The National Housing Fund was established during the Ibrahim Babaginda military junta with the aim of facilitating the mobilisation of the Fund for the provision of housing for Nigerians at affordable prices; ensure the constant supply of loans to Nigerians for the purpose of building, purchasing and improving of residential houses; provide incentives for the capital market to invest in property development and ensure the development of specific programmes that would guarantee effective financing of housing development, in particular low cost housing for low income workers. It is also to provide proper policy control over the allocation of resources and funds between the housing sector and other sectors of the Nigerian economy and provide long term lending to mortgage institutions for on lending to contributors of the Fund.
The resources of the Fund are expected from contributions by Nigerians in both the public and private sectors; investment in the Fund by commercial and merchant banks and registered insurance companies and financial contributions by the Federal Government for long term loans. Every Nigerian worker who earns up to N3,000 a year is expected to contribute 2.5 per cent of his basic monthly salary to the Fund and this is to earn interest at the rate of four per cent a year. However, over 20 years of the implementation of this Act, affordable housing has eluded Nigerians and the housing challenge is increasing by the day. The estimate is that Nigeria has a housing deficit of over 17million housing units which require N35trillion to meet; mortgages are not available and the average Nigerian will be lucky if his whole life savings will be able to afford a basic housing unit of two or three-bedroom flat. Housing is only available under a cash and carry basis and the cost is beyond the reach of the Nigerian who earns a minimum wage. Indeed, it is beyond the reach of most Nigerians who earn their honest income and refrain from being corrupt.
For over 20 years of operation, the total collections of the Fund cannot boast being in the trillion bracket. When you compare this “achievement” with the collections of the recent National Health Insurance and Pension schemes which have so far hit the trillion mark, it will be obvious that the Housing Fund has been mismanaged and has been faced with unintended and unnecessary challenges. Today, part of the advocacy by stakeholders is that some parts of pension funds should be made available to the Fund. This makes eminent sense but it is ridiculous that the Fund is now requesting the intervention of another scheme which it predated by over 15 years. The government on its part has failed to make the necessary contributions to shore up the finances of the Fund as it pays lip service to affordable housing.
Clearly, there has been no attempt to convince Nigerians of the efficacy of the Fund and move collections beyond public servants and a few others who suffer compulsory deduction from their salaries every month. It is also apparent that successive managers of the Fund in the Federal Mortgage Bank simply see themselves as undertakers to share out whatever is available and not to expand the scheme to create new contributors and enlarge the Fund. For the managers, it is an appointment for business as usual. There is no vision of a bigger picture of affordable housing for all Nigerians. Pray, has the FMBN been able to meet its vision and mission of operating as a viable, robust and dynamic mortgage institution able to meet the challenges of developing the nation’s mortgage industry and to supply the mortgage and housing markets with sustainable liquidity for the advancement of homeownership among Nigerians anchored on mortgage financing?
The credibility of the Fund is also questioned by the fact that the majority of those who have suffered compulsory deduction have not been able to access the Fund after various applications and trials. Instead of contributors getting loans, estate developers who are not contributors to the Fund have become beneficiaries of. Contribution is the qualification for becoming a beneficiary and since estate development companies are not natural persons who earn a basic income upon which they are liable to pay its 2.5 per cent, it is not right that they should reap where they did not sow. Estate developers stand disqualified by all sense of reason, law and logic. To worsen matters, they get loans and construct houses which they sell beyond the reach of the average contributor. The best way to establish credibility is to ensure that contributors benefit. That will be the best campaign and marketing strategy so that others who have not been contributing will be convinced beyond doubt of the benefits of contributing. Further, many contributors who have retired have been unable to access their refunds as stipulated by the rules.
For the legislature, attempts to amend the Land Use Act and take it away from the Constitution have met a brick wall in the current and previous constitution amendment. The governors are opposed to the amendment. This is the paradox of a democracy where the demand of the electorate for basic needs is treated with levity by the elected leaders. Governors at the state level use their bureaucracies and the consent provisions of the Land Use Act to frustrate access to land documentation for certificates of occupancy and other land related titles. Apart from the long wait occasioned by unnecessary red tapes, state governments see land titling as pure commercial money making venture as land registration costs amount to 22.2 per cent of the property cost! In the process, they shut out the bulk of the population from documentation needed to satisfy mortgage applications. The Act through its debilitating fixation on the governor’s control and legal ownership of land frustrates housing and other socio-economic development and politicizes land acquisition and ownership. Other laws that need amendment include the Federal Mortgage Bank of Nigeria Act; the laws relating to Insurance, Investment and Securities, Mortgage Institutions Act, Social Insurance Trust Fund, etc. This is in addition to new bills which need to be passed into law in the areas of Securitisation and Foreclosure. But in all these needs for amendments, reviews and new Acts, the National Assembly appears not to understand its historic duty to enact new laws to change the face of housing in Nigeria. Ministers supervising housing have not deemed it fit to push the new laws and convert the advocacy for their enactment into a national campaign for improved housing delivery. So, the status quo remains.
It is the lack of political will that holds back affordable housing and access to adequate housing for majority of Nigerians. The first step in this regard is the appointment of a minister who understands the terrain, has vision and is passionate about bringing change to the sector. The minister needs to reach out to Nigerians to seek their buy-in to proposed reforms. He should actively engage the National Assembly and other stakeholders for the amendment and enactment of new laws. Persons charged with the management of the Fund need to be given a performance contract with milestones known to all Nigerians. Finally, Nigerians who have been shortchanged by the system need to begin demands for their rights under the extant laws.
•Follow the writer on twitter @censoj