Housing Deficit Using Capital Market and Pension Funds
Housing deficit is a deficiency or lack in the number of houses needed to accommodate the population of an area. There are many issues on the ground about the housing deficit in Nigeria, but the biggest issue is the non-affordability of the houses that are available for the citizens. Looking at the salary of the civil servant, which of them can afford a house of N30 million. We will be looking at how we can address the issue of the National Housing Fund.
We want to do an appraisal of what the fund has achieved. It was a fund that established with the goal of making funds available for Nigerian workers to get affordable housing. With the National Housing Fund, the civil servants are expected to pay just 10 per cent and then spread the rest within a 25-year period. But with the situation on the ground, how many civil servants have access to the fund.
These are many questions that need to be answered by the government. We cannot talk about housing and leave out the issue of infrastructure. Coming to the city centre is a challenge. There is need to check the coordination of the activities of the newly established Family Homes Fund, FMBN, NMRC and Federal Govt. Staff Housing Loans Board; if indeed, there is any harmonious coördination between these agencies.
How do we address this Housing Deficit
Some of the Nigerians abroad want to own homes in Nigeria, But they are afraid to give their money to their relatives to build or buy a house for them. They do not want them to snap another man’s house and pretend that they are building it for them. How can they get homes here? Can we create a mortgage system for them? These are the issues we will be looking at. Governors will be involved. In fact, we are looking at how we can reorientate the attitude of these governors about the importance of housing.
Another issue is sourcing for capital to finance housing projects in the capital markets. This is an area that has not been used. There are shares and dividends lying wasted. The government can use these funds. Why can’t the Federal Government, through the Central Bank of Nigeria (CBN), have an intervention funding for housing? You are not a man until you own your house. We have decided to invite an expert from the World Bank on bank guarantees for house financing.
There is need to check the success story of countries like South Africa, Singapore and other countries in Africa that have gotten their housing scheme right. What is wrong with us? Why can’t we get our own right? It is time to be our policymakers to make housing sector work in Nigeria. Accessing a mortgage is a big challenge in Nigeria. In a simple language, how can Nigerians overcome this challenge?
The only way to discuss poor mortgage finance in Nigeria is for the Federal Government to have the political will and keep its promise of recapitalising the FMBN to the tune of N500 billion. That will make the Mortgage Bank have enough funds to give out to primary mortgage institutions. There is a need also for Central Bank of Nigeria to watch the activities of primary Mortgage banks to make sure that mortgage or mortgage refinancing loan are properly utilised.
There is need to know the number of houses or mortgages being created on a monthly or yearly basis, so we can use that to check all the development in the mortgage sector of the economy, to meet what we will need to set up a data bank for collation of data or information about Mortgage and housing in Nigeria. This no doubt will help in Policy formulation.
The Federal Government needs to work with the commercial banks to make sure they are able to reduce the housing deficit in the country. That is the only way we can solve the problem. We need intervention funds. Let the Federal Government budget a certain percentage of our annual appropriation on housing. Let us encourage our National Assembly members to go into constituency projects that will focus on housing.
Once the demands are increasing, prices will be forced down. Look at houses that were built during President Goodluck Jonathan’s era. Now, nobody is buying those houses in Abuja. The new innovation in the country is the Islāmic Banking. This banking is unique. It does not attract interest rates. Islāmic banking can help us. Today, one of the banks is financing a housing project at no interest rate. Another Islāmic Bank has a department for non-interest banking. All the banks are about to do the same thing. The challenge now is how to change the mindset of developers to key into the non-interest banking.