As CBN champions housing sector reforms

By Chris Ochayi

In a bid to address the issue of shortage of housing accommodation confronting its citizens, the Federal Government has injected a whopping N200 billion into housing development through the Federal Mortgage Bank of Nigeria, FMBN.

Minister of Lands, Housing and Urban Development, Ms. Ama Pepple who disclosed this at a stakeholders’ roundtable on housing and mortgage finance organized by the World Bank and the Central Bank of Nigeria, CBN, in Abuja, noted that as the economy improves, disposable incomes of workers will increase and their ability to access mortgage finance will no longer be encumbered.”

A medium-income estate... lack of mortgage facilities hinder their acquisition

She explained that the sustained intervention in the housing sector will increase the housing stock and substantially reduce the deficit in sustainable and decent homes which is presently estimated to be between 16 -17 million housing units.

The Minister observed that with an estimated national population of 150 million people, rising population growth rate, growing urbanization, as well as increased demand for sustainable housing across the country, “the only way to avert an imminent housing crisis in the foreseeable future is to immediately embark on concrete actions to reduce the housing deficit.”

In order to ameliorate the present conditions in housing sector, the federal government she said has recognized the need to accord priority attention to some key initiatives. “These include the review of the national housing policy, review of the national building code and targeting of low income earners in the delivery of affordable houses under social housing,” she said

She stated that the present situation where Nigerian artisans are not competitive relative to their counterparts from neighbouring West African countries will soon be a thing of the past. This is because the government plans to progressively build the national capacity in the development of skilled manpower for the housing sector through several targeted interventions, including the commissioning and take-off of new Institute of Architects and Artisans in Lugbe, Abuja.

The introduction of title and mortgage insurance products to take care of title defect and mortgage defaults she noted will also be given priority attention since the government has already taken steps to reform the administration of the National Housing fund (NHF) to enable it to serve as an effective anchor of housing delivery in Nigeria.

On the provision of land across the country for its mass housing initiative, the Minister said the government “will continue to work collaboratively with the 36 states of the Federation and the Federal Capital Territory Administration, FCTA, Abuja as well as Local Governments in view of their importance as strategic partners, especially in the provision of lands and the development of the necessary policy frameworks for a concerted, integrated and inclusive approach to resolving the challenges militating against the vibrancy of the housing sector.”

Also government plans to expedite action on land reform and simplify procedures to fast track the preparation of title documents.

Ms Pepple assured Nigerians that their expectations will not be dashed as government is “more than ever determined to achieve far-reaching and visible results that will impact positively on the lives of Nigerians”.

CBN boss speaks on impediments to housing finance

Central Bank of Nigeria, CBN’s Deputy Governor Financial Services Surveillance, Dr. Kingsley Moghalu noted that presently, mortgage finance contributes less than one per cent of the Gross Domestic Product, GDP, in Nigeria which is a wide contrast to situations in some emerging markets like Malaysia where it accounts for 24.7 per cent, 29 per cent in South Africa and 85 per cent in New Zealand.

The housing sector in Nigeria he maintained “is in dire need of a reform which would involve the restricting of housing/mortgage finance system in order to achieve the much desired economic development objectives and the attainment of the Millennium Development Goals (MDGs).”

He identified some of the major challenges and impediments to housing/mortgage finance in Nigeria to include: dearth of long-term funds; absence of mortgage refinance/liquidity company or secondary mortgage market; weak capital and inadequate branch network of Primary Mortgage Institutions, PMIs for easy disbursement of loans from the National Housing Funds to contributors.