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FG plans to inject funds to recapitalise FMBN

By Favour Nnabugwu

The Federal Government had said it would inject funds in the Federal Mortgage Bank of Nigeria (FMBN) to enable the bank recapitalized, following FMBN’s return to surplus and that it would embrace the mortgage system to drive the on-going National Housing Programme when it finally comes on stream.

The Minister of Power Works and Housing, Mr. Babatunde Fashola said in Abuja yesterday, during the inspection of sites and building materials production facilities of some of the Private Sector partners in Housing Development in the Federal Capital Territory (FCT).

Fashola, who expressed delight that the bank was already on a recovery trend after six year of loss balance sheet, hinted that government would inject fund into it to enable it recapitalize as soon as it returned to clean books and could expand the Housing Fund under its management.

He said, “So once the bank goes back to clean books and expanding the housing fund which it is managing, government can say, as a matter of national policy, ‘look, capitalize, we will inject fund just as we have done with Bank of Industry and we are planning to do with Bank of Agriculture, we can do the same thing”, he said adding, however, that although the possibility was there, there must be a market in which to spend the money.”

According to the Minister, “The new management of the Federal Mortgage Bank, still in an acting capacity, has reversed the loss balance sheet of the company and for the first time in about six years, they are returning surplus from deficit in billions; they have a surplus of about N472million as at Q3 from N3-4-5 billion negative position”.

The Minister said embracing the mortgage system in the Housing Programme would also bring relief to the ordinary Nigerian worker as it would move the society away from the system whereby landlords demand rent in advance from tenants who receive their salaries in arrears.

On the readiness of the local housing materials manufacturing and building partners to meet the nation’s housing demands, Fashola, who said government was now at the stage where letters of awards were being issued, said since there was already a design, the builders would be told that once the design was validated then they would embark on mass production using polystyrene and other locally manufactured components.

Pointing out, however, that the typical concrete block models was being used to start with, the Minister reiterated, “Once we validate the designs then we do mass production”, adding that polystyrene models were not being used at this stage until when production was ready for industrialization. “That is what polystyrene brings, we industrialize construction”, he said.

Fashola, who said there was need to develop a system, noted that the models by some of the partners doing industrialized capacity would bring down the construction time and also reduce some of the costs, adding, “So we are giving out that design now of our own housing to them to say go and look at these designs, can you build it better and cheaper than us?

“As soon as they can show us that they can do that, we are going to the stage where we would say to them, ‘build, we would buy’. So if they have government as a ready buyer, it then becomes easier to contemplate a situation where they will finance because there is a guaranteed market”, the Minister said adding that the Federal Mortgage Bank would then do its core job of funding demand.

According to the Minister, there was need to address the supply side first before the Mortgage Bank would be asked to come in and do its part. He declared, “Thought out differently, if the Federal Mortgage Bank issues 100,000 mortgages to workers today, there are no 100,000 houses waiting to be bought; so we must address the supply side first”.

Fashola also emphasized the need to “re-sensitize” and “re-dimension” Nigerians in terms of what should be their legitimate expectations concerning what government could do and what it should do by way of the provision of infrastructure pointing out that it would be impossible for any government to provide the entire infrastructure needed by the people.

The Minister declared, “The same thing has to happen here if we really want to solve the problem. So we are going to need the Private Sector to build. What is missing is how we will converge this Private Sector with the market so that what they build is affordable to all the people”.

Explaining that Acceptability and Affordability were at the core of the Housing Development, Fashola declared, “So we can bring our cost; we can meet the market; because when we do that the Federal Mortgage Bank will do its work. Our work will now be more of research, assisting to improve design qualities that reduce cost”.


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