By Yinka Kolawole
The National Housing Fund (NHF) scheme has been able to deliver just 51,618 housing units across the country since inception in 1992, representing an average development of about 2,581 units per annum over the last 20 years.
For a scheme that was meant to be a kind of intervention programme to enable low and medium level income earners own houses, and against the backdrop of the much reported over 16 million housing deficit in Nigeria, this is like a drop in the ocean in meeting the housing needs of Nigerians.
The contribution of formal mortgage finance to home ownership in Nigeria is negligible. Today in Nigeria, out of the estimated 11 million housing units in the country, residential real estate is funded 86 percent through household incomes, 10 percent by public authorities, 3 percent by mortgage institutions and one percent by banks and business organisations. Apart from pseudo-mortgage products being offered by deposit money banks, often offered at a very high rate and with short tenors, the major source of mortgage lending for average income earners in Nigeria is the NHF, which was established by Decree No.3 of 1992 to facilitate the continuous flow of low-cost funds for long-term investment in housing for the benefit of contributors to the fund. The fund is managed and administered by Federal Mortgage Bank of Nigeria (FMBN) which provides long-term housing loans to individuals through wholesale lending to PMIs.
However, figures obtained from documents provided by FMBN shows that as at February 2012, houses built with Primary Mortgage Institution (PMI) loans are 18,668 units while those built with Estate Development Loans (EDL) are 32,950 units, making a total of 51,618 housing units delivered directly through the NHF scheme. Though, when FMBN floated N26 billion in 2007 as the first tranche of a N100 billion Mortgage –backed Bond, it helped refinance civil servants’ acquisition of 9,575 non-essential FG houses in FCT.
According to FMBN, the NHF collection as at February 2012 is N81.597 billion from 3,657,354 registered contributors. The bank noted that a total of about N34.036 billion has so far been disbursed as NHF loans through the PMIs, while N49.182 billion was disbursed as EDL loans, bringing the total NHF loans that have been disbursed to N83.218 billion.
Officials of FMBN, including the current Managing Director, Mr. Gimba Ya’u Kumo, have attributed the low performance of the Fund to non-remittance of contributions of employees to the Fund regularly. In fact, last year it was revealed that Ministries, Departments and Agencies (MDAs) of federal government are owing the Fund up to N100 billion in unremitted contributions.
From investigations, it was also discovered the Fund had been starved of money from sources stipulated by the NHF Act. For instance, the Act stipulated that every commercial or merchant bank shall invest in the fund 10 percent of its loan and advances at an interest rate of 1 percent above the interest payable on current account by banks. But there is no indication that banks have ever complied with this requirement.
Even the Central Bank of Nigeria (CBN) is a culprit in this infraction, because the apex bank is supposed to collect contributions from commercial and merchant banks as stipulated by the Act at the end of every year and not later than a month thereafter, and remit same to FMBN within two months of the collection. But the CBN has not been enforcing this provision.
Also every registered insurance company is expected to invest a minimum of 20 percent of its non life funds and 40 percent of its life fund in real property development of which not less than 50 percent shall be paid into the fund through FMBN at an interest rate not exceeding 4 percent. But investigations revealed that insurance operators are not even aware of this provision.
The Act also stipulated that the Federal Government should make adequate financial contribution to the fund for the purpose of granting of long term loans and advance for housing development in Nigeria, which has not been the case.