BY EMEKA EJERE
The Central Bank of Nigeria (CBN) is making funds available for the Family Homes Financing Initiative (FHFI), a housing intervention programme targeted at providing 300,000 homes across the 36 states of the country.
The initiative, which is also expected to create more than 1.5 million direct jobs in five years with a N200 billion funding, is targeted at low income earners, who may never have hope of building their own houses.
According to the framework for the implementation of the initiative posted on the CBN’s website, the facility will enable Family Homes Funds Limited (FHFL), which is the only eligible obligor, to implement the federal government’s Social Housing programme as part of the Economic Sustainability Plan 2020.
The framework was also designed to utilise at least 90 per cent locally manufactured inputs and as a result conserve foreign exchange. It would be funded at an interest rate that does not exceed five per cent per annum.
It stated that the programme deliberately aims to revitalise local manufacture of construction materials including doors and windows, ironmongery, sanitary fittings, concrete products, tiles, glass, electrical fittings/fixtures and bricks. It is also estimated that the programme would require up to 1.7 million doors, seven million door hinges and locks among other things.
Most of those to be directly impacted by the project, it stated, currently live in informal settlements with shared facilities in unsanitary environments as the project is targeted towards people on low income level across the country.
The framework added: “Funds would be released to FHF on project basis subject to the cumulative maximum limit of N200 billion. A project is defined as cluster of homes in the same geographical location and covered with the same title documents and approvals.”
Term loan, which would enable FHF finance the construction of social housing units for people on low income, will have a tenor of three years from date of disbursement and an interest rate of five per cent.
It further stated: “The Development Finance Department of the Central Bank of Nigeria shall be responsible for the management of the intervention facility. The CBN shall provide the funding for the initiative; appoint Technical Advisor with requisite skills in Housing Construction and Financing; release funds to the FHF on the recommendation of the TA; carry out periodic verification and monitoring of projects financed; and review the framework as may be necessary from time to time.
“Family Homes Funds (FHF) shall ensure prudent utilisation of facility for the purpose for which it was granted; adhere strictly to the terms and conditions of the Facility; keep up-to-date records of developments on each project site; allow access to the project and records by the CBN and technical adviser; repay the facility in accordance with the approved repayment schedule; and comply with the provisions of the Loan Agreement and the Framework.
“The Federal Ministry of finance shall issue guarantee to the FHF in respect of the facilities granted under the initiative; partner the CBN and the TA in monitoring the project till full repayment and comply with the provisions of the Framework.”
Commenting on the initiative, a construction engineer, Johnson Chukwuma, likened the structure of the housing market in Nigeria to a pyramid where the top which is thin is heavy with oversupply while the base is wide and undersupplied.
“At an estimated 20 million units, the housing demand-supply gap in the country is quite huge,” Chukwuma said.
“This is where you have the low income earners who need low income or what has come to be known as affordable housing. This area is largely underserved,” he said, stressing that CBN’s decision to intervene in that area is good news for the economy because jobs and wealth will be created.
Chukwuma added, “The CBN has also promised to assist the mortgage sector and also the various state governments to built capacity for issuing land titles. We hope all these will help both the supply and demand sides of the housing market, leading to more construction activities, more jobs and more wealth creation.”
The Chief Executive Officer Family Homes Funds Limited, Femi Adewole, CEO, emphasised that housing construction creates jobs fast, estimating that for every unit of housing that is produced, a minimum of four to six jobs are created.
Adewole said,“If we have a project that will deliver 300,000 homes in Nigeria and it is spread across all the 36 states, that will, over a five-year period, bring 10 million people into employment. This is possible and it is time to think in that direction.”
Meanwhile, the Real Estate Developers Association of Nigeria (REDAN), has expressed its readiness to build affordable homes for Nigerians.
“We will continue to ensure that the housing sector remains safe from the effect of the coronavirus pandemic. We will continue to recommend pragmatic solutions to the government and major players in the real estate sector to reduce the housing deficit in the country,” REDAN National President, Aliyu Oroji Wamako, said.
Available statistics show that Nigeria has an estimated 28 million housing deficit as of 2023, indicating that the country needs at least 28 million housing units to provide adequately for the population.
However, with the nation’s population growth rate, real estate developers and analysts are worried that this scenario may create more gaps in housing if government and concerned stakeholders refuse to step in with practical solutions.
Expressing concerns that the low income earners may be pushed outside city centres, especially in Lagos going by the rising housing cost, the Managing Director, Legrande Properties Development Company Limited, Mr. Babajide Durojaiye, called for timely intervention by the government and the private sector to solve the nation’s accommodation challenges.
According to him, government will need to intervene and collaborate with the private sector to produce mass houses to bridge the huge housing deficit. He feared that if nothing is done, houses within Lagos metropolis will be taken over by the rich and rented out to the rich at the end of the day, leaving the low income earners with no accommodation in the city centre.
Durojaiye said with the escalating rent of N2million and above per annum for two and three bedroom flats in many parts of Lagos, “there is need for the government to come into partnership with the private sector to produce mass housing.