The Nation Newspaper

Tag: affordable

  • Affordable housing: The way out

    As the continent’s largest economy, international development experts, innovators and funders believe Nigeria is better positioned to provide a market-driven solution to one of the continent’s most significant challenges – affordable housing. Assistant Editor OKWY IROEGBU-CHIKEZIE writes

    Executive Director, Policy and Strategy, Nigerian Mortgage Refinancing Company (NMRC), Dr. Chii Akporji, has  listed some of the challenges militating against the robust growth of the housing sector in Nigeria to include: a challenging macroeconomic environment with high-interest rates and inflation; cumbersome land titling and property registration procedures; lack of a foreclosure mechanism and a dearth of long-term finance for mortgage origination business.

    Other factors, according to him, are a dearth of affordable housing stock and poor mortgage literacy levels.

    As a key player in the sector, the NMRC, according to him, is driving several ongoing efforts to de-risk the sector, in collaboration with some housing sector stakeholders, such as the Central Bank of Nigeria (CBN), state governments, Mortgage Banking Association of Nigeria (MBAN), the Federal Mortgage Bank of Nigeria (FMBN), Family Homes Fund (FHF) and major developers.

    He said: “The NMRC is a private sector-driven mortgage refinance company with the public purpose of developing the primary and secondary mortgage markets, through raising long-term funds from the capital market, and leverage this to refinance qualifying mortgage portfolios of mortgage lending institutions, thereby promoting affordable home ownership through mortgages.”

    While affordable home ownership enabled through cost-effective and accessible mortgages are long-term objectives of the NMRC, Akporji believes that their work is beginning to gain traction by utilising platforms for dialogues such as the forthcoming West Africa Property Investment Summit (WAPI).

    “WAPI is a convening platform for all stakeholders along the housing value chain, on a sub-regional level. By virtue of its reach, it remains the go to event for networking and knowledge sharing on trends and development in the real estate and construction industry on the continent,”she added

    Arguably one of the most strident and recognisable voices in her field, Akporji confirmed that she would be joined by NMRC’s new Managing Director/Chief Executive, Kehinde Ogundimu, who will also be participating in panel sessions that revolve around affordable housing and financing during the two-day, 500 people gathering.

    Also joining Akporji on the top-level session to explore one of the most complex tasks that have bedevilled policymakers, will be international speakers such as Feyi Borrofice from the World Bank Group, United States, and the International Finance Corporation’s Ifeoma Ezeokafor. Forming a stellar panel, the three will discuss how best to mobilise private and public-sector institutional development financing for affordable housing.

    While the topic is complex and layered, Akporji believed that the solutions can be addressed if “we distinguish between private and the public-sector focuses and challenges”.

    She added  that for the private sector, “the focus obviously will be on the bottom line, but there could be a win-win partnership solution, especially with the leveraging of alternative building technologies and green construction methods to not only deliver affordable housing at scale, but also positively impact the bottom line”.

    Akporji pointed to the ongoing reforms and evolution of the roles of both the public and private sector along the housing value chain, which the NMRC, working with its partners is helping to achieve.

    On land reforms she said: “State government partners are beginning to review their existing land and titling processes since they recognise its criticality to attracting investment in housing in the state and the importance of housing not only to citizens well-being, but also for augmenting internally generated revenues. The NMRC has signed MOUs with a number of these states for the adoption and passage of a draft Model Mortgage and Foreclosure Law.”

    On the readiness of the states, she stated that Kaduna State is the first state to pass the NMRC law and is already reaping the benefits, which include increased investment in the sector, enhanced ranking on the ease of doing business index, a reduced mortgage interest rate deal with a lending bank and mobilisation of development finance.

    She further noted that Lagos State has amended an existing law alongside the MMFL, following signing of an MOU with NMRC and remains the national leader in robust hosing policy, innovation and investment while other states are in the process of doing same.

    To the host of WAPI, Kfir Rusin, providing such a high-level focus on affordable housing is a recognition of the value of cracking the affordable housing code.  He said: “Africa’s future is urban. A recent World Bank report predicts that more than 1 billion Africans will live in cities by 2050; making it home to eight of the world’s fastest growing metropolises. Lagos, as one of the fastest growing of all, is set to double in size from 21 million to more than 40 million. In such a rapidly urbanising environment, we believe that aiding private and public-sector stakeholders in cracking the affordable housing code is a social imperative and arguably real estate’s biggest opportunity.”

  • ‘Lagos govt is committed to affordable housing delivery’

    ‘Lagos govt is committed to affordable housing delivery’

    The Lagos State government has concluded plans to deliver 20,000 housing units in the next three years. This is aside the 4,355 housing units that have been commissioned across the three senatorial districts in the state. This, according to the government, will reduce the housing deficit gap and improve Lagosians‘ access of to affordable housing.

    This was the submission of Governor Akinwunmi Ambode last week at the celebration of the World Habitat Day in Lagos. The governor, who was represented by his deputy, Mrs. Idiat Adebule, said the effort was connected to the overall objective of making the state liveable, especially its urban renewal and slum upgrading/regeneration.

