By Akhigbe Dominic.M. Esq.,
TUE APRIL 24 2018-theG&BJournal- Accordingly, Decree no.3 of 1992, the NHF is to operate under a situation that inter alia includes the provision that all Nigerian workers earning an annual income of N3, 000 and above should contribute 2.5 percent of their salaries to the fund. In order to ease the pooling of funds and facilitate access by the workers, the law empowers employers to remit the mandatory contributions to the Federal Mortgage Bank of Nigeria (FMBN). Also, commercial and merchant banks were mandated by the same law to invest 10% of their loans and advances into the FBMN while insurance companies are expected to Contribute 20 and 40 percents of their nonlife and life funds into real estate development as a means of further easing the housing problem.The Fund covers workers in both sectors of the economy i.e. the public sector and the organized private sector.The law also requires the three tiers of government (federal, state and local) to contribute atleast 2.5% of their annual revenues into the NHF. The policy works mainly by pooling resources from both the public and private sectors and thus limiting government’s direct participation.
However, the Decree provides for a 4% interest on workers contribution to the fund. Also, the
contributor is allowed to borrow up to five times his or her taxable income which is payable over a period of up to 35 years. While fifty percent of the pool of fund remains with the FMBN, the remaining fifty percent is kept by the Primary Mortgage Institutions (PMIs) for lending to workers. The workers are eligible to borrow any time for building purposes but where this is not done, the worker contributor can withdraw his savings (including the interest) at the age of 60 or at retirement.
The PMIs are empowered by the mortgage Decree to bridge the gap between the FMBN
and the contributors (employers and workers). They are the primary lenders that evaluate loan applications from the individual contributors. The maximum loan allowed for a contributor was pegged by the Decree at one and half a million naira and is to be jointly provided or financed by both the PMls and the FMBN.
In 1994, the NHF was under the mandate to deliver about 121,000 housing units but less than 5% were recorded to have achieved. The 1991 housing policy sought for active participation of all tiers of government, the federal, state and local government and also government agencies and parastatals
such as the federal housing Authority, the state housing Authority, Ministries and Departments.
Under the National Housing Policy 1991 FHA was mandated to develop and manage real estate on commercial and profitable basis in all the state of the federation, provide sites and services scheme for all income groups, with special emphasis on low income groups in the major cities of the country; and provide low income houses in all states of the federation.
To ensure proper and positive implementation of this policy; a committee was constituted, the National
Housing Policy Council which is saddled with the responsibilities among others to coordinate all
activities relating to housing sector and insure continuous monitoring with a view to determine its
performance. All these were basic efforts made to ensure affordable housing to the masses of Nigeria at the most affordable and convenient manner; these noble efforts by past governments have been rubbished by this government’s insincerity towards sanitizing the market space. Till there is a paradigm shift towards a free market space without undue favoritism, the housing challenges will yet get worse.
Additional materials by Society for Business and Management Dynamics
Akhigbe Dominic.M. Esq., /Property Law Expert/CEO, H.I.E Properties & Homes Ltd/SENIOR STRATEGIC PARTNER, PropertyLogic Incorporated/Seasoned Business Coach/Columnist of The BusinessDay/Contributing Editor, govandbusinessjournal.com.ng
