NHF: Will contributors’ bread be better buttered at housing loan board?

The National Housing Fund (NHF) was set up 25 years ago as a child of circumstance by an Act which spelt out its functions and operations as a means of facilitating access to housing loans by workers, mostly those in the formal sector of the economy.

The Act compels workers to contribute two and half per cent of their monthly salaries to the fund and also empowers employers to deduct the contributions at source. Although the Act covers workers in both public and private sectors, mostly federal public servants have been contributing faithfully.

The fund, which guarantees contributors access to housing loan for buying, building or renovating existing houses after contributing for just six months at 6 percent interest rate, is statutorily managed by the Federal Mortgage Bank of Nigeria (FMBN)—Nigeria’s secondary mortgage institution.

The FMBN’s status as a secondary mortgage institution poses a challenge to the operations of the fund because it restricts the bank from dealing with individual contributors to the fund. This has been identified as a major problem that needs to be resolved quickly.

Besides lack of access to loans, there is also problem of FMBN’s failure to give individual contributors details of their statement of Account every year as the law demands it to do.

In a number of ways, FMBN has failed to live up to its responsibility in the management of the fund. Since the year, 2000, labour unions have been kicking against continued contribution by workers to the NHF on the ground that there was no guaranteed benefit.

Labour alleges that as at 2006, about 1.8 million workers were registered from 17,132 employers that subscribed to the NHF scheme, with a contribution of about N6 billion, adding that less than N280 million was disbursed to a handful of 446 contributors as loans.

Furthermore, about N20 billion was said to have been contributed by workers to the fund between its inception and 2006. The law governing the fund has left the Federal Government Staff Housing Loan Board (FGSHLB), which has been operating a social welfare scheme for providing houses for federal government workers since 1924 in the cold.

Recently, the House of Representatives dusted the Act setting up the FGSHLB with a view to amending 44 years after its last amendment. The public hearing conducted by the House Committee on Public Service Matters, provided a platform for workers to ventilate their anger and frustration with NHF scheme and to call for the transfer of their contributions to the housing loan board.

Under the proposed amendment of the FGSHLB Act, Section 8 of the new Act is proposing that 50 per cent of Federal Public Service contributions to the NHF should be channeled to the Loans Board to guarantee contributors’ access to the fund.

Emmanuel Omonowa, director, Legal Services, in Office of the Head of Service of the Federation, noted at the public hearing that contributions to the NHF scheme was being made by Federal Government employees alone, suggesting that 50 per cent should be ordered in the Act, to be amended, to be paid to the loans board.

“Why do we say so? Number one, for anybody to retire from the public service today, he must be requested to bring a certificate from the loans board to be sure that he does not owe. Therefore, if these are the people contributing and they must come to the board to obtain a certificate to show that they do not owe, why not put their contribution here so that when they come for their certificate, if they have not obtained any loan, their contributions should be put together and given to them,” he said.

This, he hoped, would boost the confidence of the public that a system was in place unlike what is on ground where deductions are made at source from workers’ salaries but that money put together is given to primary mortgage institutions (PMIs) to build houses that civil servants cannot buy.

“The contributors who should be helped to put money together to own houses, cannot own the houses and they cannot get their contribution back. This ought not to continue so that we do not have our senior citizens retiring with heart attack”, he submitted.

A representative of the FMBN pointed out that the NHF Act, which empowers the bank to manage the affairs of the fund was open to all contributors to the fund, adding that civil servants and public sector officials have been benefitting from the fund.

“We reckon that the Act provided for the monies collected from the fund be channeled through the PMIs for on-lending to contributors and we have our problems there. We have been seeking to amend our own Act and then the NHF Act, to meet the realities of the time”, he assured.

But the workers disagreed, stressing, “What we are saying, precisely, is that housing is very important to human existence. The NHF, who contributes to it? The Act says two and half percent of salaries of workers, and housing is on the Concurrent List.

The kicked against the idea of using money contributed by workers to fund mortgage owners or mortgage system, in which the workers, themselves, cannot pay the terms. “That is the critical issue. The FGSHLB exist wholly for federal public employees; as a result, the bulk of their contribution should go there. That is equity. But to take the contributions of poor workers and fund mortgage institutions, who in most cases, provide housing schemes for the rich is unacceptable”, the workers emphasized.

Apebo Joshua, a representative of Senior Civil Servants Association of Nigeria, also demanded that the contribution of public servants should be transferred to the FGSHLB because, according to him, “we do not benefit from our contributions to the NHF, being managed by the FMBN”.

Continuing, he said, “even if the FMBN gives private developers money to build houses, they would build houses that are not affordable to civil servants. If, for instance, a developer charges N4 million for a house; a civil servant who desire to own such a house would be required to pay 10 per cent of the sum, amounting to N400,000. How much is minimum wage? Just N18,000.

Chuka Uroko