- CBN, NMRC to Tackle Mortgage Financing Constraints
The Central Bank of Nigeria on Monday said it was collaborating with the Nigeria Mortgage Refinancing Company to address some of the major challenges affecting the delivery of affordable housing in the country.
The Deputy Governor, Financial Systems Stability, CBN, Aisha Ahmad, said this in Abuja during a workshop on the Model Mortgage and Foreclosure Draft Bill.
The bill seeks to address some of the legal and administrative constraints to the housing sector.
It is also aimed at making lending to the housing sector less risky and create the enabling environment for the growth of the mortgage markets.
Ahmad said the need to tackle the challenges of the housing sector was born out of the conviction that housing remained one of man’s primary needs.
For instance, she stated that from available statistics, Nigeria’s housing deficit currently stood at approximately 17 million, given an estimated demand of between 38 million and 44 million units that needed to be provided.
Ahmad explained that despite this grim situation and the critical importance of housing, Nigeria’s housing stock stood at about 13 million for a population of about 180 million people.
Quoting a World Bank study, the CBN deputy governor stated that Nigeria required about N60tn to address the housing deficit.
To address the challenges of housing delivery in Nigeria, she said there was a need to tackle the issue of legal and administrative impediments, particularly at the state level.
She stated, “The contribution of the housing mortgage sector to the growth of the Nigerian economy does not give much to cheer either, as the sector constitutes less than one per cent of the nation’s Gross Domestic Product as opposed to the situation in developed economies where the sector constitutes from 50 per cent to 60 per cent of the GDP.
“The Centre for Affordable Housing Finance in Africa highlighted legal and administrative restraints as some of the major hindrances to the growth of homeownership in Nigeria, rated even stronger than access to finance as a constraint.”
Also speaking at the event, the Executive Director for Policy, Partnerships and Business Development, NMRC, Dr Chii Akporji, called on state governments to simplify land administration procedures.
She said the constraints created by difficult legal processes, antiquated land administration infrastructure and policies, the significant costs and multi-layered processes involved in land titling and perfection of land related transactions had left the housing and mortgage industry less attractive to investors.