The Federal Government of Nigeria is making provisions for mortgages at single digit interest rates as it plans to unveil a new housing finance initiative soon.
This intent was revealed at the 32nd Annual Conference and General Meeting of the African Union for Housing Finance (AUHF) which was held in Abuja. The Minister of Finance, Kemi Adeosun asserted that the initiative to finance housing projects is aimed at the construction of over 300,000 affordable houses in Nigeria through mortgage financing and also the creation of 700,000 new jobs in the housing sector.
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The minister explained that in a bid to support the development and growth of mortgage institutions in the country, the Government is considering putting in place a foreclosure law that would accelerate legal processes for dispute resolution. She emphasized the need to put in place monetary policies to support low interest rates by finance institutions “as a means of boosting activities in the mortgage industry”, adding that the federal Government is committed to bringing down the current high interest rate.
Represented by Mr. Seye Senfuye, the Minister said: “We are committed to fundamentally addressing historical challenges to housing. This requires innovative financial solutions that will stimulate housing development, related industries, create jobs across the nation and satisfy yearning for security through home ownership. Nigeria deserves to acquire affordable homes, built to a standard of good quality, located in well serviced estates that will create ideal environments in which they can raise their families, instead of being saddled with the challenges and risks of trying to build their homes organically. Due to the current high rates of interest, we believe that Government intervention to bring down rates and enhance affordability is needed and we are committed to doing this.”
Also speaking at the event was the Minister of Power, Works and Housing who was represented by Mrs Eucharia Alozie the Director, Public Private Partnership (PPP) in the ministry who asserted that the Government is aware that provision of leverage are critical to attracting private sector funds to the real estate industry, which would in turn go a long way in creating thousands of affordable houses yearly and generating employment and commercial activities.
In the same vein, the Governor of Central Bank of Nigeria. Mr Godwin Emefiele, represented by Dr Ahmed Abdullahi, the CBN director, remarked that the development of Nigeria’s’ housing market plays a major part in boosting the gross domestic product of the country. He noted that the housing sector currently contributes less than one percent to the nation’s GDP while the housing market in the United States represents 80 percent of the country’s GDP. He lamented that Nigeria was lagging behind in comparison with other African housing markets and a change ought to be made quickly.
The African Union for Housing Finance (AUHF) is a 55-member association of mortgage banks, building societies, housing corporations and similar organisations working on the mobilization of funds for shelter and housing in Africa as a whole.