• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
AFRIPOL

AFRIPOL

en English
ar Arabiczh-CN Chinese (Simplified)nl Dutchen Englishfr Frenchde Germanit Italianpt Portugueseru Russianes Spanish
  • Home
  • About Us
  • Mission Statement
  • Articles
  • Book Review
  • Archive
  • Contact Us

Affordable Housing: From Dream to Reality

January 19, 2014 by Admin Leave a Comment

Written by Dr. Ngozi Okonjo-Iweala

Dr. Ngozi Okonjo-Iweala

Today, exactly 14 months after His Excellency convened the Housing Retreat in November 2014, President Goodluck Ebele Jonathan will launch the Nigeria Mortgage Finance Company (NMRC), signalling the beginning of a process that would finally increase opportunities for Nigerians to own their homes at an affordable price. Today’s event will also involve the reinvigoration of mass housing initiatives which will, along with the NMRC, give the housing sector the necessary fillip to start realising its great potential for the good of the country.

But it is not only individual Nigerians that will benefit from the establishment of the NMRC and the Jonathan administration’s stronger focus on mass housing. The country as a whole will also gain significantly from the unleashing of a sector which has the capacity to transform the entire economy through millions of direct and indirect jobs as well many other ancillary benefits. To appreciate the significance of this, let us consider a few facts.

Nigeria’s significant housing demand has been estimated at 17 million, with an additional 2 million units needed every year. Labour impact assessment studies in countries with similar demographics and economies as Nigeria, estimate that at least 5.62 direct jobs can be generated with every new home, and 2.48 indirect jobs in housing related expenditure. So far, our country is yet to realise this potential. In 2012, housing, construction, and real estate accounted for only 5.54% of our GDP. This figure is low in comparison to many other developing countries. Addressing the housing deficit will have a game-changing impact on our society and our communities.

Globally, there is a strong consensus that the development of the housing sector is important for stimulating economic growth and job creation in any economy. Indeed, housing construction is one of the most used indices for gauging the economic situation in most developed countries. The Case-Schiller index used to monitor housing starts in the US is a good example. Likewise, in Malaysia, one of the main contributors to the country’s 8% per annum three-decade long GDP growth was the housing and construction sectors. New home construction is a major generator of jobs through direct employment in the construction industry with significant multiplier effects on other sectors of the economy. This is the kind of potential that the launch of the NMRC and related initiatives is set to unlock.

This explains why Mr. President made housing a priority sector in the Transformation Agenda. As a practical expression of this focus, he directed in May 2012 the convening of a major presidential retreat on the housing sector that brought all stakeholders together to discuss issues of land titling and land administration foreclosure policies, access to affordable housing finance and cost of construction materials among others.  The second event was a Roundtable on Housing Finance which Mr. President instructed me to convene in November 2013. This was attended by banks, development finance institutions, private sector players, and public sector partners like the Ministry of Lands, Housing and Urban Development, and the Federal Mortgage Bank – to review and analyse the potential for housing finance in Nigeria, and see how to overcome trenchant obstacles.

A major outcome of the Roundtable was the setting up of a housing finance committee chaired by the Federal Ministry of Finance, and comprising the Federal Ministry of Lands, Housing and Urban Development, the Central Bank, Nigerian mortgage and commercial banks, supported by the World Bank and the IFC. The committee was mandated to take forward the work of developing a facility that would significantly scale-up access to affordable mortgages for the Nigerian people.

The outcome of the committee’s work was the recommendation to set up the Nigeria Mortgage Refinancing Company to significantly increase the liquidity available to mortgage organisations such as Primary Mortgage Institutions (PMIs), banks, Housing Microfinance Institutions and other financial actors.

The NMRC is a public-private sector initiative with majority shareholding by the private sector. The federal government is a sponsor and also a shareholder. It is backed by a World Bank zero interest credit of $250 million with a 40-year tenor and 10 years of grace, a very attractive facility. The NMRC will further float an additional N50 billion in bonds as soon as it is operational to which institutional and other investors can subscribe. Further bond issuances will take place in a phased manner to significantly boost NMRC’s resources and liquidity for purchase of bundled mortgage products from the PMIs and other institutions.

The launch of the NMRC and the initiative to open up the housing sector also involves efforts to improve land titling and land registration, speed up governors’ consent, improve foreclosure policies all presently impediments to the proper functioning of the Housing Sector.  Many states are active in housing development and have put in place supportive policies. However, the advent of the NMRC hugely expands the horizon of what can be achieved. As such, 14 pilot states and the FCT are working closely with the federal government on this initiative. Once they fulfill laid down criteria in putting in place appropriate policies, their citizens stand to benefit from greater access to affordable mortgages.

The Governors of Abia, Anambra, Bauchi, Bayelsa, Delta, Gombe, Kano, Kaduna Lagos, Edo, Enugu, Ondo and Ogun States and FCT have signed on to work on the Housing Initiative.

