NAN-H-98
Housing
By Kate Obande-Okewu
Abuja, Feb.10, 2017 (NAN) The European Union Support to the Federal Government Reform programme (EU-SURFEGOR) has called on the Federal Government to source for alternative means of funding the housing loan programme for civil servants.
Prof. Olaseni Bello, Team Leader of the programme made the call in an interview with the News Agency of Nigeria (NAN) on Friday in Abuja.
He said that the monthly National Housing Fund that was being deducted from the salaries of civil servants was not feasible and could not be enough to build a house.
Bello said that the budget could not fund housing loan because the demand would be so much on the budget.
He said that the Federal Government Staff Housing Loans Board (FGSHLB) should go into the capital market and source for funds to enable them effectively actualise their goals.
“The National Housing Fund scheme is too slow a system and it is not financially feasible, it is just a waste of time.
“For example, if you deduct N2,000 a month from someone for a year, it amounts to N24,000 and after four years it’s just N96,000, you can’t build a house with that.
“The best thing is to go to the capital market, because that is the market for long term funds and that’s what other countries do.
“It is a system where the bank introduces what we call mortgage backed securities.’’
According to Bello, the mortgage backed security is a system where money is raised from the capital market, investors invest in that bond and the repayments of the investors will come through the repayment of the mortgages
He further said: “It is an asset that is backed by the cash flows from the housing loan.
“When the money is raised in bulk, an institution like the Federal Mortgage Bank can house the fund, and then private developers under prescribed criteria can access the money.”
According to him, FGSHLB has been in existence for over 20 years, but has given loans to only 30,000 civil servants.
“The population of the civil servants in the country is about 90,000, therefore, for everyone to partake it will take like 60 years.
He attributed the challenge in the housing sector to lack of discipline on the part of the government, adding that they hardly returned what they borrowed, if not they could easily borrow to fund the loan.
“In Nigeria, we are very skeptical about government borrowing, because they are not disciplined, but if they are and can pay the money back, there won’t be any problem in the sector,’’ Bello said. (NAN)
KTE/KOLE/MO
==========Edited by Remi Koleoso/Morayo Omolade