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Housing deficit: Recapitalise FMBN, stakeholders tell govt

For the country’s housing deficit to be addressed through long-term mortgage financing, stakeholders have called for the recapitalisation of the Federal Mortgage Bank of Nigeria to over N500bn.

According to them, the recapitalisation will widen the country’s mortgage space and deepen the housing finance market through mortgage creation.

While speaking on building a robust mortgage system in the country, at a recent housing summit in Port Harcourt by the Nigerian Institution of Estate Surveyors and Valuers, the Acting Managing Director of the FMBN, Dr. Richard Esin, said the mortgage system was still underdeveloped and could not effectively drive homeownership, as more than 90 per cent of new homes were built with funds from personal savings.

Esin said the sector was plagued by dearth of long-term funds for mortgage financing, low level of awareness of mortgage products, poor income and credit profile of potential mortgagors.

He listed other problems as poor capital base of mortgage institutions and high interest rates charged by mortgage institutions estimated to be between 18 and 25 per cent compared to the FMBN’s National Housing Fund’s loan of six per cent per annum for upwards of 30 years.

He said, “The way forward for housing provision will include providing long-term funding adequate for financing requirements through the recapitalisation of the FMBN to upwards of N500bn; ensuring full compliance with the NHF Act, which is capable of generating about N120bn annually; and the Federal Government and CBN’s intervention fund of at least N500bn.”

According to him, ensuring standardisation in the mortgage market through the adoption of the industry’s Uniform Underwriting Standards and creation of mortgage funds targeted at transactions related to the acquisition of housing units built in compliance with the National House Model designs, will  also help in meeting the housing needs.

The Director-General of the Nigerian Building and Road Research Institute, Danladi Matawal, noted that bridging the housing gap in the country would require the adoption of technologies and materials that reflected the concepts of modern methods of construction.

Matawal, who was represented by a NIBRRI director, Dr. Charles Osadebe, said this would help in reducing cost of construction by taking advantage of the speed of construction and sustainable materials in the process.

“Housing cannot be affordable if the cost of construction is high from the outset. To make any notable impact in reducing the cost of buildings, a significant component in a building must be targeted with a reduction in the components, which will in turn translate into an overall reduction in cost of buildings,” he said.

He said one of such methods would be the innovation of stabilising laterite with cement to improve its inherent mechanical properties to produce blocks/bricks that could favourably compete with or replace the conventional sandcrete blocks.

The Chairman, NIESV Faculty of Housing, Mr. Biodun Odeleye, said more than ever before, the current economic realities were pointers to the renewed energy, efforts and priority attention that government should devote to the important subject of housing.

He said, “We shall not relent in the drive to put this subject on the front burner and to constantly engage the government of this country until the needful is done.

“Very soon, we hope to meet the Minister of Power, Works and Housing for an opportunity to explore better areas of collaboration and to present a compendium of our previous summits with the communiques, while working out feasible strategies towards the realisation of government’s housing agenda, plan or initiatives; a plan that meets the peculiar socio-cultural needs of the people.”

Associate Professor of Land Management and Valuation, and the Director of Physical Planning at the Rivers State University of Science and Technology, Dr. Iyenemi Kakulu, said the government could fight crime through housing and urban regeneration.

She said that in order to fight crime through urban regeneration, the primary focus should be to restore a sense of community within neighbourhoods, adding that a housing strategy was required to reduce crime rate as well as the shortfall in housing.

“There is a massive shortfall of homes that most city residents can actually afford and a long-term plan is required stretching over a number of gubernatorial tenures. It is time for a paradigm shift in which housing should not be contemplated as a business opportunity for a few businessmen to engage in for the sole purpose of profit. It is a fundamental human right, which requires the collective effort of the citizenry and governments alike to make it work,” she added.

A renowned estate surveyor and valuer, Chief Kola Akomolede, noted that the success of the 10,000 houses to be provided in each state, as proposed by the Federal Government, would depend on how each of the professionals in the built environment carried out their functions.

He said any delay caused by any professional would definitely affect the overall success of the project, and urged the government to engage relevant professionals in the project.

He added, “For the success of the proposed 10,000 housing units in each state of the federation, I will request the Federal Government to please let each professional carry out their own duties. The last time we witnessed this kind of scheme was during the Alhaji Shehu Shagari government.

“Laudable as the scheme was, it was marred by incompetent contractors who were merely politicians with no knowledge of construction. Many of the houses have not been completed and occupied even as of today, almost 30 years after. Most of those occupied had to be completed by the allottees themselves.”

Originally published in The Punch

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