The Minister of Finance, Kemi Adeosun, has announced plans by the Buhari administration to launch a new housing finance initiative.
Under the proposed scheme, the Federal Government is planning a mortgage system that will catalyse the development of the mortgage market in Nigeria with the provision of single digit interest rate mortgages and longer repayment periods such as 20 years.
The proposed scheme also aims to provide 300,000 affordable homes supported by mortgages and creates 700,000 new jobs across a range of disciplines and professions.
The minister who made this known at the Annual Conference and General Meeting of the African Union for Housing Finance (AUHF) noted that with housing deficit at over 17 million, Nigeria was ripe for radical intervention in the provision of housing.
She said: “We are committed to fundamentally addressing historical challenges to housing. This requires innovative financial solutions that will stimulate housing development, related industries, create jobs across the nation and satisfy yearning for security through home ownership.”
The minister, represented by Mr. Seye Senfuye said: “Nigeria deserve to acquire affordable homes, built to a standard of good quality, located in well serviced estates that will create ideal environments in which they can raise their families, instead of being saddled with the challenges and risks of trying to build their homes organically.
“Due to the current high rates of interest, we believe that government intervention to bring down rates and enhance affordability is needed and we are committed to doing this.”
The Central Bank’s Director of Other Financial Institutions, Ahmed Abdullahi, noted that the housing market in Africa and in Nigeria is underdeveloped, and that the contribution of the market to the GDP in the country is less than one per cent, compared to the United States, which is about 80 per cent.
Abdullahi stressed the need to address absence of long-term capital that could be used to create mortgages, high cost of building materials, and problems of registering and enforcing property rights.
His words: “Mortgages are not short-term but the deposits we have in the banks are short-term liabilities, and you cannot easily use them to create mortgage. So, we need to address these challenges before we can improve the contribution of the market to the GDP.”
Originally published in The Guardian