    According to the Ambode, this year’s celebration, themed: “Housing Policies: Affordable Homes,” is an integral part of the “Lagos @ 50” celebration to showcase the administration’s achievements in regeneration and urbanisation of the state.

    He further stressed that with this year’s theme, the United Nations (UN) was calling the attention of governments around the world to the need to make housing within the reach of the common man.

    “Shelter is one of the basic needs of man. The challenge before us is to explore innovative ways by which this can be achieved through public private part Wcontent in the construction of houses, ensure efficiency in land utilisation, as well as develop a financing system that is convenient, reasonable and economical,” the governor noted.

    He said his administration’s position on affordable housing has been demonstrated through the Rent-to-Own scheme and Rental Housing Initiative, which are specifically designed with the low income and middle income earners in mind. Under both schemes, Ambode said, apart from reducing the initial deposit requirement from 30 per cent to five per cent, a larger proportion of 80 per cent of the total stock of housing units under this programme is dedicated to the Rent–to-Own scheme, which is targeted at the low income group.

    He listed some of the projects the state is implementing under this include the redevelopment of Adeniji Adele Phase I-V, comprising 720 housing unit, into a residential mixed use development of 2, 500 – 3, 500 housing units and the redevelopment of Isale Gangan Phase I leading to the construction of 11–floor structure, which comprised 48 serviced luxury apartments. The second phase of this project, planned to be a 13-floor structure, is under construction.

    “As we strive to provide the enabling environment for investment in the housing sector, we are open to new ideas, new technology and new methods, the private sector remains our key partner in ensuring the delivery of decent, functional and affordable housing in the quantity that will match the increasing demand across the state,” Ambode remarked.

    Commissioner for Physical Planning and Urban Development, Mr. Anifowoshe Abiola, said making housing available and within the reach of the common man is one of the most critical issues in the socio-economic well-being of the people. This, he explained, is the reason the ministry is ready to partner more than ever before, with all stakeholders in the built environment in order to realise and bridge the gap of the housing stock deficit.

    The guest speaker at the event, Mr. Fola Arthur-Worrey, maintained that the citizens have a responsibility of paying their taxes to make the implementation housing policies and actualising same to happen. He advised that people should have a clear cut idea of what they intend to use a house for before embarking on its ownership because owning a house is not necessarily a must.

    “The reality is that majority of people cannot afford a home by themselves, hence, the reason for informal houses,” Arthur-Worrey said, while urging government to intervene in the unhealthy relationship between landlords and tenants, especially as it concerns incessant increase in rent.

    Commissioner for Housing, Mr. Gbolahan Lawal, argued that to make houses affordable, there is a need to scale up the income of the citizens. He also advised the Federal Government to reduce interest rate on mortgage so that transaction cost will be reduced and that more people can come into the mortgage net.

    In a similar vein, the UN Habitat programme manager in Nigeria, Kabir Yari, commended the state for consistently hosting the World Habitat Day and for being the only state in the country to be doing so.

    He said affordable housing is a challenge that has made a lot of Africans live in slums, including about 60 per cent of the population living in informal settlements without water. He disclosed that this year’s Habitat Day is used by the UN to reflect on the state of towns and cities, and on the basic right of all to adequate shelter.

    “Housing policies: Affordable homes, promotes one of UN-Habitat’s focal areas such as inclusive housing and social services. A safe and healthy living environment for all. The UN Sustainable Development Goals (SDG) number 11 target is that by 2030, everybody should live in safe and affordable houses; I have no doubt that Lagos State will continue to do the right thing,” Yari submitted.

  • NRMC, Alpha Mead sign MoU on affordable housing

    To improve access to affordable homes and deepen the  mortgage market, the Nigeria Mortgage Refinance Company (NMRC) and Alpha Mead Development Company (AMDC), a subsidiary of Alpha Mead Group, in Abuja, have signed a Memorandum of Understanding (MoU).

    The  deal will allow AMDC and NMRC to work together on housing finance, training, research, advisory and project structuring to increase the stock of affordable housing in the country.

    It will also provide and permit technical support and advice to Alpha Mead in the  residential part of the estate market.

    It will make it easier and faster for customers pre-qualified by AMDC to access mortgage from the member- financial institutions of the NMRC.

    NMRC Managing Director/CEO Prof. Charles Inyangete described the MoU as remarkable.

    He explained that the NMRC decided to partner Alpha Mead because of its innovative and technology-driven approach to increase affordable housing stock in Nigeria and to leverage its expertise in facilities management which he believes will come in handy to maintain the projects after construction.

    “The combination of these capacities that Alpha Mead bring to the partnership will give the market the assurance that property prices can be sustained, going forward; and we can all deliver to the specific needs of the customers,” he said.

    Besides, he said the mortgage refinance firm chose the partnership because of the desire to see the Alpha Mead model succeed.

    This, Inyangete said, is because of the firm’s believe that the model will allow for increased transactions in the housing development value chain and providing its member institutions with more projects to finance.

