Homes & Property

May 8, 2018

NHF: Battle for control rages as Reps plan to break FMBN’s monopoly

NHF: Battle for control rages as Reps plan to break FMBN’s monopoly

Housing estate in Lagos

By Kingsley Adegboye

A proposed Amendment to the Federal Government Staff Housing Loans Board, FGSHLB Act  before the House of Representatives, may have set the stage for federal public servants to derive their full benefits which they have made as contributions to the National Housing Fund, NHF.

This is coming on the heels of the 50 per cent of the Federal Government employees’ contribution to NHF which the amendment is proposing should go to FGSHLB.

The National Housing Fund Act compels workers to contribute two and half per cent of their salaries to the fund and the law empowers employers to deduct the contributions at source. Although the law covers workers in both the public and private sectors, only federal public servants have been contributing to the fund faithfully, since the law took off in 1993.

The existing Law, setting up the National Housing Fund, gives the Federal Mortgage Bank of Nigeria, FMBN, the power to manage the funds being contributed by workers. But the apex mortgage bank operates as a secondary mortgage institution that does not deal with individual contributors.

This was identified as a major problem of accessing the fund by contributors, at a recent Public Hearing conducted by the House of Representatives Committee on Public Service Matters. The committee also heard that although the law demands FMBN to give individual contributors details of their statements of Account every year, the bank failed to comply by the provision of this law.

In fact, since the year 2000, organised labour has been kicking against continued contribution by workers to NHF on the ground that there was no guaranteed benefit.The grouse of labour against the scheme was that as at 2006, about 1.8 million workers were registered from 17,132 employers,  under the National Housing Fund,  with a contribution of about N6 billion to the fund,  but that only less than N280 million was disbursed to  a handful of 446 contributors as loans.

About N20 billion was said to have been contributed by workers to the fund between its inception in 1993 and 2006, and the law governing the fund, leaves the Federal Government Staff Housing Board  that has been operating a social welfare scheme, to provide houses for  Federal Government workers since 1924.

The last time the law governing the operations of the Loans Board was revised, was about 44 years ago, in 1974. An effort to amend the law during the 6th National Assembly in 2006 was inconclusive.

However, under the proposed amendment of the Federal Government Staff Housing Loans Board Act before the House of Representatives, Section 8 of the new Act is proposing that 50 per cent of Federal Public Service contributions to the NHF should be channelled to the Loans Board to guarantee contributors’ access to the fund.

In his lead presentation at the Public Hearing, the Director, Legal Services, in the Office of the Head of Service of the Federation, Mr Emmanuel Omonowa, proposed that “In view of the fact that contributions to the National Housing Fund is being done by Federal Public Employees, 50 per cent should be ordered in the Act, to be amended, to be paid to the loans board.”

He added: “Why do we say so? Number one, for anybody to retire from the Public Service today, he requests that you must bring a certificate from the Federal Government Staff Housing Loans Board that you do not owe. Therefore, these are the people contributing and they must come to the Board to obtain a certificate to show that they do not owe. Why not put their contribution here so that when they come for their certificate, if they have not obtained any loan, then you put their contributions together and give it to them?”

Omonowa said that by so doing, it will be easier for the service and the government, as well as the public. He said: “It would boost the confidence of the public that you are running a system. But what is on the ground is that deductions are made at source from their salaries but that money put together is given to the primary mortgage institutions to build houses that civil servants cannot buy. That is why we continue to have housing deficit in Nigeria. The contributor, who should be helped to put money together to own a house, cannot own a house and he cannot get his contribution back. This ought not to continue, so that we do not have our senior citizens, retiring with heart attack,” he said.

The Executive Secretary of the Federal Government Staff Loans Board, Dr (Mrs.) Hannatu Adamu Fika, debunked claims that the FMBN has been funding the activities of the Loans Board, saying, the only partnership that exists between the board and the Federal Mortgage Bank of Nigeria was initiated to douse tension among workers.

She said: “Recently, in order to douse the tension among contributors to the NHF from the Public Service, we were able to broker renovation loans of N1 million and as at now that I am talking, for the past two years plus,FMBN has been able to give us N1.5 billion, and N1.5 billion is not funding the Federal Government Staff Housing Loans Board. Our funds come from the Government and even that N1.5 billion that they have been giving, there have been schools of thought that say we are not a PMI (Primary Mortgage Institution) and it should be discontinued. So the issue of FMBN that it is funding us is not completely true.”

A representative of the Federal Mortgage Bank had told the Committee that “… I would like to point out that the NHF Act which empowers the Bank to manage the affairs of the fund is open to all contributors to the Fund. Civil servants and then the Public sector have been benefiting from it.”

The representative further explained: “We reckon that the Act provided for the monies collected through NHF, to be channelled through Primary Mortgage Institutions, PMIs, for on-lending to contributors and we have our problems there. We have been seeking to amend our own Act and then the NHF Act, to meet the realities of the time,” he said.