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13 States Set to Adopt New Mortgage Law

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  • 13 States Set to Adopt New Mortgage Law

To make access to land, housing and mortgage less cumbersome for their indigenes, about 13 states are expected to adopt the Model Mortgage and Foreclosure Law between now and the first quarter of 2019.

The MMFL is an initiative of the Nigerian Mortgage Refinance Company which calls for the creation of a state mortgage board as a single window clearance mechanism to facilitate accessible and affordable mortgages for residents of the state.

The PUNCH gathered on Friday that eight states – Edo (which has established a mortgage board) Akwa Ibom, Cross River, Kogi, Benue, Plateau; Kebbi; and Gombe – will conclude the process by November.

Ogun State, on the other hand, is awaiting the governor’s sign-off to adopt the law while four other states are said to be looking at adopting the law by the first quarter of 2019.

Lagos and Kaduna states have enacted their own mortgage model law, and have worked on their property rights and land digitisation.

In most developed countries, mortgage plays an important role in homeownership. But in Nigeria, the process as well as the interest rate impede the growth of the mortgage industry, which is said to currently contribute only about 0.5 per cent to the country’s Gross Domestic Product. In some countries such as South Africa, mortgage contributes close to 30 per cent to the GDP.

When adopted, the MMFL is expected to create an enabling environment for states to provide affordable housing for their citizens by de-risking the housing and mortgage sector and unlocking its potential for economic growth.

According to the provisions of the law, the ease of doing business index for the states affected will be improved and this will in turn further improve the business case for new investments in housing and catalyse access to finance for citizens of the states.

This, it was gathered would lead to increasing taxable income to the states as well as improvements in the internally generated revenue profile.

The law will also make provision for the establishment of mortgage board and mortgage registry; reduce the time stretch it takes to issue Certificates of Occupancy by delegating top government officials to sign the governor’s consent rather than the governor alone; and make land ownership transfer easy, among other benefits.

The Central Bank of Nigeria’s Head, Project Administration Team of the National Housing Finance Programme, Mr Adedeji Adesemoye, stated that the law would help to correct some of the shortcomings of the Land Use Act, which limit access to land and housing.

“It will create better access to mortgage loan in the states and help manage the current Land Use Act which has some unintended negative aspects that limit access to land and which in turn is a restriction of access to homeownership,” he said.

He said Lagos and Kaduna states that adopted the law earlier had streamlined their operations so that people applying for C of O could predict when it would be issued.

“If you apply for governor’s consent to mortgage your property, you can predict when it will be issued. Some of these states have also delegated the governor’s consent so that any of the commissioners so delegated can sign it, which will make the process faster,” Adesemoye said.

He also said the processes would help the states to key properly into the Federal Government’s reforms and make mortgage transactions to take place in their states regularly, thereby helping to entrench mortgage in the housing sector.

According to findings by our correspondent, since adopting the law, the Kaduna State Government has modified and automated its land registry; fast-tracked the mortgage registration process; and initiated a process where the governor’s consent must be granted within 30 days of application.

It has also helped the state to attract a World Bank investment of over $200m and increased its IGR.

Similarly, the Lagos State Government has automated its land registry.

Adesemoye said the law would serve as a paradigm shift from supply-driven housing development to demand-driven where developers would not be building without having a demand.

“Currently, developers are building but not looking at effective demand; so, we have buildings on the ground that are not in demand; there is a disconnect between demand and supply. And then the banks will be suffering because of the loan taken for the development. But the new structure will enable homeowners to decide what they want according to their income and go for it,” he added.

The Chief Executive Officer of real estate development firm, Alphacrux Limited, Tobi Adama, stated that with the population of the country at almost 190 million, Nigeria should have much more than the estimated registered 50,000 mortgages.

He said, “This shows we have not scratched the surface at all. If the states are adopting a new mortgage law, it should be encouraged because we need more people to take mortgages. People still save for 10 to 20 years before buying a home, but it should not be so.

“Once you have a steady income, you should be able to take mortgage and pay it over the next 30 to 40 years, depending on your age. That is what is done in every advanced country. Within Africa, mortgage still contributes a lot to the GDP; but it is not so in Nigeria.”

A former Chairman, Estate Surveyors and Valuers Registration Board of Nigeria, Williams Odudu, said it was heart-warming that state governments had started thinking of ways to make homeownership easy for their indigenes.

He however stated that civil servants should be given a reorientation.

According to him, they create unnecessary bottlenecks that hinder the implementation of certain laws by government.

“Some challenges are put in place by civil servants who exploit the situation. They intentionally create problems that will make the system not to work. A Certificate of Occupancy, for instance, should not take more than one month but some civil servants, not necessarily the governor, increase the time. Their mindsets about making money through exploitation should be changed for the new system to be effective,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Adesola Adeduntan’s Early Departure Prompts First Bank Holdings to Scrap Capital Raise Plans

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FirstBank Headquarter - Investors King

First Bank Holdings Plc has decided to scrap its plans for capital raise following the early departure of its Managing Director, Adesola Adeduntan.

The decision to cancel the extraordinary general meeting (EGM), which was planned to discuss the proposed N300 billion capital raise, comes amidst Adeduntan’s resignation from his role, eight months before the scheduled expiration of his tenure.

The bank formally announced the cancellation of the EGM in a filing seen by Investors King on Friday.

