Retribution may be underway for those who run afoul of National Housing Fund (NHF) Act, as some stakeholders in the housing sector have called on the policy-makers to design stiffer penalties for violators of the law.
The stakeholders made this known, recently, in Abuja, during a two-day public hearing on a motion on the need for full compliance with the Act for effective housing as part of the system geared towards addressing the huge deficit bedevilling this critical sector.
A trustee at Real Estate Development Association of Nigeria (REDAN), Oluseyi Lufadeju, accused the Central Bank of Nigeria (CBN) and some commercial banks of not making the needful impact that was required of them, saying that this had made them the violators of the Act.
Making reference to Section 5 of the NHF Act, which stipulates that commercial or merchant banks shall invest in the fund 10 per cent of their loans and advances, he said that the apex bank and the other commercial banks, glaringly, go against the law by violating this simple section.
He said: “The loan or advance will be at an interest rate of one per cent above the interest rate payable on current account by banks. Also, every registered insurance company shall invest minimum of 20 per cent of its non-life funds and 40 per cent of its life funds in real property development. Of this, not less than 50 per cent shall be paid into the fund through the Federal Mortgage Bank of Nigeria (FMBN).”
Section 11 of the NHF Act provides that the CBN shall collect from commercial and merchant banks, at the end of every year and not later than one month after, the percentage of their contribution to the fund.’’
Lufadeju, added that lack of proper finance is the major cog in the wheel of progress of the Federal Mortgage Bank of Nigeria (FMBN), saying that without proper capitalisation, FMB would find it extremely difficult to provide affordable houses to Nigerians.
“This non-compliance by the financial sector is hampering efforts to address housing deficit in the country and it should be made to be enforceable that anybody that fails to comply with the law should face stiffer penalties,’’ he insisted.
According to the Executive Partner Nord Consult, Mohammed Khalil, since the enactment of the NHF Act, commercial banks and insurance companies had not made meaningful investment as stipulated by the act, lamenting that the flagrant violation of Sections 5 (1) and 11 (1) of the NHF Act was really hampering the growth of the housing industry.
Khalil said: “Figures of loans and advances by Nigerian banks from 2011 to 2016 from the CBN amount to N67 trillion for the six-year period. At 10 per cent investment of their loans and advances into the NHF, about N6.7 trillion should have been invested in the fund by the banks over the period.”
He said that total loans and advances by the commercial and merchant banks in 2016 was N15 trillion.
“At the rate of 10 per cent, the CBN, pursuant to Section 11, is supposed to have credited the NHF with the sum of N1.5 trillion by March 2017. It follows, therefore, that at the current official figure of 17 million housing deficit, the Federal Government will require a staggering N102 trillion,’’ he said.
Khalil added that the Federal Government would require N6 trillion, if it wants to provide, at least, one million new homes through a national mortgage single digit interest rate.
Executive Secretary, National Co-operative Financing Agency of Nigeria (CFAN), Emmanuel Atama, called on policy-makers who comprise the government and regulatory bodies, alongside the relevant private agencies, to collaborate as one voice to facilitate the funding for providing houses for the teeming masses and address the huge housing deficit.
He urged the government to make provision for constant supply of loans to Nigerians for the purpose of building, purchasing and improvement of residential houses.
Hannatu Fika, Executive Secretary, Federal Government Staff Housing Loans Board (FGSHLB), said that one of the major ways in addressing the issue of housing deficit is to provide incentives for the capital market to invest in property development.
She urged the Federal Government to encourage the development of specific programmes that would provide breeding ground for effective financing of housing development, particularly low-cost housing for the poor.