    The Group Managing Director of Alpha Mead, Femi Akintunde, expressed delight at the partnership, which he described as a great demonstration of NMRC’s commitment to reduce housing deficit; and recognised Alpha Mead’s innovative approach to delivering quality and affordable housing to Nigerians.

    “It is becoming obvious that the conventional building methods cannot bridge Nigerian housing gap, especially in the face of the myriad of challenges that face the affordable housing value chain. So, what we bring to the market are the possibilities of addressing the challenges of affordability and quality; which are two critical issues that are inhibiting the nation’s affordable housing market,” Akintunde said.

    He noted that the structure of the market makes is a tall order for people in the middle-income bracket to own homes because of the high entry barrier.

    He listed other challenges as lack of skilled artisans,  high cost of building materials, and lack of standardised building and quality processes, which all combine to have adverse effects on the quality of building in the market.

    “So, on the one hand, we are addressing the issue of quality by using technology that guarantees repeated quality, straight edges and structural integrity; and on the other hand, we are addressing the challenges of affordability by using our technology to achieve up to 15 per cent savings for our customers,” Akintunde explained.

  • Internet’ll be made affordable for young people, says minister

    The Minister of Communications, Mr Adebayo Shittu, has charged the youth to leverage the Internet to boost their innovative and entrepreneurial skills.

    The minister spoke to a group of Internet enthusiasts at the yearly Nigerian Internet Business Conference (NIBC) organised by Lukmon Fasasi, a blogger and student of Obafemi Awolowo University (OAU) in Ile-Ife, Osun State.

    The event held at the Nigerian Institute of Social and Economic Research (NISER) in Ibadan, the Oyo State capital.

    Shittu, represented by Mr Akeem Yussuf, his Special Assistant on Digital and Optimisation, said he was delighted by the courage of the participants to improve their entrepreneurial skills by learning about internet business.

    He said: “The Internet has offered young people opportunities to get themselves engaged in various legitimate businesses. There are thousands of internet businesses that young people can start today, with little capital. We will continue to make Internet affordable and create platform for the growth of Information and Communication Technology (ICT), so that young people can leverage the Internet to harness their entrepreneurial potential.”

    The event was graced by notable ICT and Internet business experts, including Depanker Rustagi, Anyinoluwa Akinyemi, Aderonke Bamidele, Aisha Raufu, Ayeni Ekundayo, Nollywood actor Yomi Fabiyi, and many others.

    Rustagi, an Indian and Chief Executive Officer of Vconnect, spoke on how young people could build a business network online. He gave the participants tips for conducting successful businesses on the Internet and how they could engage new customers.

    The event featured interactive session, during which the participants had opportunity to engage the facilitators in discussions about creating sustainable employment through Internet businesses.

    According to the organiser, the aim of the event was to bring Internet enthusiasts across the country together, with the objective to create values and bring development to the country’s Internet business.

    Lukmon said: “This is the third edition and NIBC has come to stay. What matters in the 21st century is how young people should use the Internet to maneuver their life goals.”

    Uthman Samad, an OAU student, described the event as an “eye-opener”, saying: “I am fortunate to attend this conference, because I have learnt how to create job for myself through the Internet.”

    The Publicity Secretary for the conference, Kabir Adejumo, said: “Through our researches, we want to let the youth know that, no matter their level of education or social status, they can earn good income through legitimate Internet business. A recent statistics showed that, there are almost four billion people on the internet daily. This means that, if anyone has an Internet-enabled phone, he has all he needs to make ends meet at his fingertips.”

    The conference was attended by students from OAU, University of Ibadan (UI), University of Lagos (UNILAG), Federal University of Agriculture, Makurdi (FUAM), Benue State, and Ladoke Akintola University of Technology (LAUETCH), among others.

  • Affordable housing: private initiative to the rescue

    Affordable housing: private initiative to the rescue

    With growing population, a lingering housing deficit and government’s continued inability to provide affordable housing in practical sense, a multinational has seized the initiative to provide technical support, materials, and connect  mortgage providers with prospective house owners, among  others. MUYIWA LUCAS reports that the initiative is part of the firm’s global plan, which will benefit 25 million households, with Nigeria benefitting substantially. 

    It is not a new piece of information that Nigeria’s population is increasing geometrically. But several studies conducted by the United Nations on Nigeria’s population showed that come 2050, there will be 400 million people in Nigeria, is frightening. This projection means that the country would have overtaken the United States (US) in another 32 years from now, as the 3rd most populous country in the world.

    In similar vein, the World Bank projected that Nigeria’s population is growing at 2.8 per cent rate yearly, while her per urban population grows at 4.7 per cent as a result of the rise in rural-urban migration. This growth rate is, however, disproportional with staggered attempts at bridging the housing deficit by both the public and private sector in the country.

    To experts and other stakeholders in the real estate and construction industry, these studies represent a timely warning for the country’s built environment, especially with regards to providing affordable housing in a country where a deficit of 17 million housing exists. This fear may not be unfounded given that population explosion comes with an attendant need for housing. Stakeholders and policy makers have put Nigeria’s financial requirement to tackle the deficit at N59.5 trillion.

