Bank of Nigeria (FMBN) had approved the list of the affected public servants and would release N1billion to the board for this purpose.

Bidon Mibzar

FG Appoints Adewole MD Family Homes Fund

The federal government has appointed Mr. Femi Adewole, as the Managing Director of Family Homes Fund, a statement by director of information in the federal ministry of finance, Hassan Dodo said. Adewole’s appointment followed a competitive and rigorous recruitment process conducted by PricewaterhouseCoopers, a renowned multinational professional services organisation.

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Femi Adewole is a real estate and housing professional with over 25 years’ experience leading housing initiatives across Sub Saharan Africa and the United Kingdom. Until his appointment, he was managing director of Shelter Afrique, the Nairobi- based pan-African housing finance company. Family Homes Fund, an initiative of the federal government, is aimed at facilitating affordable housing delivery by entering into specific partnerships with supportive state governments, developers and international partners/agencies that can provide technical support and financing for project implementation.

Mark Itsibor

How Weak Mortgage System Promotes Homelessness

According to the Bureau of Public Service Reform (BPSR), over 108 million Nigerians are homeless out of the over 180 million population.

This represents over 50 percent of the population who either live in shanties, sleep under the bridges, motor parks or other unpleasant places in search of greener pastures. With over 80 per cent of the workforce within the low income cadre, the 100, 000 housing units proposed annually by the federal government cannot address the homeless state of Nigerians. At a time Nigeria is battling to contend with over 17 million housing deficit, the weak mortgage system that is prevalent among the Primary Mortgage Banks (PMBs) might ruin the struggle.

Findings reveal that Federal Mortgage Bank of Nigeria (FMBN) being the secondary mortgage institution in the country, provide loans to accredited PMB’s at four per cent interest rate for on-lending at six per cent rate to National Housing Fund (NHF) contributors over a maximum tenor of 30 years. The NHF which is managed by FMBN is a social savings scheme designed to mobilise long-term funds from workers, banks, insurance companies and the federal government to advance concessionary loans to contributors.

However, the PMB’s lending rate to both NHF contributors and estate developers are usually higher and in most cases rising to double digit interest rate of 28 percent, thereby widening the doors for homelessness among Nigerians. A peep at fixed home loan interest rate for private properties in Singapore revealed that it ranges from 1.85 per cent to 2.51 percent, with a monthly mortgage repayment sum of about $2,020 to $2,150 for a 25-year home loan of $500,000.

While the housing sector in the United States contributes 36 per cent to their Gross Domestic Product (GDP), South Africa had 30 per cent but in Nigeria, it is 0.5 per cent. Given the dicey situation, stakeholders have called on government to lower the interest rate to single digit, without which the provision of affordable housing would remain a mirage.

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Reacting to absence of viable mortgage system in Nigeria, the president of Mortgage Bankers Association of Nigeria (MBAN), Mr. Adeniyi Akinlusi said that the room for improvement is the biggest room in any endeavour. He noted that just like other sectors of the economy, that there is work in progress in the mortgage sector, adding that experts have been brainstorming to fix grey areas militating against growth in the sector.

The key mortgage players have been collaborating to fix the weak system. Akinlusi asserted that working with stakeholders like FMBN, Nigeria Mortgage Refinance Company (NMRC), Nigeria Deposit Insurance Corporation (NDIC) yielded result as the Central Bank of Nigeria (CBN) unveiled the Uniformed Mortgage Underwriting Standards (UMUS) for the informal sector and self-employed months back.

Added to this is the validation of Uniformed Mortgage Underwriting Standards (UMUS) for non- interest housing finance so that Nigerians that were sidelined could key into housing. The president emphasised that the association is also brainstorming on problems associated with titling, which he believed would affect housing supply and demand. He disclosed that less houses would be built if the cost of titling is cumbersome, stressing that it takes between six months to two years and 14 procedures to perfect titles all over the country.

Akinlusi pointed out that MBAN is in talks with all the stakeholders including the state governments to ease obstacles associated with titling, adding that it is the major reason for promoting formula 1-3-1 since the cost of titling is between 22 to 50 per cent. He said, “We are proposing that it should be one per cent, then it should not take more than three days and in one desk”. The president stated that if state governments could lessen the cost of titling, that it is the easiest way to raise Internally Generated Revenue (IGR), noting that many property owners are unable to obtain titles due to outrageous cost.

Akinlusi also pointed out that issuance of mortgage would increase visibility in other areas, adding that by giving mortgages to Nigerians at the informal sector that they would insure their houses. This, he said would translate to increase in insurance penetration as they would be motivated to open a voluntary pension account that would increase pension penetration in the country.

He said, “You can also use the tool to increase IGR by making it a requirement for them to show their tax card because if they need a mortgage, they will register with the government and be enrolled in the tax net”.

Akinlusi was optimistic that with increased IGR that states would have more money to execute capital projects if the mortgage sector takes centre stage in the economy.

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In his contribution, a real estate developer, Arc Adewunmi Towolawi Okupe lamented that Nigerians cannot buy houses due to poor mortgage system. He said that the ratio of housing cost to monthly salaries is high, which made it impossible for workers to own homes.

Okupe maintained that housing loans are offered at a very high interest rate, which is why most mortgagors are unable to repay. He appealed to federal government to introduce stringent measures aimed at boosting mortgages by lowering the interest rate to single digit. Okupe also sought the introduction of local building materials and technology that could reduce the cost of houses as well as making repayment easier. He advocated a home design for every level of income earners in the country adding that Nigerians should cut their choice of homes according to their earning.

