Understanding the power of housing mortgage, one may have to take some time to read through the Americas GI Bill of 1944.
Read this, officially the Servicemen’s Readjustment Act of 1944, the G.I. Bill was created to help veterans of World War II. It established hospitals, made low-interest mortgages available and granted stipends covering tuition and expenses for veterans attending college or trade schools. From 1944 to 1949, nearly 9 million veterans received close to $4 billion from the bill’s unemployment compensation program.
Now, my article will pay attention to the low interest mortgage, cum funding housing programs for retirees. This same model could be extended to all other deserving Nigerians.
As the WWII was raging, America was busy thinking on how to provide care to her millions of Veterans returning from Europe. Making this possible can only come by providing shelter to a man who may have lost his sense of dignity due to what he may have encountered at the war front. Providing an affordable home, just on return from the war, will not only restore dignity but will chart a way to prosperity moving forward.
This singular legislation brought about a new prosperity to America. The bill, though technically disenfranchised the African America Vets, was not in its whole bad, but hugely beneficial to those that could access its gains.
The Nigerian situation is a war situation and a GI Legislation is needed to salvage the precarious situation of the Nigerian housing ecosystem and the economy at large.
GETTING THE MORTGAGE RIGHT
Similar bill like the GI Legislation must not be enacted by the Federal Government. State authorities can customize mortgage support bills to carter for the well-being of her retiring workers. 35 years of active service is sufficient for a serious government to plan for the housing retirement of her workers.
This should be a funding, via mortgage institutions, to support home ownership for retiring state workers. Nothing banishes poverty than housing and real estate. The only challenge in Nigeria housing system is the provision of long-term mortgage loans to deserving workers.
Taking a cue, Nigerian State Governors and Presidents should prepare for their workers just from the day they were employed to work. For instance, President Franklin Roosevelt was focused on what he wanted and was really determined to do better for the returning veterans from WWII. He understood the Times and Need. He wanted to expand the middle class and help prevent economic turmoil. He started preparing for the veterans return well in advance of the end of the war.
Nigeria is estimated, in 2013, to be in need of 17 million homes. 2013 to 2022 is 9 years. There is no evident of implementable mortgage support system to the Nigerian people to cover the 17 million gap in this 9 years.
The 17 million number is not about the luxury developments which can be afforded by the very rich. It is about the low and middle class workers who can afford N5m -N10m, with the support of government, to own decent homes.
A government with over 20,000 workers but builds only 50 exotic houses in a year for a select workers cannot be serious.
In Nigeria, some state governments and state agencies already established Mortgage Banks, example Lagos State and Nigerian Police. The question remains, what has these mortgage banks done to alleviate the housing pains of her workers? They won’t do much because it is not about having mortgage houses but to have the capacity to provide mortgage liquidity that can assist workers access long term mortgage support, especially the fact that these agency’s banks still have to go to the Federal Mortgage Bank (FMB) to access the funds for their own mortgage applicants. The incompetency of the FMB, in turn frustrates the efforts.
A GLIMPSE OF HOPE
In 2013, the then Finance Minister, Dr Ngozi Okonji Iwuala, now the DG of the World Bank, kicked off and birthed the Nigeria Mortgage Refinance Corporation (NMRC). A wonderful idea that is now dying under the weight of nepotism and incompetence.
The mission of the NMRC, on her website is, to remove barriers to home ownership, provide liquidity, affordability, accessibility and stability to the housing market in Nigeria. If a 30% of these lofty ideals are delivered in the last 9 years, surely the Nigerian housing crises would have been scaled down to the barest minimum.
Furthermore, the NMRC is a private sector driven company with the public purpose of bridging 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. This says it all.
Regrettably, this hope in NMRC is diminishing with her abysmal performance of raising just N29B and disbursing just N20B in her existence of 9 years.
CONCRETE STEPS URGENTLY NEEDED
Nigerian government should work, by all means possible, to further capitalize the NMRC. Why sharing $330M recovered Abacha Loot to traders at N10, 000 each? What’s that for? If the government can borrow $15B from China for some skewed project appropriation, local and private sectors in Nigeria can be approached, through bond-raising to finance the NMRC to the position it can properly deliver on her set goals.
Government should focus on mass and affordable homes that should not cost more than N5m per unit. This is the mass housing idea. As an established Real Estate developer, I am aware that a good 3 bedroom apartment can be built with N4m on a government provided land. Even state governments can easily do this for her workers, especially for those from Level 12 grades. Doing this will move a whole lot of workers into the house owner category at same time making more rentable apartments available for the lower grades at cheaper rates. The economic ripple effect can only be imagined.
Providing re-finance funding to workers through the mortgage institution, which in turn will provide long term mortgage funds is what is needed to catapult 17 million Nigerians out of poverty to wealth and prosperity.
State governments can raise huge re financing funds by issuing bonds to the markets, both local and foreign, specifically for this purpose. Its not rocket science. Its simple logic
Think about it, if 17 million persons in a nation become home owners within a 5 year plan, the narrative of Nigeria being the poverty capital of the world will change to a wealthy nation. END