    A 2010 report commissioned by EFInA and Finmark Trust, titled: “Overview of Housing Finance Sector in Nigeria”, submitted that 85 per cent of the urban population live in rented accommodation, spending more than 40 per cent of their income on rent. Of these rented houses, 90 per cent are built through self financing by the owner, mainly due to lack of mortgage financing while less than five per cent of these houses have formal title registration.

    The lack of an efficient and effective mortgage financing has remained a huge albatross on the country, irrespective of the various government efforts in this direction. This is why only a tenth of the one million homes built yearly, has helped to tackle the deficit over a period of 10 years. Most of these, findings revealed, are by persons who contend with deficient financing, shoddy workmanship and poor building materials, among others.

    The low income category seem to be the most hit in Nigeria’s housing debacle. For a Nigerian aspiring to build an affordable home with about N3 million, there are enough challenges to induce headaches, which either frustrate the ambition or force the project to be abandoned. These include access to finance, which is the major source of worry; others are delays in project completion, taking between two to five years; lack of access to qualified building professionals without cut-throat charges as professional fee; mortgages focusing on the high end market; inconsistent quality of building materials; bureaucratic building approval process and the high cost of acquiring land and its tenure issues.

    A former Minister of Lands, Housing and Urban Development, Mrs. Akon Eyakenyi, acknowledged that affordable housing delivery for the low and middle income earners cannot be achieved without the provision of incentives to encourage private sector participation.

    “To build a house in Nigeria is a very expensive task due to the high cost of building materials. Affordable housing cannot, therefore, be achieved without a drastic reduction in the cost of housing construction and other associated costs, which invariably determine the selling price. Consequently, for affordability to thrive, emphasis must shift to reducing the cost of housing construction to promote access to affordable homes to the vulnerable segment of our national population,” Mrs Eyakenyihad said at a pre-summit meeting on the Nigeria housing and construction summit/expo, in 2014.

    She then called on the organised private sector, manufacturing outfits, finance houses and multilateral agencies to support the drive for affordable housing delivery.

    Eyakenyi’s call has not fallen on deaf ears, as the private sector has taken up the challenge of housing in the country. This has again made for a silver lining to appear on the horizon for Nigerians desirous of owning their affordable houses.

    For instance, Lafarge Africa has put in place an initiative, which it calls “Easy Home”, an innovative affordable housing initiative, which is already providing innovative solutions for the construction, renovation and extension of houses. The scheme is tailored to the local challenges and needs of individual home builders, including Nigerians, who already own their land and want to build. Through the initiative, LafargeHolcim Group, hopes to impact about 25 million people by 2020 and Nigeria is expected to benefit from a significant chunk of the scheme.

    Lafarge Africa Head of Affordable Housing initiative, Mr. Aurelien Boyer, explained that if the associated challenges to affordable house ownership are addressed, Nigerians could build more houses faster. This, he said, was what the firm set out to do with the Easy Home scheme. “The whole idea is to provide individuals with free technical expertise and demystify the idea of owning a home. Lafarge Africa provides free cost estimate i.e. Bill of Quantity and designs for prospective builders. We also connect them with sources of finance as well as artisans that will build at the least possible cost without compromising quality,” Boyer explained.

    The Easy Home initiative, which began three years ago, has impacted positively on over 30,000 persons across 14 states of Lagos, Ogun, Oyo, Kwara, Ondo, Benin, Osun, Nasarawa, Niger, Cross River, Abia, Akwa Ibom, Rivers and Abuja. Beneficiaries of the scheme include Business people, civil servants and salary earners, who have used “Easy Home’s” menu of free services to build bungalows, duplexes, self-contained apartments, shops, schools, clinics etc.

    “The demand for housing outstrips supply in the low-income segment where most live in rented houses. Presently, 5,000 households in mainly urban and peri-urban households earning N20,000 to N300,000 monthly have keyed into the Easy Home scheme. We, as Lafarge, estimates that nine million households can afford to build their property incrementally. Through Easy Home, Lafarge Africa is contributing to the reduction of the national housing deficit and helping to accommodate a large chunk of Nigeria’s population,” Boyer explained.

    A consultant architect with a leading construction firm, Mr. Richard Ibilola, has praised the initiative. Easy Home, he said, will have a very significant and positive impact on the spread of good construction practices and the deepen building and construction supervision skills in Nigeria. For him, EasyHome will make it easier for Nigerians to step on the home acquisition ladder because it is designed to take significant initial costs burden away from house owners, and at the same time boosts the development of skills in the ecosystem.

    A financial analyst with vast experience in mortgage matters, Mr. Kayode Oyedele, who explained that given the format of the initiative and having had a first hand experience of the scheme as a financial advisor to some beneficiaries, praised the initiators of the scheme. According to him, it is a delight that the Easy Home scheme is changing the perception of mortgage financing and affordable housing schemes in the country.

    “This should be encouraged. More programmes like this will happen in Nigeria only when there’s a mortgage system, which allows for the repayment of loans to acquire houses spread over 15-25 years. Such will give developers and banks an incentive to develop massive residential projects. Regulators will also find it much easier to monitor and punish builders responsible for defects,”Oyedele said.

