FG To Launch New Single Digit Long Term Housing Finance Initiative | Independent Newspapers Limited
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FG To Launch New Single Digit Long Term Housing Finance Initiative

Posted: Sep 21, 2016 at 8:40 pm   /   by   /   comments (0)

By Nkasiobi Oluikpe.

As a way of curbing the increasing housing deficit, the Federal Government is set to launch a new long term housing finance initiative with the provision of single digit interest rate.

The Minister of Finance, Kemi Adeosun, disclosed this at the just concluded Annual Conference and General Meeting of the African Union for Housing Finance (AUHF), adding that with a housing deficit presently at over 17million, Nigeria was ripe for radical intervention in the provision of housing.

According to the minister, the proposed scheme which aims at providing 300,000 affordable homes supported by mortgages will have a longer repayment period of up to 20 years, and will also create about 700,000 new jobs across a range of disciplines and professions.

Adeosun revealed that the Federal Government is committed to fundamentally addressing historical challenges to housing which, she said require innovative financial solutions that will stimulate housing developments, related industries, create jobs across the nation and satisfy yearnings for security through home ownership.

The minister, who was represented by her special adviser, Seye Senfuye, noted that Nigerians 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 from the scratch.

“Due to the current high interest rates, we believe that government intervention to bring down rates and enhance affordability is needed and we are committed to doing this”, she said

On his part, the Central Bank of Nigeria (CBN) Director of Other Financial Institutions, Ahmed Abdullahi said that the housing market in Africa and in Nigeria is underdeveloped, and that the contributions of the market to the Gross Domestic Product (GPD) in the country is less than one per cent, compared to the United States, which is about 80 per cent.

“There is a 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.

“Mortgage facilities are not short-term, but the deposits we have in the banks are short-term liabilities, and you cannot easily use them to create mortgages. So, we need to address these challenges before we can improve the contribution of the market to the GDP.”

Managing Director, Nigeria Mortgage Refinance Company (NMRC) and AUHF Board member, Prof Charles Inyangete expressed concern over the affordable housing crisis in Africa.

“We need to address both affordability and accessibility together. The extent of inequality created by the crisis of affordable housing on the African continent is too high a price to pay and we must find solutions to providing access to sustainable affordable housing finance”, he said

He emphasised that any solution to affordable housing has to maintain the dignity of the members of the community; hence, there is a need to build homes that are durable and will last a long time.

Inyangete insisted that a well functioning housing market can be a vital economic sector and a potential source of job creation.

“NMRC is responding to its vision to be the dominant housing partner in Nigeria, by providing liquidity and access to affordable housing finance”, he said

For Regional Lead, Sub-Saharan Africa Financial Institutions Group, International Finance Corporation (IFC), Mr. Thierno Habib-Hann, housing finance in Africa offers numerous opportunities for investment, which is good for households, construction industry, financial sector and economy.

Continuing, Habib-Hann stated that housing finance is a long-term commitment while an enabling environment is fundamental for many emerging markets to create unrivalled opportunities; and operators he said should use a critical mix of investment and advisory services to achieve sustainable operations and increase affordability.