Leading housing sector advocacy group – Housing Development Advocacy Network (HDAN) has commended the Central Bank of Nigeria for its decision to include the housing sector in its planned intervention as the country grapples with the impact of the novel coronavirus pandemic.
According to a statement by the group’s president, Festus Adebayo, the decision by CBN to provide funding for housing sector development is an answer to a call that has been on for a while.
According to a letter by CBN Governor, Godwin Emefiele titled, “Turning the Covid-19 tragedy into a new opportunity for Nigeria,” real estate development stakeholders that can provide evidence of profiled off takers and with the financial capacity to repay will be given funds when covid-19 ends, to enable mass production of affordable housing for millions of Nigerians in dire need of them.
The governor also pledges to ‘’consider ways to assist the mortgage finance sub-sector as well as build capacity at the state levels for their land administration agencies to process and issue land titles promptly, implement investment friendly foreclosure laws and reduce the cost of land documentation, as this has remained a major inhibiting factor in the provision of affordable housing in the country.’’
The Housing Development Advocacy Network has been at the forefront of making similar demands from the government over the years in order to address the critical problem the country faces in the housing sector.
In the words of Adebayo, ‘’we cannot hold back our commendation for the CBN governor for deeming it right to listen to the relentless cries of housing stakeholders in HDAN, whose major preoccupation is to see that the public and private sectors collaborate for the benefit of millions of Nigerians who are either homeless or living in sub-human conditions, especially in rural and sub-urban areas.
‘’We have adopted so many strategies in making this call. From media engagements and stakeholders’ forums like AIHS, we have clearly outlined the right strategies for the government to follow if it wishes to do something about the housing crisis. Supporting real estate development like the CBN governor has announced is one of those strategies we have outlined. The issue of title and foreclosure have almost become a song on our lips. So, we are indeed pleased with this announcement.’’
Though Adebayo believes that there is so much more to be done, and it is not yet time for celebration, but this is a step in the right direction. According to him, housing sector stakeholders should celebrate cautiously regarding this news as only time will tell if the fortunes of homeless Nigerians are truly going to be turned.
“There are so many factors preventing Nigerians from getting affordable housing, and they include inadequate government attention to the sector; instability of the foreign exchange; corruption; land use act; poor government regulation of the sector; poor funding; absence of long term housing loan; high cost of building materials among others,” he said.
An immediate term policy intervention will see the CBN ensuring financial system stability by granting regulatory forbearance to banks to restructure terms of facilities in affected sectors. Adebayo said that this can certainly be beneficial at the moment for real estate development with regards to engagement with lenders and facilitators.
According to Emefiele’s letter, the housing sector falls in the medium term policy priority by the CBN. As has always been advocated by HDAN, the CBN has now chosen the housing sector as one of the four sectors to intervene in immediately after covid-19, in order to enable faster recovery of the economy in a way that it can support mass employment and wealth creation. The other three sectors are light manufacturing, renewable energy and cutting edge research. Incidentally, these are sectors that are also closely related to affordable housing.
The CBN, according to Emefiele will also provide an initial intervention of N500 billion for manufacturing firms to among other things increase the efficient production of products like cement, iron rods, doors and others. The bank wishes to also collaborate with the private sector in its ongoing investment in cement production using enhanced technology and automated manufacturing models.
This particular announcement is a source of excitement for Adebayo whose advocacy group are known for championing the adoption of innovation in an ever changing housing landscape.
‘’The challenge we face in Nigeria as far as housing is concerned is not something that can be solved with the old bricks and mortar methods. We need quick and efficient technology that will build more houses and in record time. A repacked model. Some companies have already shown the capability to deliver in this area. All CBN needs to do is to identify them and work with them,’’ he said.
Adebayo also mentioned that his group is ready to use all of their advocacy platforms — television and radio programs and their other credible platforms which has brought them closer to many states to mobilize state governments.
“The need to carry state governments along in this intervention cannot be overemphasized because they are the owners of land and they can assist in the area of provision of infrastructure. It is when the issue of land and infrastructure are critically addressed that we can provide the affordable houses for those that need the houses.
“We cannot afford to make the mistake of the past, where houses that were built were not within the affordability of those that really need them.
“The intervention must address the interest rate which must be brought to single unit and also the mortgage support must not be less than 15years for repayment,” he said.
As a commitment to reducing the country’s housing deficit, CBN intends to facilitate government intervention in three major areas which are housing development, mortgage finance and institutional capacity.
According to Emiefele, it is now very important for Nigeria to more than ever before seek local solutions to local problems. In the wake of the virus, most countries of the world are focusing solely on their economy and the health of their citizens. Countries like Nigeria that rely heavily on foreign aid will now have to look inward, he said.
The outbreak of covid-19 is having a toll on all economies, especially Nigeria. The price of the country’s biggest export – crude oil – has fallen drastically.
As a response to the pandemic, the CBN clearly state that it is strengthening the Nigeria economy by providing a combined stimulus package of about N3.5 trillion in targeted measures to households, businesses, manufacturers and healthcare providers.
For Adebayo, the plan by CBN to also support the development of more infrastructure as soon as the virus wanes is also expected to speed up the provision of affordable housing in the country.
He also commended all the people who are involved in the selfless service of revamping the housing and mortgage sectors. “Their names shall be written in gold,” he said.