Infrastructure funding: FG needs to borrow N1.6trn –Agusto & Co boss

 

The Federal Government has been advised to take more loans if its decision to fund infrastructure in the country will be realised.

Speaking at the training for financial journalists held in Lagos at the weekend, a Senior Analyst at Agusto & Co, Jimi Ogbobine, said the government will need about N1.6 trillion to fund infrastructure this year.

According to him, ‘Analysis of the Macroeconomic Environment’ sponsored by Rand Merchant Bank, was meant to deepen the knowledge of journalists on the economy and financial industry developments.

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Ogbobine said the bulk of financing for infrastructure will come from borrowing with a larger share being domestic debts.

He added that funding the capital budget will require higher than planned borrowing with adverse implications for interest rates and interest costs for the economy.

“The Federal Government borrowing to fund infrastructure is likely to be between N1.2 to N1.6 trillion. The implementation is unlikely to start before the second quarter and revenue is likely to be lower than planned.

Actual funding from asset restructuring, recoveries and “other” may be substantially lower than the planned level of N2 trillion. Therefore, fully funding the capital budget will mean higher than planned borrowing with adverse implications for interest rates and interest costs,” he said.

He added that obligatory spending of the Federal Government is still more than 100 per cent of revenues, hence, there is no free cash flow for investment in infrastructure. “Every kobo of infrastructure spending is financed by debt constrains ability to fully fund budgeted amounts.

Debt as percentage of revenue is significantly higher than the median, of 200 per cent, for countries in Middle East & Africa. Federal Government plans to partly finance 2018 capital expenditure with proceeds of asset sales,” he said.

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He said a hyper-inflationary environment is one where prices double at least every three years. “This means inflation rate of about 25 per cent per annum.

In such environments, investors hold savings in low inflation currencies in dollars, Pounds Sterling and Euros and business persons price products (particularly those with a high import content) in these low inflation currencies, usually the dollar. In effect, such environments are “dual currency environments”.

“Real Gross Domestic Product per capital should grow in 2018. It should be easier for businesses to access forex to fund their operations. Most businesses should see top line and profit growths.

Unemployment rate will fall but the level will remain high,” he stated.

Continuing, the analyst said actual deficit may be lower than planned deficit largely because of a low implementation of the capital budget.

Ogbobine said based on the long-term inflation difference, the naira-dollar exchange rate should close 2018 at about N420/1 in the Investors & Exporters’ FX Window. He however predicted that should oil revenues increase, as is likely, the CBN will try to keep rates in this market as close as possible to the current levels.

He explained that despite recent contraction in Gross Domestic Product (GDP) growth, Nigeria remains Africa’s largest economy, following rebased GDP figures in 2013. “Still a viable economy based on long-run projections.

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Significant issues with political stability, terrorism and scattered violence in certain areas. Heavily dependent on crude oil exports and facing severe economic challenges with the current global oil market shocks, terrorism threats, and attacks on key economic interests,” he said.

He stated that average oil price for 2018 is likely to be firmer driven largely by OPEC production cuts, stronger growth, high but declining inventories and political tensions in the Middle East.

“A lot is still contingent on ability to produce and evacuate oil from the Niger-Delta. Demand management of imports will continue. If Nigeria is able to produce and evacuate crude, she will build reserves but some of the reserves will be used to intervene in the Nigerian Autonomous Foreign Exchange (NAFEX) market to keep exchange rates in this market at near current levels,” he
added.

Ajiri Daniels

Time to explore opportunities in social housing

 

Great opportunities abound in the social housing sector of the economy but successive governments in the country have not been able to utilise these opportunities to the benefits of the public.

The social housing sector has all the hallmarks of a sector that will see increasing challenge over the next few years.

Recent industry debate has focused on the need for, and means to deliver, accelerated levels of consolidation through various activities. The need for social housing stock has never been greater, but there will inevitably be winners and losers as the sector works through its issues.

Social housing is an umbrella term used to refer to rental housing which may be owned and managed by the state, by non-profit organisations, or by a combination of the two, usually with the aim of making it affordable.

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Social housing may also be referred to as a public housing which may be a form of housing tenure in which the property is owned by a government authority, be it federal, state or local government authority.

