October 12, 2014

Shelter Deficit: One million housing units underway

Shelter Deficit: One million housing units underway

Goodluck Housing Estate, Idimu before completion.

By Charles Kumolu

WITH a housing deficit of 17 million units, it was not a surprise that the Federal Government,FG, through its various agencies, has embarked on programmes geared towards providing one million houses annually.

An indication that the resolve by FG could not be considered a lip service emerged at a forum tagged: Presidential Stakeholders Retreat on Housing and Urban Development, where it pledged to revolutionalise the sector by translating the National Housing Policy and National Urban Development Policy into a road map for housing development.

To achieve this, Nigerians enthusiastically looked up to the Federal Mortgage Bank of Nigeria,FMBN.

That the FMBN became the focal point did not come a surprise since the agency was established in 1956 to play the role of developing a robust mortgage finance system for the country.

With a mandate that among others include promoting the growth of primary mortgage institutions to service the need of housing delivery; mobilizing both domestic and offshore funds into the housing sector; linking the capital market with the housing industry, establishing and operating a viable secondary mortgage market to support the primary mortgage market and collecting and administering the National Housing Fund in accordance with the provisions of the NHF Act, the FMBN has no option than to remain a key player in the transformation agenda.

To surmount the challenges in the sector particularly the housing deficit, the FMBN, it was gathered, has initiated projects like the delivery of about 53,000 houses through the National Housing Fund ,NHF, launching of housing scheme for the informal sector, Estate Development Guarantee (EDG) scheme, among others.

Investigations showed that these measures are yielding results, despite the constraints.

Particularly, the launching of a housing scheme for the informal sector and delivery of about 53,000 houses and the resolve to recapitalise as part of efforts to boost operations in the nation’s secondary mortgage market have received applause across the country.

Speaking in that regard, Mr. Gimba Ya’u Kumo, Managing Director of FMBN, said: ‘’The Informal Sector Cooperative Society Loan Scheme product would enable operators in the informal sector like farmers, traders, artisans to benefit from the National Housing Scheme like those in the formal sector.

‘’The mortgage industry in Nigeria is just starting. If you look at the size of our contribution to the GDP it is less than one per cent, but my target before I leave here is that we should be able to contribute at least 15 per cent. That is why we are putting a lot of issues on ground to be able to drive this process. And how do you do that? If you look at the National Housing Fund (NHF) that we are managing, out of the 170 million population, less than one per cent are the ones contributing. So, we said this is not good. How do we reach the other segments of the society that are not in formal employment?, he noted.

Expatiating on the cooperative loan scheme, Kumo explained thus: ‘’Those in the lowest strata of the society have not benefited from loans, because they have limited capacity to pay for houses as the income they generate is very small. This led to the introduction of the Cooperative Loan Scheme. It was brought about to extend the bank’s services to people who can be termed disadvantaged in the society because their income is low, irregular and difficult to access under the NHF loan window.

What the bank has now done is to use cooperative societies in the informal sector. The services to people who can be termed disadvantaged in the society because their income is low, irregular and difficult to access under the NHF loan window. Since they do not get salaries on a monthly basis, what the bank has done is to look at ways to reach them so that they can contribute and also benefit by owning their own houses.’’

‘’The loan enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members. The parcel of land would have title in the name of the society which would act as facilitator on behalf of its members in the loan transaction and which would facilitate construction of the housing units. The root of the title of the estate land would be subleased to the beneficiaries.’’

While the various strides by the agency may not have met all the expectations of stakeholders, some are upbeat that the sector is now reposition for better service delivery.

Isaiah Dualong, Managing Partner of Havillah Shelter told VanguardFeatures,VF, that if the policies initiated in this dispensation are executed overwhelmingly, the mortgage challenge would be surmounted to a large extent.

He said: ‘’It is quite promising that we have seen programmes, which if fully implemented, would provide answers to the various housing questions in Nigeria. I am not in doubt that they are not on the right path. All we demand for is for the FG to keep faith in FMBN. Policy somersaults would not be in the interest of the good policies that have been put in place in the sector.’’

‘’I am aware that the FMBN, is working on mass housing schemes with a rent-to-own option for workers, to reduce the housing deficit in the country. If that is done, there will be mass housing scheme. It will also increase the number of completed mortgages from the current 20,000 housing units more than 200,000 units in three years. You can see that there are prospects in all these.’’

Similarly, Chief Chike Chiekwena, Managing Director, Chiekwena Homes, observed that there is a new direction for the bank and the nation’s mortgage sector, adding that there is need for a comprehensive database for generating statistics.

“Every responsible government does not joke with its mortgage sector. So we were relived when the federal exhibited seriousness about reinventing the sector. So far, there are prospects and they are doing well. However, there has to be incentives and necessary legal and regulatory environment to attract public-private partnerships in mass housing development,’’ he added.

Despite the applause across the country, further checks revealed that inadequate funding, had militated against achieving the mandate of FMBN.

Most industry experts told VF that re-capitalisation and cooperate governance, also constitute some the challenges the agency is grappling with.

That informed why Kumo urged the FG to increase the share capital of the Federal Mortgage Bank of Nigeria from its present N5 billion to N200 billion.

“We would also urge the Federal Government to increase the share capital of the Federal Mortgage Bank of Nigeria from its present N5 billion to N200 billion to enable the bank address the housing deficit in the country adding that addressing the over 17 housing deficit in the country would require aggressive injection of funds by the Federal Government,’’ he noted.

Continuing, he said: ‘’The bank presently has a share capital of N5 billion out of which the Federal Government has paid up its own share of N2.5 billion representing 50 per cent, while the Central Bank of Nigeria (CBN)  and the National Social Insurance Trust Fund ( NSITF) have not paid up their 30 and 20 per cent share respectively. The bank as it is grossly under-capitalised, compared to other countries even in West Africa disclosing that the government is currently working on ways to improve its capitalisation.’’