Ahmed Musa Dangiwa is an example of the wisdom of putting around peg in a round hole when it comes to appointing people to run our national institutions. The roundness of his peg comes from over 30 years in the real estate and infrastructure development sectors, which enables him to have specific ideas about the challenges of providing affordable housing to Nigerians and how to meet these challenges.
“We have provided over9,000 houses, and have provided mortgages worth more than N110 billion within the last three years,” he says with relish. He continues: “Apart from that, we have also created a micro finance loan which is given to individuals, especially to renovate their house.”
Before taking over as theManaging Director/Chief Executive Officer of the Federal Mortgage Bank ofNigeria, Dangiwa, an architect, had been managing partner of AM DesignConsults, an architectural and real estate development consultancy firm, since1996. Before then, he was at Jarlo international Nig. Ltd, a construction company.
There is no doubt that supervising several outstanding projects in diverse areas and sectors across the country has opened his eyes to the enormity of the nation’s housing deficits. This includes his spell at TRIAD Associates, Kaduna, where he developed his professional career in designs and project management, rising to the position of associate partner in the group.
Dangiwa knows why peopleare reluctant to go for the mortgage option in addressing their housing needs.He says that a civil servant cannot pay 30 percent equity for a house, which iswhat is on offer in commercial banks. So he led FMBN to come up with a drasticpolicy. “So we had to reduce the equity to 10 percent for a house that he hasto buy for N10 million. The equity for houses between N5-10 million was reducedto 10 percent. But any mortgage that is below 5 percent is 0 percent, whichmeans they don’t pay any equity. With that I was able to get more mortgage forNigerians, especially the low and middle income earners, and some in theinformal sector.”
Dangiwa had his first and second degrees in architecture from Ahmadu Bello University, Zarian, where he also earned an MBA He is an alumnus of the prestigious Wharton UniversityPennsylvania, U.S.A. and has attended numerous training courses in HousingFinance, Computer Aided Designs, Design and Build Workshops and Project Management,as well as several other professional and leadership training programmes.
One of the challenges in the housing sector that he has grappled with is “how to make affordable mortgages more accessible, and even if you have to provide mortgages there have to be underlining houses. Most of the houses I met were those built by developers, who sourced their funding basically from open markets at high interest rates and high cost of land, other costs which majorly increases the cost of houses.”
To address the issue of affordability,especially among civil servants, he says, “We had to enhance our constructionpanels in such a way that you will have to provide construction panels fordevelopers, to give them affordable interest rates to create affordablehouses and then we give mortgages.”
When he assumed leadershipof FMBN, he realized that many of the houses that banks had built not subscribed because people could not accessthem due to their equities being too high. “So we created another programcalled “Rent to Own”. Withthis subscribers approach FMBN offices in the states, who will give them accessto the house as tenants. While living in the houses as tenants, they pay eithermonthly or annual rents until the houses become theirs.
Dangiwa has also brought aninsurance scheme to the mortgage housing sector. In the event that the house isdestroyed by a storm, rain or other causes, insurance will be there tocover the loss, you, whose insurance also covers the eventuality of death, payingup the house on behalf of the deceased’s family.
Another innovation that Dangiwahas introduced is the use of certificates of occupancy (C of O) for lands. “Insteadof them buying houses, we can give them individual construction loans to buildthe houses at their own pace on any location the land is situated,” he explains.Money is given to subscribers in 3 phases — 30 percent to start it; we giveyou 30 percent to roof it and the remaining 40 percent for finishing.
“All these things youcannot get anywhere, because if you go to the open market, they give you a loanat 25-30 percent,” he reminds you. “They cannot give you a loan of more than 5years.”
He identifies land availability as one of the major constraints to the delivery of housing, due to the stringent conditions state governments attach to allocation of land. He notes that “Some government agencies take a lot of time to issue C of O. State governments have to ensure that they make access to land easy and they also have to make it easy for estate developers. Governments have to make sure that even if the lands are subsidised, there should be access roads into the land.”
At Sahel Mortgage FinanceLimited from a property manager, he became head of Credit Control and later manager,Mortgage Banking division. In this capacity, he was involved in the design and delivery of a wide variety of mortgage products and real estate projects,especially social mass housing.