When you talk about social housing for the masses, the words that come to mind are cheap, affordable, non-profit driven, mass produced houses that could be occupied by low income earners, who may wish to save towards eventually buying such houses over time.

Generally, social housing deals with housing solutions that are priced and financed in a way that would ensure low-income occupants could satisfy their other basic needs.

Even though the scarcity of affordable housing affects all segments of the society, it is notably low-income earners who are most affected. The way and manner government build estates does not show that the poor masses are borne in mind.

The property market ought to service the low income earners in the society. The Nigerian urban housing market primarily targets high income earners and thus leaves large parts of the Nigerian population excluded from formal housing provision.

In general, low-income households face a number of barriers such as weak individual purchasing power; lack of access to housing finance; unavailable complementary goods, such as land and infrastructure; and insufficient housing supply required to meet the actual demand of the urban poor.

Executive teams, boards and their lenders need to be proactive in assessing the impact of recent policy changes and their options and response to them.

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With the range of stakeholders and the clear public policy interest, it is likely to take significant time and effort to deliver credible solutions for those providers with the most challenged business models.

Social Housing, in its various forms, has been an increasingly important part of the UK provision since the boom in house building following the end of the Second World War.

There are a variety of private, public and charitable enterprises that build, manage and maintain housing stock, with standards and rent levels subject to a high degree of regulation.

As of September 2015, there were 1,783 Registered Providers (RPs) of social housing who were registered with the Homes and Communities Agency (HCA), the sector regulator. The sector supplied some 2.7m homes in England, representing an increase of 1.5 per cent on the previous year.

Much of the growth in the sector was attributed to the increase in Affordable Rent Stock to a new high of 123,000 units (Source: BBC, April 2015).

The creation and provision of social housing is towards ensuring housing affordability. Affordable housing is therefore defined as housing which costs no more than 30 percent of the income of the occupant household. This is the generally accepted definition of housing affordability.

Frankly speaking, Nigeria’s housing problem is derived from a historical lack of focus on housing development.

Over the years, the country has not been able to develop a viable and sustained housing finance system either because of lack of expertise, up to date and knowledgeable industry leaders especially in the policy making arms, lack of funding for relevant institutional agencies/department, political and selfish gains. Housing plays a special role in the social, political but more importantly economic dialogue in most societies.

Housing has been known to be a major component of creating stable and healthy communities and it is often the largest single category of household expense. For housing to be successful, a country like Nigeria needs to have a stable macroeconomic environment. Moderate to high inflation rates and nominal interest rates as witnessed in Nigeria are typical features of volatile economies.

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These features have strong effects of reducing the affordability of mortgages. A volatile economy also affects the supply of funds and the types of mortgages offered by lenders. In such an environment, lenders are concerned about liquidity risk and are reluctant to offer long term loans.

The solution to this, then, becomes government’s strong institutional intervention in terms of favourable policy drafting and implementation.

The coming on board of the Nigerian Mortgage Refinance Company (NMRC), is a commendable step towards scratching the surface of this challenge. This is despite the fact that the NMRC is dragging the feet in most of the roles it should take.

Another distinguishing characteristic of housing finance is the ability to mortgage the property to secure the loan. This means that the land laws and processes (title registration, foreclosure laws, etc.) have to be put in place to allow enforceability.

An accurate and comprehensive land registration system is a necessary condition for effective property rights. This is largely absent in Nigeria. However, it is important to mention that a few states have begun to address this problem through the setting up of several land registries at the state level.

It is pertinent that the states are encouraged to get these initiatives to a cruising altitude. At the Federal Mortgage Bank of Nigeria (FMBN), tireless efforts are being made to also contribute to solving this problem through the bank’s centralised repository land and assets registry system.

At the Federal level, creating or sponsoring a Mortgage Electronic Registration System as is done in the United States and other emerging markets will also help to increase the ability to mortgage properties.

Social housing delivery is therefore housing delivery that not only provide good quality and affordable housing, but allocates its benefit equitably between the rich and the poor. It also regenerates the environment rather than destroying it.

Also, it empowers the poor to have access to decent homes at affordable cost rather than mitigating or excluding them. In sum, it can be described as housing delivery system which gives priority to the disadvantaged groups, enlarging their housing choice and opportunities and giving
them a say in decisions that affect their housing needs and lives (Agbola and Alabi, 2000).

