The refusal of banks and insurance companies to comply with the laws on funding the National Housing Fund (NHF) contributed largely to its failure, the Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Ahmed Dangiwa has said.
The two sectors have failed to remit N6.7 trillion to the Fund since its inception contrary to the law setting it up, it was revealed yesterday.
The country is currently facing a housing deficit of 17 million units while FMBN is unable to meet the 720,000 housing units it is required to provide yearly to meet the Sustainable Development Goals (SDGs)
The House of Representatives has however pledged to collaborate with key stakeholders, including the private sector to achieve the 2019 government target for eight million houses.
Speaking at a public hearing on NHF bills organised by the Ahmed Kaita-led Committee on Housing, Dangiwa laid the blame of the failure of the NHF to impact on Nigerians on the doorsteps of the banks and insurance companies.
According to him, the law setting up the Fund mandated banks and insurance companies to invest in it, a law they failed to obey since inception
He said: “Available statistics from the Central Bank of Nigeria (CBN) and National Insurance Commission (NAICOM) indicated that between 2011 and 2016, total loans and advances by commercial banks and the quantum of life and non-life funds from insurance companies amounted to N66.996, trillion
“At 10 per cent investment of their loan advances with the NHF, about N6.7 trillion should have been invested in the fund by the banks and insurance companies over the period.
“In 2016 alone, alone, the CBN pursuant to 11 (1) of NHF Act, ought to have credited the Fund with N1.553 trillion by March 2017.
“At an average of N6.5million per housing unit, this amount could have provided 300 housing units in each in the 774 Local Government Areas in the country.
“The failure to make the remittance has deprived Nigerians the opportunity of owning their houses.”
In his presentation, President, Nigeria Labour Congress (NLC), Ayuba Wabba, said there must be sanctions for noncompliance with the law.
While insisting that failure of commercial banks to contribute to the fund impeded the progress of the scheme, the NLC leader said: “The major issue has been the interest rate that is now available with our commercial banks.
“This has been a serious burden and cannot be called a mortgage.
“There should be sanctions where people fail to comply with the Nigerian law. While we support the idea of penalty for offenders of the NHF Act, we do not support the scrapping of Federal Housing Scheme board.
“This is because we also used the issue of social dialogue to get funding from Federal Government. During former president Musa Yar’Adua’s administration, we got about N10b into the federal housing scheme where all the workers including the paramilitary benefited.
He said there is a need for effective fiscal policy that will enable workers to afford houses in the country
“For us to address the issue of housing deficit we must have an agreeable interest rate that both citizens and workers are able to afford.
“If not the houses will be built and not affordable.
Wabba called on the Federal Government to intervene to provide the necessary funds required to drive the housing scheme in the country”.
Earlier, Speaker Yakubu Dogara, who was represented by Depury Minority Whip, Binta Bello called for increased private sector participation in the provision of houses as part of efforts geared toward addressing the estimated 17 million housing deficit.
He further revealed that the proposed amendments would make housing laws more encompassing and introduce the necessary changes, as existing schemes have not been very successful.
“The National Housing Funds (NHF) scheme was designed to assist public servants own homes while saving a percentage of their income. The private sector employees were also captured under the Act. Similarly, the government – through mortgage institutions – is expected to provide loans to real estate developers to build low cost houses for the people.
“Unfortunately, both programmes have not yielded the desired results as Houses are still not within the reach of the generality of Nigerians. Indeed, the provisions of the National Housing Fund Act and Federal Mortgage Bank of Nigeria Act are observed more in breach by most stakeholders mandated to perform one responsibility or the other under the laws. The proposed amendments capture virtually everybody including self-employed persons.
“Let me assure you of the determination of the House to collaborate with all stakeholders in ensuring supply of safe and affordable homes and provision of viable legislative frameworks that will lead to private sector participation and ownership in order to reduce these deficits. The bills being considered today will have far reaching effects on many institutions and stakeholders and these stakeholders should pay attention to the issues and offer workable solutions.”