    To many of its beneficiaries, Easy Home is a huge relief. A pharmacist, Mrs.Ejiro Foyinbo, extolled the concept. She said the provision of free technical assistance, links to trusted builders, reliable retailers and qualified artisans, which the scheme afforded her, has helped to maximise her budget.

    But this is not Lafarge Africa’sfirst intervention in affordable housing programmes. The firm, in collaboration with the French Development Agency (AFD) and LAPO microfinance, have long invested N1.3 billion to provide affordable housing in the country under its “Ile Irorun” affordable housing initiative, which started in October 2013. It was the firm’s first operation launched in the frame of AFD and Lafarge partnership to improve housing conditions through microfinance in Africa.

    The “Ile Irorun”, was intended to enable low-income families to finance the construction, extension or the renovation of their houses and thereby help them improve their living conditions. In all, an estimated 3,500 Nigerians are expected to have benefitted from the programme by end of this year.

    In 2015, Lafarge Holcim also unveiled a self-contained studio-flat at its Oregun, Ikeja, Lagos office, as a model for affordable housing for the low and middle income earners. The feat served as the bedrock for the firm’s planned delivery of a 500-unit of low cost housing in Gwagwalada, Abuja. The types being provided in this scheme include two and three-bedroom flats and studio types. Its prices range from N1.5million for studio model, while others are between N4million and N6million.

    Stakeholders are convinced that the initiative is capable of bringing succour to the numerous Nigerians, who are daily losing hope of owning houses.

  • Stakeholders ask architects for practical, affordable blueprints on slums

    Architects  need to redefine themselves within the community in which they live. They need to rethink their relevance in serving the citizenry of Lagos as it is. They need to think ‘Out of the Box’ to ensure that Lagos slum areas are included in the designed built-environment, otherwise, regeneration of true Nigerian Architecture will be impossible and extinction becomes imminent.”

    This was the submission of participants and stakeholders in the architecture industry at the just concluded Lagos Architects Forum 2017 tagged: LAF 8.0. It held at the Jasmine and Zinnia Halls, Expo Centre of the Eko Hotel & Suites, Victoria Island, Lagos. An estimated 2,300 participants from the building construction sector, other industries and parts of the country attended the event.

    The theme of the conference,  “Lagos 8.0 – An Architectural Autopoiesis,” focused on the issues of regeneration, rebuilding, recreating and re-inventing the built environment in general and addressing housing challenges in particular in the light of the present economic recession in the country.

    In a communique at the end of the forum, architects were urged to reposition themselves and their profession as the driver of the new revolution. This should be with a view to moving the state to a new pedestal that will solve the myriad of housing challenges being faced by the low income groups, and indeed the slum areas of the state.

    Given the prevailing economic challenges in the country, stakeholders  also urged architects not to only serve the elite, who can afford to pay for their services, but  extend their services to the low and middle income citizens, who constitute more than 70 per cent of the populace. Engaging in this, it is believed, will have collateral advantages of being more relevant to the society, help in reducing the slums and blighted areas and in the long run, create suitable jobs for architects.

    Participants at the conference also admonished architects to be in the vanguard of leading advocacy to form lasting policies that affect the built environment and its current challenges, as the issue of homelessness remains an embarrassment to the nation and indeed the megacity of Lagos State. Architects were also urged to think “out of the box” in producing practical and affordable blueprints that had scientific and empirical data basis in solving the ‘Nigerian Problem’ in a contextual way.

    Stakeholders at the conference also had words for the government: Government needs to ensure that well trained, qualified and registered relevant professionals, architects, engineers and planners were deployed for the task of enforcing efficient  control systems for vetting, processing and approval of design drawings,  ahead.

    The communique also noted the continuous exponential increase in Lagos State population and the challenges of land for development matter and called on the government to muster all political will for the provision of real affordable and sustainable housing for the vulnerable, the poor and the low income citizenry.

    The communique further held that in view of the on-going economic recession and the astronomical increase in the cost of imported building materials, stakeholders in the construction and built environment were urged to engage more pro-actively in the research and development of local building materials, such as  bamboo for structural work and lateritic clay soil for stabilised bricks on a commercial basis. This, they said, is necessary, as no housing solution can be sustainable on the current or floating foreign exchange rates.

    Earlier in her keynote address at the conference, a former Provost, College of Medicine and Deputy Vice-Chancellor (Development) University of Lagos, Prof. Sade Ogunsola, who spoke on the topic:“AnArchitectural Autopoiesis- the Linkage of the built environment to non-living social autopoietic systems”, said autopoietic systems included second level social systems made up of societies, organisations and interactions. “They reproduce themselves from within themselves, a recursive reproduction of its elements through its elements, meaning that architects as part of non-living autopoietic systems have no option but to reorganise themselves irrespective of their different school of thoughts,” she explained.