Maduka Nweke

COCMEGG commends FMBN on its positive efforts towards affordable housing

 

The Coalition of Civil Societies and Media Executives for Good Governance in Nigeria (COCMEGG) has lauded the Federal Mortgage Bank of Nigeria (FMBN) for making homeownership affordable, available and less cumbersome to Nigerian workers.

The affordable home ownership according to the group will drive growth of the economy. A statement issued in Abuja and signed by the president, Omoba Kenneth Aigbegbele and publicity secretary, Comrade Inuwa Sule, respectively said the FMBN under the leadership of Ahmed Musa Dangiwa is raising the hope of Nigerians desiring to have houses of their own.

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This is following the organisation’s appraisal of the bank’s efforts in carrying out its regulatory roles and functions as enshrined in the Act establishing it.


“COCMEGG passes a vote of confidence on the hierarchy of the Federal Mortgage Bank of Nigeria (FMBN), under Arc. Ahmed Musa Dangiwa, for its forthrightness, vision and strategies in seeing to it that the average workers, middle income earners and the common man on the streets have a home to lay their heads and therefore, called on all relevant stakeholders in the industry to support and partner with the institutional development, transformational philosophy and revolution presently taking place at the FMBN and key in for the overall prosperity of the Nigerian workers,” it stated.

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The statement lauded introduction of the zero equity on loans to Nigerian workers by the bank for the implementation of a new approved condition for accessing loans from the National Housing Fund (NHF). The group added that the initiative will lead to the reduction of hardship presently experienced by Nigerians in having access to building their own houses. “It is indeed a strategic initiative that will not only drive the mortgage industry but the economy as a whole as it will also boost and encourage people at the grassroots by enriching their wellbeing and making life easy for Nigerians by engaging more people in the construction sector.”

The World Bank had estimated that Nigeria has a housing deficit of about 17 million units and the FMBN has therefore, designed the NHF to mobilise funds to provide the citizens with affordable residential houses through accredited PMBs with the lowest rate possible. “Since the present leadership took over the helms of affairs, it has been plethora of initiatives, as the apex mortgage body has experienced a lot of milestones ranging from good governance practice, accountability and transparency in its core operations including institutional capacity building and infrastructure development of the bank.”

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It is on record that Nigerians have never been so sensitized in the last three decades, unlike what we are seeing today towards homeownership, as the management’s strategic awareness, enlightenment and sensitisation campaign have created the needed impetus for the boost of the industry as witnessed by all today.

Tarkaa David

FG plans to commission NHP projects in 33 states

 

Barring any last minute hitch, the National Housing Programme of the President Muhammadu Buhari-led government will be commissioned in about 33 states of the federation before the end of this year.The President Muhammadu Buhari-led government’s effort at addressing the huge housing deficit in Nigeria, which is estimated at 17 million, gave birth to the National Housing Programme.

Under the programme, the federal government through the Federal Ministry of Power, Works and Housing, embarked on the construction of massive national housing schemes in 33 states of the federation. The project, according to the Minister in charge of the ministry, Mr. Babatunde Raji Fashola, SAN, aside from providing affordable and accessible houses for Nigerians, has also created employment opportunities.

In what appears as his testimony, the Minister whose ministry is directly in charge of the National Housing Programme, declared that it has yielded its first expected result of creating employment for youths.Fashola, who spoke recently while on the inspection tour of the project site in Imo state, said that the programme was initiated as part of efforts by the Federal Government to get the teeming youths across the country back to work.

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“The very first thing that we needed to achieve has been achieved; get people back to work, move the economy back to growth and get the economy out of recession.”“From the food vendors to the number of companies that are employed here, you can see building materials; you can see labour and you can see an ecosystem of growth.”

A tour to some of the project sites across the country, where some of the NHP projects are sited recently revealed that would be-beneficiaries of the housings units would have access to their allocation in the next couple of weeks.Aside from the fact it would provide houses for Nigerians, it has also created jobs for thousands of all cadres of Nigerians.

Its commission date though Housing News could not ascertain, a source at the Federal Ministry of Power, Works and Housing, hinted that it would be commissioned soon.
The source said everything about the commissioning has been perfected, saying that it may be done during the presidential campaign.