From a very uniqueperspective, therefore, he understands why developers build expensivehouses. He links this to limited funds available to them. “First and foremost,they got the lands at very high costs – as high as 25 to 30 percent. In banksthey give construction finance at 25-30 percent interest rate, but here we giveconstruction finance to developers at 10 percent, so we have reduced in such away that constructions done by developers for FMBN subscribers are meant to bemore affordable.”
He also highlights the needfor the federal government to strengthen institutions that are into affordablehousing. Specifically, for FMBN, there is the need for increased capitalizationto at least N500 billion. Thatrecapitalization will help a lot to ensure the availability of affordablehouses to Nigerians.”
FMBN sent a memo to FEC for the required N500 billion. However,Dangiwa explains that the bank is not expecting this to be made available in a fell swoop. Realistically, it is looking for N200billion as equity contribution from the government, while N300 billion will be sourced from investors who want to invest inFMBN. “Even the N200 billion does not have to come at once; it can be in two tranches, because we know the government has other priorities. But the point needs to be stressed that housing is also a priority, because it is one of the social responsibilities of the government to ensure that citizens have access to houses.”
Dangiwa has appealed to critics of the pace at which the government is implementing its affordable housing policy, vis-à-vis the need to subsidise the scheme, to “calm down.” He admonishes: “We should understand that there are no countries that have succeeded in providing affordable houses to its citizens without subsidy, which is very important to strengthen the institutions that are responsible for doing that. If institutions such as ours are not strengthened to function properly, it is going to be difficult for them.”
He explains further: “People used to say most developed countries are not giving free houses, but they ensure that there are institutions that cater for the housing needs. For the high-end users, who usually buy their own houses at market prices, they may not be concerned but for the low and middle income earners, mortgage is the most important and convenient way of owning a house. You find out that once you start working in the foreign land, they make it easy for you to access mortgages for you to pay over a period of time and make sure you own a house.”
Given his vast experience from having traveled to many parts of the world, he sure must be inspired by examples, to which he responds: “My best example is Malaysia, which has been able to achieve that. Their mortgage system works very well. So does Canada’s, which also has a compulsory contributions scheme for individuals from the day they start working. That is the only way to have a pool of funds to ensure that people have their own houses.
In addition to worryingabout the challenges of providing houses to the masses, Dangiwa has sought toaddress the welfare of FMBN staff. He recalls: “When we came on board we foundout low morale at work for which many factors are responsible. There are peoplewho are given housing loans, but you find out that their rental income is toolow for even senior staff to own houses even on the outskirts of Abuja. So we had to make sure that their rental allowances were increased by 100 percent.And we discovered that most staff have stayed for 10 years without promotion.So we had to promote staff, to motivate them to do better.”
He also implemented a programme of inclusion, when he found out that in the bank, there were some staff that were employed as casual staff. “I met 276 of such casual staff, who were denied permanent employment by the previous leadership. They kept on picking and using people as casual staff, some of whom were graduates, on a monthly salary of N40,000.”
He had to ensure rapid absorptionof more than 50 percent of them into the system.
At the end of his term atFMBN, Dangiwa would like to be remembered for his efforts to use internalcapacity to complete several abandoned projects; ensuring that staff’scompulsory contributions were promptly refunded on retirement, unlike in thepast when it took up to two years for refunds.
He also effected decentralisation of the bank’s operations. Of this he says: “Through decentralisation, states now have the right to process and recommend for disbursement to head office, so they do the checks and balances and send to the head office.” As a result, the bank disbursed over N 31 billion in the past within three years ago, compared with the disbursement within the previous 25 years of the bank from (1992 to 2017), the disbursement was only N10 billion.
Before he took over the reins most of FMBN’s operations were carried out manually. “Before, you only had a passbook and when you contribute; you didn’t even know what you were contributing,” he recalls. This did not help transparency and accountability. Now,many of its operations have been digitized. With just dialing *219#,customers can transact a lot of their businesses with the bank.
“So one of our legacies isdigitalization of the operations of the bank,” he rounds off.