    Ogunsola said from various extrapolation, Lagos will have a population of 300 million people by 2050 and become the third largest city in the world by then. Given this situation, she said what should be of concern is how architects plan to cope with these large numbers, especially as 70 per cent of the population live in the slums.

    “Architects are, therefore, by implication, responding to only 30 per cent of the population and in reality only a third of this number. If architects do not regenerate themselves and attend to the 70 per cent of Lagosians who require decent and healthy shelter even within their present existing environment, they would have failed in the autopoietic social system in which they operate,” she submitted.

  • Financing affordable housing for the people

    FINANCING reasonably priced housing for the populace has, over the years, engaged the attention of most countries, especially the developing ones. It is one of the three most important basic needs of mankind, the others being food and clothing. Expectedly, programmes of assistance in the areas of finance, provision of infrastructure and research have been designed by governments (both the Federal and the states) to enhance adequate housing delivery.

    The focus on finance has, however, been very prominent because housing provision requires huge capital outlay, which often is beyond the capacity of the medium income/low income groups and therefore needs interventions from either government or private investors.

    It was therefore commendable when the Minister of Finance, Kemi Adeosun, unveiled Federal Government’s commitment to creating opportunities for Nigerians to have their own homes. She has continued to emphasise in every forum the level of priority government gives to financing affordable housing for the people. The minister used the opportunity presented at the World Bank Spring Meetings held last month in Washington DC, where she met with representatives from International Finance Institutions and discussed Nigeria’s agenda to deliver affordable housing.

    For her, mortgage financing is critical to the achievement of Nigeria’s agenda and remains one of the priority pillars for current government’s implementation. Nigeria has an estimated housing deficit of 17 million units, and with an estimated increase of 900,000 annually. Some of the reasons for this are clear. Firstly, interest rates are high for both developers and home buyers, and the tenure of debt remains too short. As a result, the country has to find a way to accelerate the financing of affordable homes. That prompted the Federal Ministry of Finance to establish the Family Homes Fund.

    A request of N100 billion has been made from the 2017 budget and for the subsequent three years as part of the Medium Term Expenditure Framework (MTEF). “It is a seed funding from the government, but this is not solely a public sector scheme. It will be a partnership with the private sector and we are looking to mobilise additional resources from domestic and external sources to make the project a success,” she said. The Family Homes Fund will enable the Federal Government to deliver discounted mortgages for home owners, while also enabling access to attractive financing mechanisms for developers.

    “We are piloting in six states and the results of those pilots will guide long-term programme implementation,” she added. The Minister also conducted series of meetings on the implementation of some of the critical projects in the Economic Recovery and Growth Plan including meetings on Housing, Water, Power and Food Security.

    “Many of these projects are already well advanced and we have had a series of productive meetings in Washington with development partners to advance those projects and hopefully accelerate implementation, so we can meet the ambitious but achievable goals we have set ourselves,” Adeosun said. It was in recognition of the critical importance of finance in housing delivery that the Federal Mortgage Bank of Nigeria (FMBN) is also working hard to achieve efficient and sustainable credit delivery to the housing sector.

    The country cannot boast of economic prosperity without providing housing or creating a suitable environment for its people to secure reasonably priced housing. For Nigeria, the housing deficit is huge enough to stimulate government’s action. But it is interesting that government has seen the need to make mortgage financing more attractive for stimulating growth.

    Stakeholders believe that bridging the housing deficit will create millions of jobs and help the economy wriggle out of recession. Statistics showed that Nigeria is a peculiar country, where mortgage finance, as a share of Gross Domestic Product (GDP), is extremely low.

    At a paltry 0.5 per cent, compared with 80 per cent (UK), 77 per cent (USA), 31 per cent (South Africa) and two per cent (Ghana), it is a huge joke. The housing and construction sector accounts for only 3.1 per cent of Nigeria’s rebased Gross Domestic Product (GDP). Housing production is 100,000 units per year while 800,000 units are needed yearly. As a result of the lack of a robust mortgage financing system, Nigeria’s rate of home ownership is one of the lowest in Africa at 25 per cent.

    Statistics showed that Nigeria’s home ownership rate is much lower than countries, such as Singapore (90 per cent), Indonesia (84 per cent), Kenya (73 per cent), USA (70 per cent), Benin Republic (63 per cent) and South Africa (56 per cent).

    The introduction of Family Homes Fund by the Federal Ministry of Finance was expected to help the country wriggle out of rising housing deficits. The fund, an innovative private sector-driven financing solution was meant to bridge the rising housing deficits in the country. Mortgages under the scheme will be provided through Primary Mortgage Institutions and refinanced by the Nigeria Mortgage Refinance Company (NMRC). Interest rate of 9.99 per cent is applicable to the first N2.5 million only.

    The scheme has a target to achieve at least 40 per cent of its total housing stock at N7.5 million or less and will bridge the affordability gap by providing long tenor mortgages at single digit rates of interest to qualifying first time home buyers within targeted household income thresholds. “The aim of the programme is to channel funds from savers to borrowers, so that builders have the required capital to construct and prospective buyers can access credit to purchase homes. Ultimately, the Fund aims to accelerate the development of the domestic mortgage industry such that the scheme will become entirely private sector driven in the medium to long term.