“Let me assure you that the NHP project would be commissioned before the end of this year (2018).
Everything about the event has been perfected”, the source said.

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There is however some issues like; compensation to the traditional land owners, provision of parameter fencing and allocation to Nigerians that truly need affordable homes which need to be addressed.One of the critical issues that should be urgently addressed before the commission date and handing over of the project units to its owners is compensation of the traditional land owners.
From South to the North, one of the agitations of the locals whose communities are the beneficiaries of the project is issue of the compensation. This however, is not the responsibility of the federal government.

Tope sunday

FHF to deliver decent accommodation for fairly low to modest income earners

 

The Managing Director of Family Homes Fund (FHF), Dr. Femi Adewole has said that FHF is committed to doing an excellent work in providing housing that people on low income can afford.

He made this statement during an Interview with HousingNews Crew earlier today in his office.

“we are doing tons of work in ensuring that we bank adequate land in good locations where these homes will be sited.

“We are ensuring that we maximize the efficiency of the design of these homes which is key to ensuring that we deliver the affordability that our people need” He said

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According to Dr. Femi, In line with the mandate which is centered on providing large scale affordable housing supply and economic development, “FHF is working in partnership towards providing up to 500,000 homes and 1.5million jobs from now till December, 2023”

“Primarily, we are working with partners who can build to scale so that we can harvest the economies of skills that then goes on to deliver lower prices to our target customers”

“we are currently talking to REDAN, Housing Corporations, Federal Ministry of Power, Works & Housing, State Governments, and other parastatals. We are bringing a whole range of people together to partner with us as they all have key roles in ensuring that this programme succeeds” he said.

Dr. Adewole said that FHF is putting a structure in place that allows people to actually be able to afford those houses and be able to buy them even after they have been built.

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“We are coming up and in the final stages of designing home loans assistance program that will ensure that our target market which is basically people who are earning fairly low to modest income can have access to decent accommodation at no more than 30% of their income.” He said.

The M.D. Family Homes Fund expressed with assurance that FHF being the largest housing fund in Sub-Saharan Africa stands a strong chance in delivering on its mandate.

“Because of the large capital that we have, the Family Homes Fund is the largest housing fund in sub-Saharan Africa so we are financing the program with a significantly concessionary interest and rate for development. If we put all those things together, I think it gives us a strong chance for delivering on the mandate.”

Wilson Ifeoma, HousingNews, Abuja.

£2bn fund for building low-cost homes, Theresa May declares

Prime minister to call on associations to help end social housing ‘stigma’ that sees tenants treated as ‘second class citizens’

Housing associations will be handed £2bn in new funding to help them build low-cost homes, under plans set to be announced by Theresa May tomorrow.

The prime minister will tell associations they will be allowed to apply for money for the next decade in a bid to give them greater financial security.

Ms May will also call on housing providers to help end the stigma around social housing that, she will say, sees many politicians “look down on” people who live in low-cost homes.

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She will tell a conference of the National Housing Federation, which represents housing associations, that “the most ambitious” providers will be able to bid for government money to last them until 2028-29.

The money will come from housing budgets in the next spending review period – the details of which are not expected until next year.

Ms May is expected to say: “You said that if you were going to take a serious role in not just managing but building the homes this country needs, you had to have the stability provided by long-term funding deals. Well, eight housing associations have already been given such deals, worth almost £600m and paving the way for almost 15,000 new affordable homes.

“And today, I can announce that new longer-term partnerships will be opened up to the most ambitious housing associations through a ground-breaking £2bn initiative. Under the scheme, associations will be able to apply for funding stretching as far ahead as 2028-29 – the first time any government has offered housing associations such long-term certainty.

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“Doing so will give you the stability you need to get tens of thousands of affordable and social homes built where they are needed most, and make it easier for you to leverage the private finance you need to build many more.”

Ms May will demand associations “achieve things neither private developers nor local authorities are capable of doing” and call on them “to take the lead in transforming the very way in which we think about and deliver housing in this country” by “taking on and leading major developments themselves”, rather than simply buying properties built by developers.

She will also ask associations to help end the “stigma” around social housing, admitting that too many people, including politicians, “look down on” people who live in low-cost homes.

“For many people, a certain stigma still clings to social housing. Some residents feel marginalised and overlooked, and are ashamed to share the fact that their home belongs to a housing association or local authority”, she will say.

