Indications have emerged that except there is a review of the nation’s mortgage system and amendment of the current Land Use Act, which often impact negatively on plans to shore up housing provision, the dream to deliver mass housing as being advocated may be a farce.
To this end, the apex mortgage firm, Federal Mortgage Bank of Nigeria, (FMBN) has commenced the process towards positioning the mortgage sector of the economy the breath to deliver on its mandate, while experts within the construction industry alongside FMBN are calling for urgent review of the Land Use Act.
Notwithstanding, however, the institution has said it is targeting to build between 40,000 to 100,000 housing units across the country within the next four years.
This target could be realised if FMBN’s management pushes through the desired reforms in the Nigerian mortgage sector including land use reforms and other prevailing regulatory legal hindrances.
FMBN’s Managing Director, Mr Gimba Ya’u Kumo, disclosed this at the 11th Edition of Lagos Housing Fair (LHF), held in Agidingbi, Ikeja, last week, said the review of controversial Land Use Act is imperative, if the projected housing delivery plan would be a reality.
In his paper titled, “Housing Finance through Mortgages: Opportunities for Low and Middle Income Earners in the National Housing Fund”, Ya’u Kumo noted that the housing market in the country was currently belaboured by a shortfall of about 16 million housing units adding that the shortfall requires over N56 trillion (at an average cost of N3.5 million per housing unit) to be remedied and improve on the nation’s prevailing home ownership rate of 25 per cent.
Speaking through FMBN’s Executive Director, Loans, Production, Security Insurance and Market Development, Mr. Bola Ogunsola, he said that the bank’s management is working on recapitalizing the bank to a minimum of N250 billion over the next 24 months in the medium-term in order to place it in a better position to take on more mortgage requests and also explore more offshore funding options.
He called for on the federal government to guarantee lifeline in favour of the FMBN to enable it commence bond issuances to tap funds from local and foreign capital markets and pension funds as well as tax concessions on housing-related investible instruments.
While urging the Central Bank of Nigeria (CBN) to enforce the provision of NHF Act on banks, insurance companies and other financial institutions, the FMBN boss stated that the New Prudential Guidelines should take into cognisance the long-term nature of mortgage lending as opposed to commercial facilities as well as provide for acceptance of alternative securities for mortgage facilities in view of delays in obtaining consents to land/housing transactions from state governments.
His words: “The Bank has the mandate to ensure that there is adequate liquidity in the Nigerian mortgage sector with a view to creating and nurturing a viable and robust housing finance system to improve homeownership for all categories of Nigerians through affordable mortgage services”, adding that the main function of the FMBN was to support the primary mortgage market with liquidity and financial capacity to provide affordable mortgage financing in the market.
Reacting to issues raised by the FMBN’s managing director, a member of the Lagos Housing Fair Board, Professor Tunde Agboola, who is also Urban and Regional Planner from the University of Lagos (UNILAG), said there was need for the review of the bank’s activities, if the targeted groups, the middle and lower income earners would benefit from its schemes.
For instance, apart from the need for the review of the Land Use Act, Agboola also saw the need for the apex mortgage bank to look at the activities of most of the primary mortgage banks (PMI).
According to him, “most of the PMI, instead of seeking the means of accessing loans for the prospective house owners, saw the opportunity as a clever way to make money, but when the system proved otherwise, many of them closed shops”.
He thereby tasked the FMBN to involve more ingenuity in its activities, saying the bank could not continue its operations in the usual orthodox and conventional way. “Every Nigerian deserves to be under a roof, therefore, FMBN should do unorthodox, going extra ordinary in the course of its activities and operations”.
Besides, he said that in view of the difficulties inherent in obtaining land title, one of the pre-conditions for accessing housing loan, the bank should assist the prospective house owners who may be arm string by stringent conditions by the various state governments in obtaining the document.
The Chairman, LHF, Mr. Moses Ogunleye, on the fate of the money being deducted by the National Housing Funds (NHF), and which majority of the contributors could not access the loan, Ogunsola, said any worker that contributed but could not access the loan would get his money refunded after retirement with two percent interest rate.
Source: The Guardian Website