Our Stand (88) –
Abuja - August 23 - (Viewpoint Housing News) – Fact is that, housing is capital intensive. A combination of low wages ventures and high cost of living gives millions of Nigerians little room to save towards purchasing or building their homes. For Nigeria to properly house its citizens, greater efforts need to be made to bolster access to affordable housing finance that will enable them own their homes. The coming of Arc. Ahmed Dangiwa as the Minister of Housing and Urban Development is an excellent choice by President Bola Tinubu.
When making appointments and besides merit, the chief criteria employed is past records and achievements, not ruling out what areas an appointee has excelled in.
A prominent feature that has become glaring in successive governments’ ministerial appointments in Nigeria, is having an appointee head an establishment that he or she has little or no experience to preside over.
Experience which is the culmination of lessons learnt, offers the opportunity to make better decisions for the future. Not just gaining experience in an endeavour is paramount but, how well a performance was, is also critical.
In the past, we have seen some ministerial appointments that already had failure written all over it before they even got to know the personnel they would work with. Why? It is either because the antecedent of the appointee does not merit his recent portfolio or the appointee is starkly a novice that would rely on the existing personnel around before he can commence work. The implication of what this entails will result to slow pace of work.
Previously, we had seen an engineer with little or very limited exposure to sports activities asked to go manage the affairs of the Sports Ministry that is supposed to be handled by a retired athlete that excelled in the area of sports. The lack of expertise of such will hinder the growth of the sector.
The news of the nomination and appointment of Arc. Dangiwa as the Minister of Housing and Urban Development was unianimously welcome by stakeholders in the housing industry and even those beyond the sector, because of his experience in the housing industry.
Dangiwa, former Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), can already boast of the right newtwork to build with that can accelerate the growth of the housing sector from where it is. Going by his past achievements with the FMBN, the kind of policies he created and implemented, confirms his recent appointment as a prime illustration of ‘a square peg in a square hole’.
His expertise as an architect and his experience as the immediate head of the FMBN make him a perfect fit to tackle housing problems in the country.
It is hoped that housing, a sector acutely inseparable from the growth of man, national development and security, will benefit from the administration of Arc. Dangiwa as the Minister of Housing and Urban Development. It is believed that he is coming with innovative ideas on providing affordable housing to Nigerians and how to tackle the challenges faced.
His experience as the then head of FMBN, saw the ressucitating of a sector that had faced challenges, best described as insurmountable. His assupmtion of office in 2017 came with revolutionary moves that has in positive ways improved housing in the country from what it used to be.
From our previous reports of the FMBN, his administration provided over 9,000 houses, including provision of mortgages worth more than N110bn in his time as the Managing Director of the FMBN.
Having being appointed the MD of FMBN in 2017, he said some supervisions carried out in his first months in office, of several projects in diverse areas across the country, made him realise the enoumous housing deficits in the country.
In a report gotten from one of the dailies, Dangiwa said he understands the reason many are reluctant to go for a mortgage option in addressing their housing needs.
He said a civil servant cannot sacrifice 30 percent equity for a house, similar to what most commercial banks offer. So, he came up with drastic policies.
“We had to reduce the equity to 10 percent for a house that one has to buy for N10 million. The equity for houses between N5-10 million was reduced to 10 percent. But any mortgage that is below 5 percent is 0 percent, which means they don’t pay any equity. With that I was able to get more mortgages for Nigerians, especially the low and middle-income earners, and some in the informal sector”, he said.
“Most of the houses I met were those built by developers, who sourced their funding basically from open markets at high-interest rates and high cost of land, other costs which majorly increases the cost of houses.”
In addressing the issue of affordability, especially among civil servants, he said “we had to enhance our construction panels in such a way that you will have to provide construction panels for developers, to give them affordable interest rates to create affordable houses and then we give mortgages.”
His administration improved the “Rent to Own” scheme that encouraged subscribers nationwide to approach the bank at its state offices to have access to houses as tenants. This is an initiative that encourages tenants of these houses to pay either monthly or annually till they become owners.
Aside an insurance scheme he brought to the mortgage sector, Dangiwa encouraged the use of Certificates of Occupancy (C of O) for lands. His administration also saw an increase in the provision of housing loans to Nigerian workers under the National Housing Fund (NHF).
Increased transparency in his administration saw the surge of workers contributing 2.5% of their monthly wages to the NHF scheme and it rose above five million, expanding the pool of finance available to the FMBN.
Notably, the bank pooled a total of N134 billion from the NHF within three years, with N121 billion in loan approvals. This implied an average of N44 billion in total contributions per year! The difference is stark when compared to total collections of N232 billion between 1992 and 2016 at a yearly average of N9.6bn.
His administration spearheaded the bank’s N500bn recapitalisation drive to boost its capacity to create affordable mortgages which was welcome by the houisng stakeholders. This should be sustained.
These improvements and others, recorded while he was the Managing Director of the bank is testament to the high expectations that came with his appointment as the new Housing and Urban Development Minister.
As the new minister, he should strengthen institutions that are into affordable housing provision and consider giving Estate Development Loans (EDL) to developers at considerable percentage, so that constructions done by these developers will be more affordable for low and middles income earners.
One of the areas the new housing minister is advised to consider, is to find ways of bridging the gap between private developers and funds available for developing housing in the country. The federal government has initiatives, through the FMBN, the Family Homes Funds (FHF), and others where funds are provided but, they are not as accessible as they ought to for private developers.
He should watch closely the value-chain that comes with housing construction and delivery because there are a lot of bottlenecks in the process. The new minister should look into the government social housing programmes to reflect the realities of what the low and middle income earners are facing as a result of the fuel subsidy removal.
He is expected to address the myriad of issues threatening the housing sector and synergise with the private sector.