“And on the outside, many people in society – including too many politicians – continue to look down on social housing and, by extension, the people who call it their home.”

She will add: “We should never see social housing as something that need simply be “good enough”, nor think that the people who live in it should be grateful for their safety net and expect no better.

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“Whether it is owned and managed by local authorities, [tenant management organisations] or housing associations, I want to see social housing that is so good people are proud to call it their home… Our friends and neighbours who live in social housing are not second-rate citizens.”

Ms May used her speech at last year’s Conservative Party conference to announce £2bn of new investment in low-cost housing – enough to build 5,000 new homes per year – although this was criticised as being significantly less than is needed.

No 10 said the new £2bn was in addition to the amount announced last year.

However, Labour said the latest cash injection would not be enough to reverse the impact of previous cuts to housing budgets.

John Healey, Labour’s shadow housing secretary, said: “Theresa May’s promises fall far short of what’s needed.

“Any pledge of new investment is welcome, but the reality is spending on new affordable homes has been slashed so the number of new social rented homes built last year fell to the lowest level since records began.

“If Conservative ministers are serious about fixing the housing crisis they should back Labour’s plans to build a million genuinely affordable homes, including the biggest council house building programme for over 30 years.”

Benjamin Kentish

Legislative reform and drive towards model mortgage

 

To mortgage sector stakeholders in Nigeria, the need for a functional mortgage system cannot be over-emphasised. This is why the drive towards a model mortgage is receiving all the attention that it requires.

At the fore-front of this drive is the Nigerian Mortgage Refinance Company (NMRC) which is riding on the relative successes it has achieved in the past couple of years of its establishment and pushing for the adoption of a model mortgage and foreclosure law by the states.

As part of efforts at growing a mortgage system that will drive affordability, the company is presently driving a legislative reform in the mortgage sector by proposing a model mortgage and foreclosure law by key pilot states including Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Enugu, Kano and Ogun states.

What the company is driving at, according to one its directors whose primary mortgage bank is a major shareholder in the company, is to get various states houses of assembly to pass foreclosure laws as a prelude to mortgage-backed affordable housing delivery.

This is good news for home seekers who may need mortgage facility because foreclosure law, upon adoption, aims to fast tract the process for creating legal mortgages, ensuring timely resolution of disputes and creating an efficient foreclosure process.

According to the authorities of the mortgage refinancing company, the model mortgage and foreclosure law is in its final form for engagement with 21 pilot states committing to the implementation of an enabling environment for the development of the mortgage market.

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The company hinted that it would be focusing on building capacity and completing outstanding operational activities. “We will be embarking on an aggressive drive towards the procurement of an ICT infrastructure for the mortgage industry, the completion of our second tranche equity capital raise, and most importantly the completion of our first round of mortgage refinancing; we will work hard to meet our mandate to revolutionize the Nigerian mortgage landscape”, an official of the company hinted.

The company has demonstrated uncommon resolve to live out its mandate with refinancing of some mortgage banks. Mortgage operators have described this refinancing as a milestone and, according to Ben Akaneme, Imperial Mortgage’s managing director, “this is an outstanding achievement in the march towards the realisation of affordable and single-digit interest rates for mortgages in Nigeria. He assured that his bank would continue to strive to achieve its mission of enabling easily accessible and affordable mortgages to Nigerians in order to ensure housing for all.

NMRC seems to be conscious of the demands and obligations inherent in the Nigerian business environment as it assures that it will continue to anchor all its services on global best practices, good corporate governance and strict risk management practices.

By now, the company might have got from its shareholders the approval to, among other things, increase their capital base for three main reasons including capital adequacy, mortgage refinancing and procurement of necessary infrastructure.

As at the time when this request was made, the shareholders who saw the need for capital adequacy for the company, especially for its mortgage refinancing function, could not, however, come to terms with the management‘s explanation on the issue of infrastructure and, therefore, insisted that the capital raise be put on hold until the management was able to spell out those items of infrastructure that made the capital raise necessary.

NMRC came into the Nigerian mortgage market on a very high pedestal, promising a major shift in the interest rate regime in the market. But the authorities of the company have said that, though it is a partnership between the government and the private sector, the company operates as a private sector-led institution, relying on the market to determine interest rate on mortgage loans, meaning that the rate that applies to commercial loans also applies to its mortgage.

