The federal government has disclosed plans to float a National housing bond for real estate developers to address housing deficit in the country.
Speaking during the housing investment forum in Abuja on Tuesday, Patience Oniha, director general of Debt Management Office, noted that despite the multi faceted approach by government at all levels to address housing deficit, access to affordable housing has remained an issue of concern.
According to her, factors including relatively high population growth rate, procedures for land acquisition and development, inadequate funding and access to funding as well as high cost of building have continued to challenge the effort towards provision of adequate housing infrastructure in Nigeria.
She said, “Provision of affordable housing has been at the front burner but it has not been addressed. Governments at the Federal and state levels have over the years enacted legislations, created institutions, licensed and actually built houses. These have not translated to adequate housing.
“The funding options to consider at this point include; the existing structures and funding options such as the 30-year mortgage possible, with a sovereign 30-year FGN broadband refinancing offered by Nigerian mortgage refinancing company.
“The other option is the National housing bond for private sector housing developers.”
Speaking further, the DG explained that with the NHB, the Federal government can access large capital from markets at a lower rate.
She explained that the deficit in the housing sector needs to be bridged with emphasis on affordable housing.
Babatunde Raji Fashola, Minister of Works and Housing, commending the efforts of relevant agencies towards addressing the nation’s housing deficit, said that Nigeria currently needs a plan that is workable, accessible and sustainable to finance the housing deficit.
According to him, the ministry is willing to float the bond under a public-private- partnership.
“What we need now is a plan that is workable, accessible and sustainable to finance the housing deficit in Nigeria and to build the real housing economy that creates jobs and a sustainable career path,” he said.
Ahmed Dangiwa, managing director, Federal Mortgage Bank of Nigeria, in his remark said that the current reality in the housing finance sector demands a radical redirection towards creating a sustainable funding source.
“We have realised long ago that the kind of funding we require and desire can only be gotten through a handshake with the capital market,” he said.
“There are a number of challenges we faced through FMBN issuance of N100 billion mortgage backed bonds for the acquisition of federal government houses allocated to civil servants as a result of the monetization policy in 2007.
“Lessons from that endeavour must shop and guide our steps towards a successful outing for the National housing bond,” he said.
Zainab Ahmed , Minister of Finance, Budget and National planning, noted that Nigeria’s housing challenge presents itself in two forms, including the issue of new housing supply to meet the growing population and urban migration and renewing substandard housing which do not meet established standards.
Representing the Minister, the MD of family home fund, Femi Adewole said that the proposed bond strategy would enhance access to housing finance and particularly deepen the participation of capital market in housing finance.
“This objective of deepening the capital market in housing finance, recognises the fact that in the face of competing priorities, the government alone cannot meet the financial requirements of the housing market.
“It is in this regard that the ministry of finance, budget and National planning welcome the idea of national housing bond being proposed.
“National housing bonds in their various forms have delivered housing finance systems in several countries,” she said.