Yinka Kolawole
6 October 2008
Against the backdrop of about 14 million housing deficit in Nigeria, requiring about N32 trillion in financing, a real estate developer has questioned the wisdom in stashing away idly over N915 billion Pension Funds.
Chief Executive Officer, Soe Properties, Mr. Olisa Ebigwe, speaking at the 3rd Nigerian Real Estate Trade Fair in Lagos recently, advocated a re-focusing of the pension policy by the Federal Government that will encourage investing the pension funds in the financing of housing for the public.
Ebigwe lamented the situation whereby over N915 billion pension funds is being kept idle, including a yearly inflow of about N15billion since the inception of the Pension Act without stimulating the housing sector to provide houses for the people.
He noted that if the dormant pension funds had been channeled towards housing financing, it would have made a lot of difference in the real estate sector and increased the housing stock in the country drastically.
The developer said that it was regrettable that bank loans are being given only to importers while real estate suffers with very few institutions ready to offer long term loans suitable for the sector. "Mortgage banks cannot execute housing financing because they have a paltry capital base of N100m," he declared.
He said that his group is ready to spearhead a push for a review of the National Housing Fund (NHF) policy that will increase loan to subscribers from the current N5 million to N10 million which, according to him, is more realistic in the face of the current economic realities.
At the moment, the NHF has disbursed N30 billion to developers in 16 years with a paltry 20,000 houses to show for it. This no doubt calls for an urgent change in policy.
In the same vein, the immediate past President of the Association of Professional Bodies of Nigeria (APBN), Mr. Olubunmi Ajayi, berated the government for not financing housing provision with the huge funds realised through the pension fund, noting that the fund remains a veritable instrument for housing provision in advanced countries because of its long term nature. Ajayi urged the government to concentrate on creating an enabling environment while making the fund accessible to housing developers to provide houses for the public.
With regard to issues affecting investment returns on housing, he called for the liberalisation and review of the Land Use Act and a second look at issues relating to titles. He said developers could not provide mass housing on borrowed funds from banks, the reason being that banks don't understand housing financing; they always prefer short-term fund.
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