An Abuja-based developer said it has secured the assistance of the African Development Bank (ADB) to finance the development of 5, 000 low income housing units in the country worth about $20 million, while also sourcing for other sources of funding.
Managing Director, AIS Integrated Company, Mr. Idachaba Sunday, disclosed this in Abuja recently, during an interactive session with members of co-operatives societies, aimed at preparing prospective mortgage seekers on how to benefit from the 5, 000-unit housing project.
Idachaba said that the firm is planning to make mortgage available at a single digit interest rate of not more than 7.5 per cent to ensure accessibility to the houses by the the low income bracket.
He explained that only the first phase of the housing scheme would be financed by ADB. “We are not relying 100 per cent on ADB, we are using them only for the first phase, we are also looking for other sources of funding outside the country because we cannot rely on our erratic nature of financial supply and changes of policy every year.”
According to him, the company would deliver about 5, 000 housing units in the first phase, adding that the arrangement has been concluded with its foreign financier to invest the said amount strictly on a single digit interest rate.
“The current two or sometimes, three-digit interest charged by most commercial banks in the country is not workable in the provision of low income housing in the country. That is why you still see many developers selling houses to highest bidders because of the eagerness to exit their loans.
“In realising the single digit interest rate, some of us had to source for off-shore funding. Our financiers complain of the inconsistent ways businesses are run in the country even from the government side too.
They complained of unnecessary bureaucracy in getting government papers. A document that should not take up-to two weeks in processing will sometimes take over six months in Nigeria.
“And the country is losing a lot by not providing the conducive structure for her citizens to access these foreign funds. But because of the charter between Nigerian and some of these foreign financiers, which compel them to allow equal accessibility by all countries that signed the charter, Nigerians can still access these funds but now at a cut throat conditions.
For instance, because of the bureaucracy of government, it has become very difficult for even the FMBN to raise funds from overseas. Like the law setting it up states that it must get approval from the Federal Executive Council (FEC) before getting any outside funding”, he stated.
The event was attended by co-operatives from several government agencies, including Nigeria Tourism, Development Corporation, NTDC, Civil Defence Corps, NAPTIP, among others.