An important component to the launch of the NMRC is the development of mass housing schemes by private developers working with the Federal Mortage Bank of Nigeria and other institutions. Some of the mass housing will be done on a Rent to Own Model that will allow low income participants to rent a home over 15-20 years and own the property at the end of that period.

The new approach to the housing market is expected to result in thousands of new mortgages at low double to high single digit interest rates. This will be hinged on maintaining a stable macroeconomic environment with low single digit inflation-a feat which the country has shown over the past few months that it can achieve.

The launch of NMRC and enhanced housing initiative will have significant multiplier effects on many sectors of the economy unleashing jobs for architects, builders, plumbers, welders, carpenters, painters, interior decorators, furniture manufacturing and other allied small scale industries. We know we lack many of the skills listed above in sufficient quantity and quality and often recruit them from neighbouring countries. We must now position ourselves to train our youth for those skills. Mr. President has instructed the Federal Ministry of Lands and Housing working with private sector developers and Education Ministry to embark on this endeavour.

Nigeria stands at the cusp of a brave new initiative that has transformative powers for the individuals and families impacted as well as for the nation.  An initiative that is both social in its scope and deeply economic in its impact. It is left to us to grasp these opportunities and working together as both public and private sectors unlock an important door for our economy.

•Dr Okonjo-Iweala is the Coordinating Minister for the Economy and Minister of Finance

Filed Under: Strategic Research & Analysis

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

More to See

Ghana and Côte d’Ivoire have Declared war on the Global chocolate industry over cocoa prices (video)

March 20, 2023 By AFRIPOL

(video) I Will Never Call And Congratulate Sanwo-Olu For This Sham Of An Election – Gbadebo Rhodes-Vivour

March 19, 2023 By AFRIPOL

RSS AllAfrica News: Latest

  • Africa: VP Harris Stresses Democracy During Africa Visit
    [VOA] Accra -- On the eve of her meeting with Africa's only female head of state, Vice President Kamala Harris said Wednesday that having more women in power is a key ingredient for a healthy democracy.
  • Rwanda: Paul Rusesabagina, Who Inspired Hotel Rwanda Film, Arrives in U.S.
    [DW] Paul Rusesabagina, whose efforts to save people during the 1994 genocide inspired the Hollywood film "Hotel Rwanda," has arrived in the US following his release from a Rwandan prison.
  • Congo-Kinshasa: UN Refugee Agency in Mozambique Appeals for Help to Aid DRC Refugees
    [VOA] Maputo, Mozambique -- The representative of the U.N. refugee agency in Mozambique said refugees fleeing war-torn parts of the Democratic Republic of Congo are making an already complicated humanitarian crisis in northern Mozambique even worse.
  • Burkina Faso: Burkina Faso Banning Free Press 'Bit By Bit', Says France 24 Journalist After Broadcaster's Suspension
    [VOA] Washington -- The journalist whose interview with a terrorist organization resulted in Burkina Faso suspending France 24 has spoken with VOA about what he says is a decline in media freedoms in the country.
  • Malawi: UN Concerned About Disease in Malawi's Displacement Camps
    [VOA] Blantyre, Malawi -- The U.N. humanitarian agency says Malawi needs immediate help to deal with diseases spreading in displacement camps for Cyclone Freddy survivors. The Malawi health minister told reporters Tuesday that the government is beefing up its medical staff but a local newspaper says the country needs more money to adequately deal with […]
  • Senegal: Senegal Braces for Fresh Protests Ahead of Opposition Leader's Trial
    [RFI] Senegal's opposition coalition maintained its call for demonstrations on Wednesday and Thursday during leader Ousmane Sonko's defamation trial despite a ban on protests by police authorities.

Tags

Achebe Africa Anambra Boko Haram Buhari CBN Corona Virus Egypt Igbo IMF Inflation Jonathan Kenya Nigeria Okonjo Iweala Peter Obi Sanusi Senate Soludo South Africa Soyinka United States
  • Facebook
  • Instagram
  • Twitter
  • YouTube

Archives

Footer

Africa Political and Economic Strategic Center, AFRIPOL is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.

Recent

  • Ghana President Publicly ends Cocoa Export to Switzerland.
  • VP Kamala Harris Gives Emotional Speech After Visiting Cape Coast Castle In Ghana (video)
  • U.S Vice President Kamala Harris arrives at Ghana Jubilee House to meet President Akufo-Addo
  • US Vice President Kamala Harris arrives in Ghana for African tour (video, Pics)
  • Peter Obi exchanged views on the state of the nation with OBJ @ Anambra Airport (pics)

Search

Tags

Achebe Africa Anambra Boko Haram Buhari CBN Corona Virus Egypt Igbo IMF Inflation Jonathan Kenya Nigeria Okonjo Iweala Peter Obi Sanusi Senate Soludo South Africa Soyinka United States

Copyright © 2023 · AFRIPOL