    The Fund will also actively promote local content, thereby supporting the extensive value chain across the local construction industry and creating jobs,” a report on the Fund’s website said. The Fund operates as a Public Private Partnership (PPP) and targets to raise N1 trillion, starting with N500 billion. It will be structured as a Real Estate Investment Trust (REIT) and will be professionally managed to stimulate funds from the private sector, pension funds, insurance funds, multilateral agencies, and impact investors. The blended pool of long term funds will be channeled towards providing financing for affordable housing development and mortgages to Nigerians.

    Besides, the Fund aims to enable developers deliver family homes priced from N2.5 million, extending up to N18 million, delivered in a ‘ready to occupy’ condition, with essential services such as water and power connected. The Fund will equally attract low cost local and international capital, including domestic pension and insurance funds, to complement Federal Government funding. The blended pool of funds will be channeled towards lending to qualifying private sector developers and equity participation in developments. Experts in mortgage financing say that the scheme is a vehicle set up to bridge the funding cost of residential mortgages and promoting the availability and affordability of good housing to working Nigerians by providing mortgage lending banks with increased access to liquidity and longer terms funds in the mortgage market. •Odion, a mortgage financing consultant, lives in Port Harcourt.

  • Anchor varsity is affordable for average family

    Anchor varsity is affordable for average family

    Unlike other faith-based tertiary institutions, the fees of Anchor University will be affordable for members of its founding organisation – the Deeper Life Bible Church, its Assistant Registrar for Communication and Strategy, Okesola Sanusi, has
    said.
    He made this known last weekend during a visit to The Nation’s corporate headquarters in Lagos.
    He said the university was not established to make profit but to promote human transformation and eradicate decandence in the society.
    Sanusi was accompanied by Mr Ikechukwu Moagua, the Personal Assistant to the Vice-Chancellor, and Oyewale Omolara, an Administrative Assistant.
    He said the institution was set up with the mission to revolutionise the nation’s education, with the aim of transforming lives of the youth and making them good leaders. He added that the university would churn out graduates that would have the fear of God and make positive changes in the society.
    He said: “Anchor University is set up with the objective to restore discipline, piety and excellence in the nation’s education. Beyond issuing certificates based on character and learning, Anchor University will go extra length to award students certificates on integrity, which is the other part of character.
    “Among the faith-based universities, we are proud to say that Anchor University is about the most affordable. Our fees are the most reasonable and I can assure you that average members of the Deeper Life Bible Church and the public can afford to send their children to the institution. Our fees are not as outrageous as fees charged in other private school.”
    Through promotion of cutting-edge research and quality knowledge, Sanusi said the university, which took off in February, aimed to be among the top five tertiary institutions in the country in the next 10 years, noting that the quality of knowledge to be imparted on students would not be compromised.
    He said the academic activities in the institution would be governed by the adherence to the teachings of the Bible, adding that students are required to comply with the school rules on social engagements. He said the school was not established for Christian children only, but opened for people of other faiths.
    He said: “The university campus is not a regimented environment, where students are not free to hold opinions. We give our students freedom to associate in line with Biblical teachings. We don’t regard smoking and drinking alcohol as social activities. We have brilliant social programmes for our students, which are aimed at developing their creativity and skills beyond academic performance. This is what we regard as social event, not people engaging in acts of immorality.”
    The institution took off with three faculties and 15 courses, which have passed through pre-accreditation.

  • Expert advises govt, others on ‘affordable homes’

    The construction and mortgage sectors must collaborate more effectively to deliver affordable homes, an estate surveyor and valuer, Mr Emmanuel Okoli, has said.

    Okoli, the president of Osita Okoli and Company,  wants industry operatives to pledge their support for “Family Homes Fund,”  a newly-introduced private sector-driven financing solution to housing challenges by the Federal Government.

    It is aimed at financing mortgages for low-income earners under its social housing programme, by raising about N1trillion. The fund is aimed at delivering solutions to alleviate the country’s affordable housing crisis.

    “In the face of all the odds, there is need for industry professionals to strive to lend their expertise to the Family Homes Fund, or any other such innovative, so that as a united property industry, we can tap into these ground-breaking initiatives to put an end to rising homelessness in our country,” Okoli said.

    On the spate of construction mishaps in the country, he said enforcement of the revised National Building Code (NBC) imbued with specific punishment for culprits in case of collapsed building, was the only way out. Not punishing culprits involved in such incidents sends the wrong message to the public and the industry.

    For instance, Okoli regrets that two years after, nobody has been found culpable in the unfortunate incident of the collapse of the roof of the indoor hall of the sports complex of the U.J Esuene Stadium in Calabar, and also a church building which collapsed during a Sunday service in the same state.

    Stressing the need for a collective effort to ensure the implementation of the Code, which he believes will arrest the national embarassment often caused by the increasing cases of the built environment failures and the near dominance and take-over of the industry by quacks, Okoli warned that the consequences of an ineffective and non-operational NBC in social and economic terms are too monumental for any sane society to ignore.

