The World Bank and the Central Bank of Nigeria (CBN) have indicated their readiness to collaborate on some steps aimed at reviewing the nation’s existing Land Use Act to create enabling environment for the nation’s housing sector’s growth.
As a step towards achieving this goal, the World Bank has extended a $300 million lifeline credit to the country for the Nigerian Housing Finance Programme (NHFP) to improve mortgage finance and refinancing regime.
The CBN on Tuesday said that the credit line would provide a guarantee to mortgage institutions that credit to customers will not be unpaid by the beneficiaries.
Apart from the guarantee by the apex bank, the two financial institutions, in collaboration with the
The effort is aimed at removing obsolete clauses in the Land Use Act that undermine investments in mortgages in the country.
A two-day workshop on the law review exercise which started on Monday and which has as its theme ‘Creating an enabling environment for the growth of the Housing and Mortgage sector: The need for Land and Law reform’ seeks a new model mortgage that will also address foreclosure and other issues in the sector.
Speaking at the workshop, the apex bank’s Director of Banks and Other Financial Institutions Supervision Department, Mrs. Tokunbo Martins, explained that the apex bank would underwrite part of the $300 million risk of the NHFP.
She said: “CBN is the project implementing entity of the NHFP and the NHFP is meant to re-fund the primary and secondary markets for mortgages. It is a public-private partnership and we have a loan from the World Bank. So, CBN itself is not putting anything in directly.”
Also, the Head of Nigeria Housing Finance Programme domiciled in CBN and Head of the Implementation Team, Jones Adesemoye, explained that the major driver of “the programme, NMRC, funds (N8.2 billion and N11.1 billion) from the Nigerian capital market to refinance the mortgages that have been financed by Primary Mortgage Institutions.”
In her remarks, one of the Directors of NMRC, Mrs. Chii Akporji, called on the state governments to take appropriate steps to create enabling environment for mortgages and housing investments to thrive in their domains.
The mortgage finance expert noted that there were some steps which are key to growing mortgage and housing at the sub-national level that the state governments should take in order to effectively reform the nation’s mortgage and housing sector.
Akporji listed the steps to include the issues of land titling, property registration and instituting a foreclosure mechanism, amongst others.