“The desire of NMRC, the Primary Mortgage Banks (PMBs) and the Central Bank of Nigeria (CBN) is to achieve single digit interest rate, but we are not there yet because the market does not allow single digit interest rate”, the official said, adding, “as it is today, we cannot meet the single digit interest rate until we are able to reach that point where the market allows it”.

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Right now, the company is working under market conditions hoping that, over time, as the market deepens and grows, the issue of single digit interest rate will be expected. Whatever the rate is today, the desire is to drive it down to single digit.

Chuka Uroko

Obaseki’s affordable housing: Emotan Gardens’ first phase of 86-units ready by year end – EDPA boss

 

In what has been described as a revolution in Edo State’s housing sector, the first set of homeowners in Governor Godwin Obaseki’s affordable housing project, Emotan Gardens, will move into their property at the end of the year.

Emotan Gardens Executive Chairman, Edo Development and Property Agency (EDPA), Isoken Omo, disclosed this in a chat with journalists and assured prospective buyers that 86 units of the houses, which constitute the first phase of the project, will be delivered before the end of 2018.

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She said, “Emotan Gardens is a 1, 800-unit gated housing estate which will be done in phases and clusters. The first phase is actually a show phase with about 86 units in it. When it is finished, people can live there. While they are living there, the other phases will be built. In the end, everything will be joined together to become a full estate.”

She explained that the construction of the 86 units is ongoing and assured that it will be ready at the end of the year, noting, “By then people will live there. There will be infrastructure and not just the houses will be ready. We will have roads, lawns, water and electricity there.” According to her, “The sales for the properties opened at the Edo National Association Worldwide (ENAW) convention, in Toronto, Canada. All the slots are available. Because it is being delivered in phases, it will work in two ways so that we will deliver on our promise. For example, if you don’t have all the money, and then deposit some amount and tell us when you want it ready, it gives us enough time to build up capital.”

On the first phase, Isoken explained, “We have different types. We have four 2-bedroom in a row; 3-bedroom row of houses, 2 and 3-bedroom semi-detached; 3-bedroom semi-detached; blocks of flats; 4-bedroom stand-alone bungalows, terrace houses, 3-bedroom with a maid quarters.

“We have commercial plots and residential plots. Within the commercial plot, we have shopping malls. Within the estate, we have made provision for school, hospital, police station and all those things you need in a community.”

Explaining that there is provision for those who want to build for themselves to buy plots of land, she said, “You can buy a plot of 450 sqm land or 900 sqm land. There is a design guide but it is not rigid. The guide is to ensure homogeneity.”

On the prices for the houses, Isoken said, “The house starts from N5.7 million for the cluster of 2-bedrooms and it goes up to N7m, N8m, N9m and so, according to the housing type. But N5.7m is the entry price. We expect 25 per cent down payment at expression of interest, and then you complete the necessary forms, including the Know Your Customer (KYC) form.

She explained that the KYC form is to “ensure the money is not laundered, and that it came from a clean channel. The onus is on us to check that to ensure we don’t fall foul of the laws. After this, we process the form, then you pay the deposit and we send you your Letter of Offer with terms of payment.

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“There are different payment options. We have outright purchase; 18-month payment plan for payment in tranches, and mortgage arrangement. We are looking at different mortgage options that people can tap into which will be affordable.”

Isoken assured prospective buyers that the model house and other houses on that row are nearly completed, while painting work is ongoing, adding, “The inside of the model house is ready. We are painting others on that row. Some are at the roofing stage, others are at the block stage. By December when we are ready to deliver, all of them will be ready. At the same time work is ongoing on the greenery.”

FMBN, NHIS, PenCom AND PENSIONERS

The Federal Mortgage Bank of Nigeria (FMBN), the National Health Insurance Scheme (NHIS) and the National Pension Commission (PenCom) are three major institutions that have profound influence in the way the welfare of Nigerian workers, retirees and pensioners is shaped.

The three institutions share certain features in common: one of the features is that Federal Government employees are automatically enrolled as contributors to the pool of money meant to make it easier for them to meet their need for housing and basic health care while still in service, and periodic pension payments on retirement, respectively.

