Reps decry loss of N6.7trn investment into Nigeria’s housing sector

Members of the House of Representatives on Thursday expressed concern over the failure of deposit banks and merchant banks to invest N6.7 trillion being 10 percent of total loans and advances made between 2011 and 2016, into the housing sector as provided in the National Housing Fund (NHF) Act, 2004.

Breakdown of the amount showed that about N5.146 trillion should have been invested between 2011 and 2015 while N1,553,673,116,100 should have been invested as at 31st March, 2017 pursuant to section 11 of the NHF Act.

According to a Central Bank of Nigeria’s report cited by the House, loans and advances made by Banks between 2011 and 2015 amounted to N51.46 trillion, while preliminary analysis showed that the banks recorded loans and advances amounting to N15.53 trillion as at December, 2016.

Section 5 of the Act, provides that “every commercial or merchant bank shall invest 10 percent of its loans and advances in the Fund at an interest rate of one percent above the interest rate payable on current account by banks.”

It also provides that “Every registered insurance company shall invest a minimum of 20 percent of its non-life funds and 40 percent of its life funds in related property development of which not less than 50 percent shall be paid into the Fund through the Federal Mortgage bank of Nigerian at an interest rate not exceeding four percent.”

Similarly, section 11 of the Act empowered CBN to collect from commercial and merchant banks at the end of every year and not later than one month thereafter, the percentage of their contributions into the Fund and shall within two months of making the collection, pay the money into FMBN for investment into the fund.

Worried by the development, the House resolved to conduct a public hearing where financial experts and other stakeholders drawn from banks, insurance, companies, CBN, National Insurance Commission (NAICOM) and relevant ministries, departments and agencies (MDAs) are to establish the reasons for non-compliance with the NHF Act by banks and imsurnave companies.

The lawmakers expressed the concerns during the debate on the motion on the need to ensure full compliance with the National Housing Fund Act for effective housing delivery in Nigeria, sponsored by Ahmad Kaita.

“The House is further aware that available figures from the Central Bank of Nigeria (CBN) of loans and advances made by Banks from 2011 to 2015 amounts to N51.46 trillion, that at 10% investment of such loans and advances into NHF, about N5.146 trillion should have been invested in the fund by the banks over a period of five years.

“The House is cognizant of Section 16 of the Constitution of the Federal Republic of Nigeria, 1999 which enjoins the state to direct its policy towards ensuring that suitable and adequate shelter is provide for all citizens.

“The House recalls the promise of the Federal Government to create an additional middle-class of at least four million new home owners by 2019 by enacting national mortgage single digit interest rates for purchase of owner occupier houses as well as review of the collateral qualification to make funding for home ownership easier, with a 15 to 30-year mortgage terms which will equally help the banking system to migrate from short to long term perspective of their role in sustaining the economy.

“The House is conscious of the fact that Federal Government could create at least one million new home owners through a national single digit interest rate for purchase of owner occupier houses at an average rate of N6 million per unit of house, the funds required to provide a million new home owners per annum is N6 trillion only,” he noted.

While ruling, Speaker Yakubu Dogara who presided over the plenary session, mandated the House Committee on Housing to report back within eight weeks for further legislative action.

KEHINDE AKINTOLA, Abuja