Housing: $300m W/Bank credit inadequate – AMCON

Managing Director, Asset Management Corporation of Nigeria (AMCON), Mr. Mustafa Chike-Obi, who was the keynote speaker at the just concluded Real Estate Unite, an annual conference organised by 3invest Limited, said given the current housing deficit in the country, a lot more efforts were needed and described the MRC approach as “using a pen knife […]

Managing Director, Asset Management Corporation of Nigeria (AMCON), Mr. Mustafa Chike-Obi, who was the keynote speaker at the just concluded Real Estate Unite, an annual conference organised by 3invest Limited, said given the current housing deficit in the country, a lot more efforts were needed and described the MRC approach as “using a pen knife to cut an Iroko tree.”
The Mortgage Refinance Company, which was recently set up to make the availability of mortgage loans easier, has come under scrutiny with experts in the mortgage finance sector saying the housing problem in the country require more attention than it is presently getting.
He said housing should be one of the country’s major economic drivers, and that its challenges required serious attention that would help contain the population explosion, with an annual growth rate of 2.5 per cent.
According to him, going by the current deficit of 17 million housing units, the country needs one million units per annum for the next 17 years to meet this need.
He added that both the government and private initiatives in housing delivery were still at an average of 30,000 units annually with a huge gap between supply and demand.
The AMCON boss said funds such as the one to be provided by the MRC would remain inadequate until the government created a balance sheet for the sector where banks would contribute 10 per cent to the housing sector; insurance sector, 10 per cent; and the government, 80 per cent.
“Meeting the need of Nigeria’s housing market requires an annual N10tn for the next five years. But the total balance sheet of banks in Nigeria annually is N20tn. Nigeria’s annual budget stands at an approximated N5tn annually; so where is the money for housing going to come from?” he queried.
Although Chike-Obi said AMCON would not have survived without government guarantee, he urged stakeholders in the real estate sector to create demand for housing that would pressure the Federal Government into relaxing the Land Use Act, which he identified as one of the major challenges of the sector.
“Government has a role. It must not be afraid to use its balance sheet to guarantee the economy,” he said.
He stated that government had not taken housing as a priority by giving it social and economic benefits.
Chike-Obi also urged the government to hand over the housing funding facilities to private sector to guard against corruption and inefficiency.