FG To Embrace Mortgage System To Ensure Housing Affordability

The need to provide affordable housing for Nigerians has prompted the Federal Government to embrace the mortgage system to drive the ongoing National Housing Programme when it finally comes on stream, Minister of Power Works and Housing, Mr. Babatunde Fashola SAN, said in Abuja at the weekend.

Fashola expressed delight that the bank was already on a recovery trend after six years of loss balance sheet, hinted that government would inject fund into it to enable it to recapitalize as soon as it returned to clean books and could expand the Housing Fund under its management.

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 According to the Minister, “The new management of the Federal Mortgage Bank, still in an acting capacity, has reversed the loss balance sheet of the company and for the first time in about six years, they are returning surplus from deficit in billions; they have a surplus of about 472 Million as at Q3 from N3-4-5 billion negative position”. The Minister said embracing the mortgage system in the Housing Programme would also bring relief to the ordinary Nigerian worker as it would move the society away from the system whereby landlords demand rent in advance from tenants who receive their salaries in arrears.


Fashola told the newsmen, in response to a related question on why people who collect salaries in arrears would be expected to pay rent in advance as currently prevalent, “In our own scheme when it starts, we hope we will be in a position to issue mortgages and if you have a mortgage, clearly it can only be tied to your income which is in arrears”, adding, however, that how much progress the country could make as a nation would depend on how much love Nigerians would want to show to themselves. He declared, “So if I build a house and I know you are going to be paid at the end of December and I tell you to go and bring a rent up to 2017 that you haven’t worked for, do I really love you? So let us show the kind of nation that we want.

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What does a landlord lose if he tells the employer of his prospective tenant to guarantee deduction of the money from the man’s salary at the end of the month? If we can reach that kind of arrangements it will give a lot of people relief because that is the kind of thing that causes inflation, hiked prices”, the Minister said adding that in many parts of the world people pay their house rents when they collect their salaries.

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Noting that the advance payment of house rents fuel inflation, the Minister cited the example of a worker who has to pay N17,000 in advance to rent a room, adding, “He must be looking for all sorts of ways to make it. Anybody he too has to render service, he just gives a cut throat price and the person then passes it on”.

On the readiness of the local housing materials manufacturing and building partners to meet the nation’s housing demands, Fashola, who said government was now at the stage where letters of awards were being issued, said since there was already a design, the builders would be told that once the design was validated then they would embark on mass production using polystyrene and other locally manufactured components.

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Pointing out, however, that the typical concrete block models were being used to start with, the Minister reiterated, “Once we validate the designs then we do mass production”, adding that polystyrene models were not being used at this stage until when production was ready for industrialisation. “That is what polystyrene brings, we industrialise construction”, he said.
The Minister, who also stressed the importance of the cost and the delivery time of the houses, said the partners were being given the government designs to ascertain how fast and at what cost they could build and sell the houses with the designs adding that government could then ask them to build for it to buy on behalf of the people.


The Minister said that the Federal Mortgage Bank would then do its core job of funding demand. According to him, there was a need to address the supply side first before the Mortgage Bank would be asked to come in and do its part. He declared, “Thought out differently, if the Federal Mortgage Bank issues 100,000 mortgages to workers today, there are no 100,000 houses waiting to be bought; so we must address the supply side first.

Fashola also emphasized the need to “re-sensitize” and “re-dimension” Nigerians in terms of what should be their legitimate expectations concerning what government could do and what it should do by way of the provision of infrastructure pointing out that it would be impossible for any government to provide the entire infrastructure needed by the people.

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According to the Minister while responding to a question on how far the government in providing infrastructure support to private developers, “In cities, for example, part of the responsibilities for infrastructure like roads belong to the state governments, some belong to the local governments; and so long as we have those clearly defined responsibilities for provision of infrastructure, you can’t, in good faith, begin to encroach any body’s jurisdiction”.

So we have to understand this. What we must do is to continue to manage this kind of communication with members of the public,  he said adding that in his recent meeting with members of the Nigeria Labour Congress, he urged them to start the process of re-sensitization of ordinary Nigerian’s “so that we redimension their legitimate expectations; what they should legitimately expect in terms of what government can do and what it should do.

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Source: The News



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