The amount of money deducted from the salary of each worker as contribution to each of the trio is decided without any consultation with the worker. This feature, which negates the principle of participation, is also common to the three organisations.

The decision on how and when any worker can benefit from his own money deducted and lodged with them ostensibly to further the welfare of the worker is left to the three powerful institutions to choose. This is another shared feature.

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To illustrate, the Federal Mortgage Bank of Nigeria may only advance loans to a worker to build or renovate or purchase a house when its management deems fit to do so, not necessarily based on the urgency of the need of the worker to have accommodation. Likewise, the NHIS, in addition to severely limiting the type of health care accessible by workers, it totally denies retired contributors access to its services regardless of the extent of their need for such services.

They are denied, even at the point of death. On its part, the National Pension Commission is supposedly constrained by the Act establishing it to pay Federal retirees a single kobo out of their Retirement Savings Accounts, even in the face of starvation, except after the Benefit Redemption Fund is activated in favour of the retirees. Some people perceive this arrangement as absurd.

The way and manner the three institutions operate need to be tampered with a human face; with empathy and in the context of the spirit of the humane intention that justified the establishment of each of the three institutions.

While the PenCom was busy earlier this week talking to Directors of Pension Operations, frustrated retirees under the Contributory Pension Scheme, which the Commission oversees, were crying out loudly for attention and payments of their pensions in several states of the country. So unsettling.

In the case of the Federal Mortgage Bank of Nigeria, its Managing Director told State House Correspondents after his meeting with the Vice President of Nigeria that a fresh approach toward facilitating house ownership has taken off, thus raising hope on future housing projects for thousands of beneficiaries with zero equity subscription. This is a good initiative, but the reported case of 2017 and 2018 retirees who are still patiently waiting for the refund of their contributions to the National Housing Fund (NHF) by the FMBN should be treated with the urgency it deserves. September is especially significant as school children resume, and the refunded money can be handy for many in paying school fees.

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The sum total of this article is that the Acts establishing the three institutions, which came into being to preserve and advance the welfare of their contributors, should be usefully flexible: in the case of the FMBN the zero equity approach is good, the rent-to-own concept is wonderful with lower interest charges; the NHIS establishment Act deserves amendment to extend access to basic health care to pensioners who were contributors. The PRA 2014 should be revisited to make it possible for retirees to access part of their savings while remittance to their RSAs from the Benefit Redemption Fund is processed.

The three institutions should be the drivers of the process of making their operations flexible in the interest of their clients.

Salisu Na’inna Dambatta

 

Barclays and UK government plan £1bn housing fund

Bank chairman John McFarlane says fund will address ‘vital need’ for new homes

Barclays and the UK government have revealed plans for a £1bn fund to help property developers meet what the bank’s chairman calls a “vital need” for new homes, including social housing and retirement homes.

The UK bank will commit £875m to a new Housing Delivery Fund, alongside £125m from Homes England, the government’s national housing agency. Small and medium-sized house builders and developers will be able to take loans of between £5m and £100m to fund their projects, with a loan-to-value ratio of up to 70%.

The goal is to diversify the housing market, Barclays said in its statement on the fund, adding that almost two-thirds of homes are currently built by just 10 companies. The fund will be open to existing Barclays clients as well as new customers and will prioritise builders of social housing, retirement homes and homes for private rental.

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The interest rate of the loans was not disclosed, but Barclays said they would be “competitively priced”.

Barclays chairman John McFarlane said: “There is a vital need to build more good quality homes across the country. This £1bn fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need.”

James Brokenshire, the housing secretary, said: “This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market.”

Then-housing secretary Sajid Javid launched Homes England in January as the successor to the Homes and Communities Agency.

The government has set a target of delivering an average of 300,000 a year by the mid-2020s. Its housing white paper, published in February 2017, described the UK’s housing market as “broken”.

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In her foreword to that paper, Prime Minister Theresa May wrote that the government’s goal is to “fix this broken market so that housing is more affordable and people have the security they need to plan for the future”.

May went on: “The starting point is to build more homes. This will slow the rise in housing costs so that more ordinary working families can afford to buy a home and it will also bring the cost of renting down.”

She added that diversifying the housebuilding market would involve “opening it up to smaller builders and those who embrace innovative and efficient methods”.

Tim Burke 

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