Barring any last-minute change of mind or policy re-adjustment, President Bola Ahmed Tinubu has planned to merge all the federal government agencies saddled with the responsibility of promoting home ownership in the country.
Nigeria’s 16th President Tinubu hit the ground running from day one when he assumed office with some far-reacting decisions in less than one month.
A report credited to Tinubu, which he has discredited, quoted him as saying that the federal government’s housing agencies are too small and fragmented to effectively address the housing deficits in the country.
Also, the federal government currently has three agencies saddled with the responsibility of promoting housing for Nigerians, and they are; the Federal Mortgage Bank of Nigeria; the Nigerian Mortgage Refinancing Company; and the Family Homes Fund.
The move
Tinubu, according to his manifesto, said his government would ensure greater cohesion and efficiency by merging these agencies into a new, more competent body. The document stated that the new entity would inherit the functions of existing housing authorities and would be adequately capitalised by the federal government.
The newly created agency, the document added, would have a three-fold mandate to grant low-interest rate mortgages directly; guarantee qualified mortgages issued by banks; and purchase mortgages from private banks.
According to the document, “The various federal agencies meant to promote homeownership are too small and fragmented. To address the housing deficit, we will ensure greater cohesion and efficiency by merging these agencies into a new, more competent body.
“This new entity will inherit the functions of existing housing authorities and shall be adequately capitalized by the Federal Government. The agency will have a three-fold mandate to grant low-interest rate mortgages directly; guarantee qualified mortgages issued by banks; and purchase mortgages from private banks.”
The concerns
Speaking with Blueprint Weekend, a real estate economist, Mr. Benjamin Onigbinde, said the proposed merger is a good move which, according to him, would drive an increase in the housing stock, and reduce wastages and bureaucracy in the housing sector.
Onigbinde, who is the chief executive officer of Sigvent Property Trust Limited, however, said the government also needs to increase the capitalisation of the existing agencies and adopt more technologies in the service delivery process.
He stressed the need for effective regulations in the industry with more focus on standards and customer relationship management.
He said, “The proposed merger of federal agencies by the new administration of President Bola Ahmed is a good approach to increase housing stock and reduce wastages and bureaucracy. However, there could be a better option, I have always believed in a bottom-to-up approach to housing development since the deficit nature tends towards the low-income segment of the economy.
“I felt the administration should look towards the establishment of micro-mortgage finance institutions as well as promoting housing cooperative societies along all levels of government. The government also needs to increase the capitalisation of the existing agencies and adopt more technologies in the service delivery process.
“Also, more efforts should be placed on technical aspects of housing development with a focus on research into affordable housing models. It will make an impact, but there is a need for commitment on the part of all stakeholders to make any new strategy work.
“Similarly, more collaboration needs to be enforced by all players to deliver more results. Also, there is a need for integration policies at all levels of government, such that a significant result could be achieved. More importantly, there is the need for effective regulations in the industry with more focus on standards and customer relationship management.”
On his part, Mr. Akintunde John, a realtor, backs the planned merger of all Federal Housing agencies into a bigger one describing the move as “a good omen for the country.”
John also described the move as “a unique opportunity” to reposition and restructure the affected agencies to ensure that they are fit for purpose and deliver government priorities for the benefit of citizens.
“The merger will be good for our country. It will be a unique opportunity to reposition and restructure the affected agencies to ensure that they are fit for purpose and deliver government priorities for the benefit of citizens.
“It will help the government to tackle the perennial problems of overstaffing or understaffing in certain ministries, departments, and agencies which leads to duplication of functions, lack of clear job descriptions, and performance management system.
“I think it will also address the issue of incompetence in executing priority programmes in the housing sector, and you know these issues affect all ministries, not just the Ministry of Works and Housing,” he said.
On his part, a source at the Federal Mortgage Bank of Nigeria (FMBN) told this reporter that as an agency of the government, the planned merger was a welcome development, but asked the government to rather strengthen all the housing agencies to bring about the desired result.
“Every administration has its blueprint and policy framework, and like it is being speculated, we have not been officially briefed. However, if the government is ready, it can effect change, and nobody has the power to challenge that. But as an agency of the government, we are concerned about how FMBN would be further strengthened to deliver on its core mandate of providing long-term credit facilities to mortgage institutions in Nigeria,” he said.
According to a media report, the managing director of the Nigerian Mortgage Refinance Company (NMRC), Kehinde Ogundimu, was recently quoted as kicking against the planned merger of some of the housing agencies in the country.
“There is no need to talk about merging the housing agencies that are not even enough. How many do we have? One will be talking about the Federal Mortgage Bank of Nigeria (FMBN); the Nigerian Mortgage Refinance Company (NMRC), the Family Homes Funds, the Federal Housing Authority, and a few others that are neither here nor there,” Ogundimu said.
According to him, what the country needs now is not reducing the number or merging existing agencies, but making them strong by capitalising on them so that they can undertake bigger projects.
