By Abimbola Johnson
FROM 1956 when it started as the Nigerian Building Society until 1977 when it transformed to the Federal Mortgage Bank of Nigeria or the promulgation of the Mortgage Institutions Act (1989) and the FMBN Act 82 (1993), in 1994, when the FMBN was accorded the status of the apex mortgage institution in the country, Nigeria’s housing deficit has never been more daunting than now.
Unlike many other countries with similar challenges, an estimated 80percent (or over 130 million) of Nigerians live in indecent, informal housing structures with no basic amenities and in deplorable conditions. Only few own the house that they live in. The housing deficit of Nigeria, according to the World Bank, is estimated at a whopping 17 million units. In densely populated commercial and urban centres like Lagos, Abuja, Port Harcourt and Kano, squatters outnumber those decently accommodated. The same World Bank, puts the cost of the 17 million housing deficit at about N59.5trillion. Yet another informed stakeholder: a two-time member of the House of Representatives, who was also Minister of Sports and now President of the Association of Professional Bodies in Nigeria, Bala Ka’oje only last Monday, tasked the Muhammadu Buhari administration to make available to the FMBN a bailout fund of N100bn (one hundred billion naira) as well as “overhaul and restructure the Federal Mortgage Bank of Nigeria (FMBN) for effective housing delivery”.
Already the restructuring of FMBN is on-going and the new team headed by its Managing Director, Mr. Richard Esin is not leaving any stone unturned. If snippets from the team’s activities are anything to go by, it seems the burden on the supervising Minister for Hosuing, Mr. Babatunde Raji Fashola, would be less in the way they are strategically addressing the challenges of housing deficit inherited by this administration.
While it cannot be denied that funding is a major challenge of the housing sector, it requires leadership, the right policy and its effective implementation, as well and sincere and efficient deployment of resources to bridge the housing deficit in the country.
There is no gainsaying that the provision of housing transcends the mere provision of shelter. It facilitates urban development and at the same time promotes the socio-economic well-being of a people especially when tailored towards the attainment of home ownership.
Shelter is not only a basic need of life, housing is the right of every woman, man, youth and child to acquire and a desideratum for sustaining a secure home, family life and community and to live in peace and dignity. The right to housing is codified as a human right in the Universal Declaration of Human Rights:
“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” (Article 25(1))
Affordable housing is housing for which the associated financial costs are at a level that does not threaten other basic needs. States should therefore take steps to ensure that housing costs are proportionate to overall income levels, establish subsidies for those unable to acquire affordable housing, and protect tenants against unreasonable rent increases. Nigeria is a peculiar country where mortgage finance (as a share of GDP) is extremely low. At a paltry 0.5 per cent, compared with 80 per cent (UK), 77 per cent (USA), 31 per cent (South Africa) and 2 per cent (Ghana), it is a huge joke. The housing and construction sector account for only 3.1 per cent of Nigeria’s rebased GDP. Housing production is at approximately 100,000 units per year while 800,000 units are needed yearly.
As a result of this lack of a robust mortgage financing system, Nigeria’s rate of home ownership is one of the lowest in Africa at 25 per cent. Statistics show that Nigeria’s homeownership rate is much lower than countries like Singapore (90 per cent), Indonesia (84 per cent), Kenya (73 per cent), USA (70 per cent), Benin Republic (63 per cent) and South Africa (56 per cent).
In addition to these obstacles to home ownership, Nigerians face daily battles with poverty, unemployment, low human development index (HDI), low access to clean water and improved sanitation and incessant power outages. A large percentage of Nigerians are unbanked as only about 40% of the adult population is financially included. One is therefore gratified about the current restructuring of the FMBN, embarked upon in that sector by Buhari when he brought in Mr. Richard Esin. A man of few words, he has accepted the responsibility to deliver on the mandate of the bank and carry forward the modest achievements of his predecessors.
A snapshot into his four months’ stewardship can be gleaned from his account at the ongoing 15th Lagos Housing Fair. Speaking through Mr. Yusuf Yinusa, the Lagos Zonal Coordinator of the bank, he reported how the National Housing Fund, NHF, has hit N191.9billion in March from 4.14 million registered contributors under scheme.
Esin also said that N5.9billion had been refunded to 118,284 individuals who met conditions for refund, while over 70 per cent of the cumulative collection was recorded in the last five years.
Section 14(2) of the NHF Act of 1992 stipulates that a contributor to the NHF can access a loan from the fund for the purpose of building, purchasing or renovation of existing homes /houses. If this is made truly compassionate, with security and opportunity at its heart, the nation will be inching towards affordable shelter. As Nigerians look forward to the concessionary loan windows promised by Esin to enable them access mortgages for home ownership at affordable interest rates, it is laudable that the NHF managed by the bank has financed the construction of about 25,606 housing units and advanced 16,506 mortgage loans.
While disbursements are pending, according to the Acting MD, for the delivery of additional 15,085 housing units and 10,726 mortgage loans, the bank has already entered into partnership with the Federal Housing Authority (FHA); Assets Management Company of Nigeria (AMCON) and state governments to ensure that the challenges of lack of access to land, inadequate funding for the housing sector, inaccessibility of mortgage loans due to lack of proper title to properties, low income of prospective borrowers which affects affordability, cumbersome procedures for obtaining governors’ consent to land transactions which is also costly, are addressed.