The Director, of Greenstem Group and Former President, Mortgage Banking Association of Nigeria, Adeniyi Akinlusi in this interview with Festus Adebayo speaks about challenges in the housing sector and areas that which housing reforms can be achieved by the new administration.
What are the areas in housing reforms that should be achieved by the new administration?
When we talk about housing, we must answer the basic question which is what is a house? A house must consist of Land, approved design, construct the house on the land, infrastructure must be available like access roads, water, and power, and a house without those is not livable. These are areas begging for reforms.
There are lots of policies in this regard that need to be domesticated. For example, policy addressing the issue of quality like the housing building code. However, the problem always lies in the implementation, if we can implement at least 20% that would go a long way
Another critical aspect is the issue of the cost of building, with the current economic situation it is increasingly becoming expensive. A lot of our building materials are imported and if you factor that into housing it becomes unaffordable.
We need to start exploring our local building materials as this can be an effective way of reducing costs.
Another area of reform the government can tap into is the provision of social housing g for those who are not financially buoyant.
Rental housing is another area to look out for, most people want a decent house and are not just concerned about owning the house.
With the current state of Naira and inflation, how can we finance the housing sector for optimal housing delivery?
Tough times require tough decisions, which in turn increases innovative actions. I am happy some of these issues are being addressed, we saw the newly confirmed central bank governor talking about why we are having issues of continuous naira devaluation. We need to settle outstanding payment by the central bank, once this is addressed people will know.
There’s also an issue of security of funds, once I bring my dollar into Nigeria, there should be a dollar to take out. So if that’s not happening, I wouldn’t want to bring my dollar in again. With this, we’d have shortages in building materials, supply chain issues, and a host of others.
Talking about interest rate at 27% is not something to be discussed outside the macro-economics, a lot of effort needs to be put into the macro-economics. If we use fewer foreign materials, there’d be less demand for importation input, and that will also reduce the effect of the demand for foreign exchange.
This is the time for us to also embrace innovation, Nigerians are quite resourceful. We must retreat and solve our problems ourselves. This is not the first time this is happened, and am sure we’d surmount this and move ahead.
How can the National Assembly support the new administration, especially the Ministry of Housing and Urban Development?
The new Minister of Housing and the Honourable Minister of State for Housing needs a lot of support. We know the importance of model mortgage foreclosure law has been domesticated in certain states. But one would expect homeownership to be easy here in Abuja the state capital, but reverse is the case.
Government is the biggest employer of labour, and it is bad that those who work with the government cannot buy a home and own it, not because they don’t have a federal mortgage bank, but if the house cannot be mortgaged then the aim is defeated.
Another aspect of the model mortgage foreclosure law is that it has a provision that every state must have its own law. We need the National Assembly to support this administration and the ministry.
There’s also an issue of titling, now that we have an action minister of the FCT, we expect that the issue of titling will be addressed for good.
At a point we proposed the ministry every month should publish tittles signed by the minister, no matter the amount, it is important for us to see the effort as this will connote accountability. This is also applicable to states as well.
Furthermore, the National Assembly must look at the recapitalization of the Federal Mortgage Bank. This is because we cannot have a Federal Mortgage Bank with shareholders’ funds which are eroded. It needs to be recapitalized for the role they are playing. There are quite a number of mortgage-related bills awaiting passage through the National Assembly.
We also need to have the mortgage guarantee company come up to show support to the mortgage banking industry and even commercial banks so that if you give mortgages, the idea is that if in the loan there’s a default before you realize it, you can get liquidity from the mortgage guarantee company. This is very important in ensuring the mortgage system works effectively.
NHF Act is becoming a serious matter, as at today the Central Bank of Nigeria is not championing the Law that says CBN should pursue all commercial Banks to contribute to that reform, what is your position?
The law is clear, and we must be law-abiding. At a time the National Assembly called some of the insurance companies to a meeting and that was talked about.
A lot of laws need to be reviewed, not only National Housing Fund NHF laws, the laws guiding Mortgage Banks, and even the NHF structure itself. An area this government needs to look at is the area of reforms. If we put the right reforms on policy, provide an enabling environment to thrive and support what we need to achieve.
We need to attract capital, the federal government will not have enough money for housing, and a lot of money will have to come from private sources, both within and outside the country.
We must reduce homelessness, and ensure people live in decent houses, as this will help reduce JAPA syndrome ultimately.