The expert was optimistic that the establishment of mortgage institute could address the challenges. On ways of enhancing visibility in the sector, he said, “If government can give out loans practically on time for people to build homes that are less than N6.5 million and make sure that the people who access the funds are the real people that need it and not retailers, then some of the problems in the sector can be addressed”.

In the same vein, the president of Real Estate Development Association (REDAN), Rev Ugochukwu Chime decried over 53 per cent unemployment among the youths especially the school leavers. He noted that a sustainable housing sector would be created by organized private sector while the government provided an enabling environment for the investment to grow.

Chime pointed out that land issues were the exclusive reserves of the states government as the custodian of the land. He listed barriers to mortgage operations as lack of long term funds and land administration policy. Chime asserted that since land is on the concurrent list of legislation, that it provided opportunity for states to define their own land administration policy.

This policy, he believed have empowered states to see land as oil, a situation that increased transaction cost and time adding that accessing land documents takes between 3 months to one year. He added, “We have discovered that if you build a house of N10 million that the cost of perfecting the house can be as much as N30 million”. Worried by the inability of workers to own homes, the Federal Mortgage Bank of Nigeria (FMBN) has commenced the implementation of the new approved conditions for accessing loans from the NHF.

This includes zero equity contribution for loans of N5 million and 10 percent contribution for loans ranging from N5 to N15 million by contributors to the NHF The revised conditions which was recently approved by the board of FMBN, represent a 100 percent reduction in equity payment for housing loans. Managing director/chief executive officer of FMBN, Ahmed Dangiwa insisted that the downward review represented a key milestone in the management’s drive to enable workers afford decent and quality housing.

According to him, “I am delighted that we have been able to achieve this groundbreaking feat which is a huge win for the workers and particularly those contributing to NHF”. This he believed would reduce the financial burden that have marred home ownership for the past three decades even as he enjoined existing contributors to take advantage of the new conditions to secure loans to purchase or build their homes. He encouraged workers yet to enroll for NHF to register through FMBN offices located in states nationwide.

Chika Okeke

FMBN meets V.P over 500Billion Naira Recapitalization

The Federal Mortgage Bank of Nigeria plans to recapitalise to the tune of N500 billion, its Managing Director, Ahmed Dangiwa, has said.

Dangiwa, who spoke with State House correspondents after a closed door meeting with Vice President, Yemi Osinbajo, at the Presidential Villa, said the recapitalisation would boost service delivery.

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He said: “We came to see the vice president as a follow up to our request on recapitalisation and other requests and also to brief the vice president about our activities so far.

“We have briefed him on some of the activities we have rolled out like the Rent-to- Own and the introduction of equity contributions by the National Housing Fund that we have just commenced.

“We have to seek recapitalisation because over time, even commercial banks have recapitalised; N5 billion has been the share capital of the bank, but only N2.5 billion has been paid.

“Even other Private Mortgage Banks have recapitalised over N5 billion; with the recapitalisation of N500 billion, we will attract investment both local and informal-over 10 times of that investment and it is going to reposition the bank properly.”

According to him, under the Rent-to-Own product, one does not need to have any equity contribution, as one will enter into the house as a tenant, and over the years, it becomes one’s property like owner occupier.

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Dangiwa said that under the new programmes, one would find the estate that one wanted, enter there in collaboration with one’s employer; and then the house becomes one’s property.

The managing director said that the FMBN had funded estates in over 20 states of the federation, which any contributor to NHF could go and choose the house he wanted within the estates.

He said that the FMBN offices within the states would profile the buyer and then send to the head office for approval, adding that the bank had committed over N65 billion to the programme.

Dangiwa said that the vice president appreciated the efforts FMBN was making and promised to take the recapitalisation request to the National Economic Council meeting for further deliberations.

He said that there was need for Nigerians to key into the Rent-to-Own programe and own their own houses.

 

Nigeria out of recession, NBS insists

The National Bureau of Statistics (NBS) on Monday restated that the country was out of recession. The Head of Public Affairs and International Relations Unit, Mr Sunday Ichedi, said this in a statement in Abuja.

Ichedi was reacting to claims by some media organisations which suggested that the Statistician-General of the Federation and NBS, Dr Yemi Kale noted that the economy was still in recession. “We want to emphasise and state categorically that the economy is out of recession and at no time did the NBS or its CEO state otherwise as has been reported.

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“Recall that it was the same bureau that announced the end of recession in the second quarter of 2017. “This followed the announcement of the first positive growth in the nation’s Gross Domestic product (GDP) due to five quarters of contraction.

“Economic growth as measured by GDP has remained positive ever since (0.72 per cent, 1.17 per cent and 2.11 per cent in the second third and fourth quarter 2017 and 1.95 per cent in the first quarter of 2018).

“The NBS has stated several times that the stages after an economic recession is an economic recovery where the economy moves gradually following the end of a recession toward sustainable strong growth.

“This is the stage of recovery that we are now and was alluded to by the statistician-general during his interview.

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“That the economy is in the second stage of recovery, heading toward sustainable growth, which is the last stage cannot and should not be wrongly interpreted as the economy is still in a recession,’’ Ichedi said.

(NAN)

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