ADDRESS BY THE SPEAKER, HOUSE OF REPRESENTATIVES, FEDERAL REPUBLIC OF NIGERIA, RT. HON. YAKUBU DOGARA ON THE OCCASION OF THE 11TH ABUJA HOUSING SHOW ON 17TH JULY, 2017 AT THE INTERNATIONAL CONFERENCE CENTER, ABUJA.
It is my pleasure to welcome all of us to this very important and celebrated event, the 11th Abuja Housing Show, which I understand is one of the largest housing expo in the West African sub region.
2. Provision of Housing facilities is so important to our national life that the 1999 Constitution of Nigeria included it as one of the goals of the Nigerian State. Indeed, Chapter 2 of the Constitution contains the Fundamental objectives and Directive Principles of State Policy and provides in S.16 (1)(d) that: “The State shall direct its policy towards ensuring – (d) that suitable and adequate shelter.. are provided for all citizens”.
3. It is estimated that Nigeria required about 17 million houses to bridge the deficit. This is why, the House of Representatives made housing a cardinal part of its Legislative Agenda (2015-2019). It provides in item 6 (h) for a Legislative Initiative on Housing, Urban Development, Mortgages: ‘The House will seek to tackle housing challenges in the country by legislative action and through appropriate budgetary interventions that seeks to create mass housing and provide access to mortgage finance. In addition, the House will hold regular dialogue sessions with critical stakeholders to articulate appropriate legislative intervention that will address this problem’.
4. It further provides for Legislative Initiative on New Cities and Regional Hubs of Development: ‘The House shall through legislative action and working in concert with the Executive institute a process of establishing regional hubs of development in each of the six geo-political zones of the country. Under this concept, legislative action and support will be given to identify and create at least one large and expansive area provided with 21st century infrastructure that creates a modern city equipped with basic infrastructure, fast rail, mono-rail, communications, ICT, etc. In this direction, a legal framework that actively involves private sector participation will be put in place and necessary amendments to relevant existing laws introduced’.
5. Successive Nigerian governments had made concerted efforts in housing delivery intervention through various policies and programmes either as a provider, facilitator and enabler. Government has created many institutions and frameworks to address acute shortage of housing in Nigeria. These instructions include the Federal Mortgage Bank (FMB) the Federal Housing Authority, including the creation of a Federal Ministry responsible for housing. The Federal Mortgage Banks Act Section 5 explained that the functions of the Mortgage Bank shall be to: (a) provide long-term credit facilities to mortgage institutions in Nigeria at such rates and such terms as may be determined by the Board in accordance with the policy directed by the Federal Government, being rates and terms designed to enable the mortgage institutions to grant comparable facilities to Nigerian individuals desiring to acquire houses of their own;
(b) license and encourage the emergence and growth of the required number of viable secondary mortgage institutions to service the need of housing delivery in all parts of Nigeria” How far have these institutions faired in solving Nigeria’s housing problems?
6. In spite of the introduction of these institutions especially the FMB the biggest problem with mortgages in Nigeria has remained lack of long-term money this is because unless you are the government, it is difficult to find anyone to lend you money for the 20 – 30 years that is required for a typical mortgage. This is why recently, the Federal Government introduced Nigeria Mortgage Refinance Company (NMRC) involving the private sector to solve this problem. The idea of NMRC is for government to provide a guarantee to the NMRC and own only 20%. “So even though it is not owned by government, private investors can be confident that if anything or everything goes wrong, the government will step in to keep the show on the road. The effect of this is that the investors can confidently invest in a lower risk and long-term vehicle for the sole purpose of increasing the number of mortgages and houses in Nigeria”, as explained by the promoters.
6. It was further claimed that “The NMRC will solve this problem by making long-term money available to the banks to lend to the public as mortgages. First of all, the World Bank has given the government a $275m loan at zero percent interest for 40 years. Then it is also raising N6bn in equity from private investors. This is before it goes to the bond markets to raise around N50bn at roughly 12% interest. You can already see that when you combine these various sources of funding, the interest rates on mortgages in Nigeria will come down significantly from the current 18-24% range”.
7. To provide affordable housing to Nigerians will also require lowering the cost of building materials. It is in this regard that we should not relent in research, development and education to improve building methods and cost effective locally produced building materials. I understand that the National Building and Road Research Institute has recorded some successes in the development of cost effective building technologies and materials. We should patronise and encourage others to do more. Happily we are becoming self sufficient in cement production but the prices should come down to encourage Nigerians to build houses.
8. Indeed, there is no gain saying that decent and affordable housing in Nigeria has become a luxury that vast majority of Nigerians cannot afford. This should not be the case as housing remains one of the basic necessities of life which governments all over the world strives to ensure that it is a right that citizens must enjoy.
9. In 2006, a new draft housing policy was released with the aim of ensuring that Nigerians own or have access to decent, safe and healthy housing accommodation at affordable cost. However, suffice it to say that in all of these, no meaningful achievement has yet been recorded. Sadly, the housing gap keeps widening yearly as the population increases.
10. While I urge the federal and states government to be pragmatic in addressing Nigeria’s housing shortfalls, the National Assembly has a major role to play to enhance access to decent and affordable housing.
This I can assure you that we shall look into it before the expiration of the 8th National Assembly. I will repeat for emphasis that a comprehensive legislation to deal with how mortgages are processed and accessed in Nigeria have become necessary. We must design a mortgage system that captures those in the informal sector of the economy where majority of Nigerian operate. We need to take advantage of the newly signed laws: The Secured Transactions in Movable Assets Act, 2017 (also called Collateral Registry Act) and the Credit Reporting Act, 2017 to reach the ordinary Nigerian who do not have very significant collaterals often demanded by banks. The new laws have the capacity to deepen the financing sector, creating a wider pool of assets that can be utilised as collateral for loans or other obligations required to be collaterised.
11. May I use this opportunity to charge and challenge all the professionals gathered here who are involved in housing issues, such as builders, architects, town planners, quantity surveyors, engineers, legal practitioners, real estate developers, home financiers, home interior practitioners, etc to provide us with a draft bill of the type of legislation required to solve the problem of housing shortages in Nigeria including your views of the amendment of all existing laws including the Land Use Act , that requires constitutional amendment.
12. With these few remarks, may I therefore formally declare the 11th Abuja Housing Show open and wish us all a successful outing.
13. Thank you all and may God bless you and bless the Federal Republic of Nigeria.