There is some cheery news for prospective home/house owners in Nigeria. Nigeria’s Federal Executive Council recently approved the request of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to secure a $300 million loan from the International Development Association Housing Projects in Nigeria. Housing demand exceeds its supply and this has a multiplier-effect on rents. It is estimated that Nigeria needs more than 700,000 housing units annually as against the current 100,000 units available.
The main objective of the Nigeria Housing Finance Project is to increase access to housing finance by deepening the primary and secondary mortgage markets in Nigeria. Sequel to this development, people who up to now could not provide adequate collateral to access loans will not experience much difficulty in securing loans to enable them own homes/houses through a mortgage.
The deal is said to be an interest-free financing agreement that would be repaid over 40 years on behalf of the federal government. About $250 million will be geared towards the establishment of a Mortgage Refinance Company.
This is definitely good news, Nigeria is not bereft of good ideas; our bane is largely implementation of those ideas. We hope and pray that the implementation of this noble project will be seamless.
A revolutionary mortgage regime will boost this sector and will have a spin-off on other moribund facets of the economy. This is bad news for shylock landlords and estate agents but good news to prospective house owners and investors. Keep tabs on developments in the aforementioned orbit. We shall keep you posted on latest developments in this regard as they unravel. Kudos to the Minister of finance for brainstorming this idea.