    The NBC was published in 2006 to put a stop to the unpalatable trends in the building construction industry, eliminate or reduce to the barest minimum the growing incidences of collapsed building in the country, as well as promote safe, qualitative housing for every Nigeria

    In order to meet with new trends and innovations in the sector, the building code is expected to be reviewed every three years. But unfortunately, several efforts to revise it to meet new challenges had met a brick-wall until the recent efforts of the Federal Ministry of Lands, Housing and Urban Development.

    Okoli is also worried about the poor state of infrastructure in the country. To stem this trend, he wants a declaration of a state of emergency in the infrastructure sector and the establishment of an Infrastructure Development Fund (IDF). He said they were essential to get the country out of its huge infrastructure deficit.

    Although he noted that the country has completed the development of a National Integrated Infrastructure Master Plan (NIIMP), its implementation will require tens of trillions of naira, making him to urge the National Assembly to pass appropriate legislation establishing the IDF and the implementation of the NIIMP.

    Seeking an amendment to the Company and Allied Matters Act that requires companies to contribute three to five per cent of their pre-tax profit to the IDF, Okoli described the infrastructural deficit as large and affecting every sector, adding that investments in the road sector alone requires at least the construction of 18,000 km of new roads annually for the next seven years.

    “Good infrastructure is critical to the overall development of the Nigerian economy, which in turn, impacts the standard of living of Nigerians. The government alone cannot fund the huge portfolio alone due to its limited financial resources and against the backdrop of current global financial tightening and increased competition for available infrastructure funds, so all hands must be on deck to achieve it,” Okoli submitted.

  • ‘FMBN, REDAN, Shelter Afrique to create $2b affordable housing fund’

    ‘FMBN, REDAN, Shelter Afrique to create $2b affordable housing fund’

    Some stakeholders have agreed to pool resources to tackle the housing problem headlong. This is by ensuring  improved access to credit facility and reducing development costs for low-income housing.

    The Federal Mortgage Bank of Nigeria (FMBN), Real Estate Developers Association of Nigeria (REDAN) and a pan-African finance institution, Shelter Afrique have joined forces to create a $2 billion affordable housing fund.

    The money, will be disbursed at $200 million yearly to developers, to help in financing the construction of a targeted 10,000 homes over the next decade.

    Activities to be generated from the construction works are expected to  create more than 150,000 jobs.

    “We agreed that we needed to bring in Shelter Afrique to work in partnership with REDAN to make available some funds over the next 10 years by providing REDAN members with the necessary construction finance that is required to drive the national housing model,” the Acting Managing Director of FMBN, Richard Esri, explained.

    Recently, the Federal Government announced it would waive an initial 10 per cent payment on mortgages below N5 million or $15,700, being administered by the FMBN. This is targeted at future homeowners planning to take out mortgages in the low-to-mid price range. According to the Centre for Affordable Housing in Africa, the average cost of a mortgage is $18,000, with interest rates at around 19 per cent as of last September. This move comes on the heels of the establishment of the Family Homes Fund by the government, last September.

    Aside from helping to develop more houses, the injection of the $2 billion fund is to keep mortgage rates in affordable housing schemes at well under the average 23 per cent, with a target of 9.99 per cent and payable over 20 years. Under this arrangement, prospective buyers are required to make an initial deposit of 10 per cent of the house value to qualify for these home loans; 70 per cent of the mortgages are expected to go to houses priced between N2.5m ($7, 900) and N4.5m ($20,000).

    Financed through the Sovereign Wealth Fund, Federal Government bonds and Bank of New York, the scheme will work as a public-private partnership (PPP). It is also expected to promote the development of primary mortgage institutions, which tend to have a narrow banking licence and are generally reliant on wholesale funding, making them more vulnerable in times of financial or economic crisis.

    These changes will come as welcome news to many Nigerians, with half of the population living on less than $1 a day. Furthermore, the minimum wage is currently around $60 per month, meaning home ownership is often out of reach for those in the low- to middle-income wage bracket.

    The Centre for Affordable Home Financing in Africa reports that a standard mid-level apartment in an urban area in the country can cost as much as $100,000, with rent averaging around $5, 000 a year; the situation has kept home-ownership rate at 25 per cent.

    Meanwhile, the mortgage penetration rate stands at about 0.6 per cent of gross domestic product (GDP).  The World Bank data which although is low by standards in more developed economies, puts Nigeria roughly in line with many other large African markets. The report also attributed low mortgage uptake to lack of awareness and cost, as high interest rates can make mortgages too expensive for middle-and low-income earners.

    According to the Oxford Business Group, a global research and consultancy company with a presence in over 35 countries, including the Middle East, Africa and Asia to the Americas, in order to begin filling Nigeria’s existing deficit of 17 million housing units as projected by the World Bank and to meet the increase in demand, the government will need to support the construction of 170,000 units per year over the next decade. With almost half of the country’s 170 million population residing in cities and urbanisation growing at an annual rate of 3.75 per cent, demand for affordable houses is also set to remain strong.