The meeting, which was initially scheduled to be held virtually on April 30, 2024, aimed to seek authorization from the company’s members for the capital raise and address other related matters.

Adeduntan’s resignation, announced on the same day as the cancellation of the EGM, comes as a result of the Central Bank of Nigeria’s tenure requirements affecting bank executives.

In his retirement letter addressed to the Chairman of First Bank, Adeduntan expressed gratitude for the support received during his stewardship and highlighted the strides made by the bank during his tenure.

He stated, “During this period, the bank and its subsidiaries have undergone significant changes and broken new grounds. We have repositioned the institution as an enviable financial giant in Africa.”

Adeduntan further mentioned his decision to pursue other interests, prompting his early retirement effective April 20, 2024.

The cancellation of the capital raise plans shows the impact of Adeduntan’s departure on the bank’s strategic initiatives.

It reflects a shift in priorities for First Bank Holdings as it navigates leadership changes and seeks to chart a new course for its future direction.

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Banking Sector

First Bank MD, Dr. Adesola Adeduntan, Resigns to Pursue New Opportunities

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Dr. Adesola Adeduntan - FirstBank CEO - Investors King

Dr. Adesola Adeduntan, the Managing Director of First Bank Nigeria Limited, has announced his resignation from the bank after nine years of leadership.

In a letter addressed to the Chairman of First Bank, Mr. Tunde Hassan-Odukale, Dr. Adeduntan expressed his decision to step down voluntarily, effective April 20, 2024, to pursue new opportunities.

Having served as the CEO since January 1, 2016, Dr. Adeduntan’s tenure has been marked by significant transformations within the institution. Under his leadership, First Bank and its subsidiaries have undergone substantial changes, positioning the bank as a formidable financial powerhouse in Africa.

In his resignation letter, Dr. Adeduntan highlighted the achievements made during his tenure, stating, “We have repositioned the institution as an enviable financial giant in Africa.”

He expressed gratitude to the board of directors of First Bank and FBN Holdings Plc for their support throughout his stewardship.

Dr. Adeduntan’s decision to resign comes as he approaches the end of his contract, which was set to expire on December 31, 2024.

He stated, “After which I would no longer be eligible for employment within the bank.” Despite his departure, he wished the institution continued success and progress in its evolution.

Throughout his career in banking and finance spanning over three decades, Dr. Adeduntan has been recognized for his contributions and received numerous awards.

He holds a Doctor of Science, Honoris Causa, and an MBA from Cranfield University, United Kingdom, and is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Bankers of Nigeria (CIBN).

Dr. Adeduntan’s departure marks the end of an era for First Bank, as the institution prepares to transition into a new phase of its evolution.

His leadership has left a lasting legacy of transformation and growth, and his contributions will be remembered in the annals of the bank’s history.

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Banking Sector

UBA America Strengthens Commercial Diplomacy, Hosts Diplomats, Others at World Bank Summit

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UBA

UBA America, the United States subsidiary of United Bank for Africa (UBA) Plc hosted diplomats, government officials and business leaders to a networking reception in partnership with the esteemed Business Council for International Understanding (BCIU) and the U.S. Department of States in Washington DC on Monday .

The event which was held on the sidelines of the ongoing IMF World Bank Spring Meetings was organised by the BCIU and US Department of State to enhance collaboration and fortify commercial diplomacy among nations, institutions and individuals.

Speaking during the event, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, noted that the bank’s co-hosting of the event via its American subsidiary, underscores its commitment towards cultivating robust relationships within the development communities in the United States.

He said, “As a distinguished member of BCIU, a non-profit organisation providing customised commercial diplomacy services, UBA Group and UBA America share BCIU’s vision of actively pursuing strategic opportunities, contributing to global economic cooperation, deepening of economic diplomacy, facilitating ideas, forging partnerships, and adding value for all stakeholders.”.

“Our resolve to co-host this Networking Reception symbolises our dedication to fostering inclusive economic growth and partnership across borders. By leveraging platforms like this, we can collectively address shared challenges and seize opportunities for sustainable development,” he stated further.

BCIU is a non-profit Association comprising of policy experts, strategic advisors, and trade educators, and offers bespoke commercial diplomacy services to the world’s governments and leading organisations, from Fortune 100 companies to global investors and multilateral institutions.

Only last year, the CEO UBA America, Sola Yomi-Ajayi, was appointed to the Board of BCIU, where she collaborates with fellow board members to ensure the organisation operates in alignment with its by-laws and New York 501(c)3 non-profit legislation.

Yomi-Ajayi has been committed to nurturing long-term organisational growth and sustainability, thereby reinforcing the bond between UBA America, BCIU, and the broader international community.

UBA America is the United States subsidiary of United Bank for Africa (UBA) Plc, one of Africa’s leading financial institutions with presence in 20 African countries, as well as in the United Kingdom, France, and the United Arab Emirates. UBA America serves as a vital link between Africa and the global financial markets, offering a range of banking services tailored to meet the needs of individuals, businesses, and institutions.

As the only sub-Saharan African bank with an operational banking license in the U.S., UBA America is uniquely positioned to provide corporate banking services to North American institutions doing business with or in Africa.

UBA America delivers treasury, trade finance, and correspondent banking solutions to sovereign and central banks, financial institutions, SMEs, foundations, and multilateral and development organizations. Leveraging its knowledge, capacity, and unique position as part of an international banking group, the Bank seeks to provide exceptional value to our customers around the world.

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