The Federal Mortgage Bank of Nigeria (FMBN) has blamed banks and insurance companies for non-compliance with provisions of the National Housing Fund (NHF) Act since its inception.
The FMBN Managing Director, Mr Ahmed Dangiwa spoke on Tuesday in Abuja at a public hearing on “A Motion on the Need to Ensure Full Compliance with the NHF Act for effective housing delivery in Nigeria’’.
The public hearing was organised by the House of Representatives Committee on Housing, held at the National Assembly.
The News Agency of Nigeria (NAN) reports that the NHF is a pool which mobilises long-term funds from Nigerian workers, banks, insurance companies and Federal Government to advance loans at a single digit interest rate to its contributors.
The NHF was established by Decree No. 3 of 1992 (Now NHF Act Cap N45, LFN 2004).
Presenting a memorandum on the motion, Dangiwa stated that banks and insurance companies in Nigeria were required to be investing in the NHF scheme, but unfortunately they defaulted.
Dangiwa said that unless these provisions of the act were complied with, the pool of funds available for mortgage financing at affordable interest rate would continue to be inadequate.
“This means that the FMBN will be unable to make low interest mortgages available to Nigerians as the 2.5 per cent workers monthly contribution is grossly inadequate, especially that of the medium income earners’’.
He said that the Central Bank of Nigeria (CBN), and the National Insurance Companies statistics indicated that between 2011 and 2016, total loans and advances by commercial banks and non-life and life funds from insurance companies amounted to N66.996 trillion.
“At 10 per cent investment of their loan advances and non-life and life insurance with the NHF, about N6.7 trillion should have been invested in the fund by the banks and insurance companies over the period.
“In 2016 alone, the CBN pursuant to section 11 (1) of NHF Act ought to have credited the fund with the sum of N1.553 trillion by March 2017.’’
NAN reports that section 11 (1) of NHF Act states that “CBN shall collate funds from commercial and merchant banks at the end of every year and not later than one month thereafter, the percentage of their contribution of the fund as specified.
He explained that at an average of N6.5 million per housing unit, the amount could have provided 300 units in each of the 774 Local Government in the country.
According to him, the failure to make the remittances has deprived Nigerians the opportunity of owning houses.
He said the NHF Act CAP N45 was passed into law with laudable objectives but the implementation of the Act since inception had not made much impact, adding that the public hearing was long overdue.
Commending the 8thNational Assembly for organising the public hearing, and appealed for effort at ensuring that compliance with the provisions of the act would make impact to the government.
Earlier, Mr Ahmad Kaita, the Chairman, House Committee on Housing stated that measures listed for consideration in the public hearing would open more sources of funding for the bank to become more efficient.
Kaita said that the committee, in line with the legislative agenda of the House of Representatives had recognised the need to provide required legal and legislative frameworks to ensure affordable housing for Nigerians.
“This initiative is also in accordance with the provisions of Section 16 of the Constitution of the Federal Republic of Nigeria 1999, that the state shall direct policy toward ensuring that suitable shelter is provided for citizens.