During his campaigns, Ahmed Bola Tinubu promised that the housing deficit will be tackled through a mortgage system. Mortgaging is a system where the property is secured on loan by an individual, which is to be repaid in installments. The source of mortgage can vary in different places but in Nigeria, the major source of mortgage is the Federal Government. And it seems that the president is committed to fulfilling his campaign promises. As a first act of office, he oversaw the removal of fuel subsidy, which has now seen the price of premium motor spirit (PMS) rise to N617 per liter.
However, the chief executive officer (CEO) of a real estate company Pelican Valley Limited, Dr. Babatunde Adeyemo, has revealed that real estate financing and the mortgage system is not something that any government can eradicate overnight. According to the Federal Mortgage Bank, Nigeria’s housing deficit is currently pegged at 28 million units as of January 2023. This is a concerning issue, which should be a priority for the new administration. But the government has to mind the policies they put out in a bid to solve the problem.
Current economic realities make the system difficult to implement.
Dr. Adeyemo said that the housing deficit in the country is complicated and needs a lot of deep research and study to tackle. First, real estate financing is an integral part of the scheme, which is meant to provide housing for all. The government cannot address this without addressing the economic issues that the country is currently facing. He stated that no system can prosper with a bad economy, such as the one of Nigeria. Thus, the mortgage system will be extremely difficult to implement with the current economic situation. Nigeria has myriad economic challenges and the government cannot face real estate alone.
So, he said that he believed that the president’s campaign promise is a mere political statement for now. On how the mortgage system works, the major source of funding is the Federal Government. Also, it operates through agencies. Recently, the Nigeria Mortgage Refinance Company (NMRC) raised some funds from the capital market. This was the latest effort by the government to grow the system. Basically, after the funds are raised, the agency channels it through mortgage banks from where it flows down to the real estate companies. These companies, like Dr. Adeyemo’s, get to access the loans to build houses that way.
FG needs to set up monitoring committee for this project.
In the current system, Dr. Adeyemo said that he sees no difference from the previous one. He said, “This is still like the old system whereby after approving the release of money, these agencies have their people that they contract it to and before you know it, they start spending money ridiculously.” In other words, the nomenclature may have changed, but the procedure remains the same. The money still goes through the NMRC to mortgage banks, from where only connected real estate companies are awarded the contracts.
As a solution, he suggests that the president appoint a serious minister for housing who will assist in bringing together a team of experts that will look for individuals in the sector, who have the country at heart, to formulate policies that will disband the old system. Additionally, he believes that the government should seek genuine real estate investors out there who may not necessarily be the big names and work with them. In simple terms, the government will investigate the individuals whom they are contracting these houses to, discuss with them, and remove all bureaucratic bottlenecks that would hinder them from accessing the loans.
President’s system can work if the government is serious.
Finally, Adeyemo said that making housing available for everyone can be achieved through the system that Tinubu had proposed before he got into power. He said that when increased availability of housing units, it brings about a massive reduction in its price. However, there’s the need for an adequate monitoring system. “When these projects lack monitoring, someone somewhere will not allow it to trickle down to where it ought to go and we have a repeated cycle of what we have had before,” he noted.
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Tinubu mortgage plan not feasible–CEO – Head of Pelican Valley Ltd speaks about Tinubu’s campaign promise on housing. – Express your point of view.
In reality Adeyemo admitted that the President proposal on housing for everyone will work if the bottlenecks in the government are removed, gather teams that will develop a new modality that can make the project a reality and competent and reliable real estate investors should be contacted . Mr Adeyemo had given the President a good advise they he can run with based on the housing scheme he proposed. I believe the president will take the advise seriously.
For people to have house to their roof, we need to resort to this mortgage of houses. It is important for us to get to this level. If we are able to mortgage houses, the inflation on real estate will stop.
It’s interesting to hear that the CEO of Pelican Valley Ltd has expressed doubts about the feasibility of Tinubu’s mortgage plan for housing. While it’s important to have ambitious goals when it comes to providing affordable housing, it’s also important to ensure that these plans are realistic and achievable. It will be important to carefully evaluate the details of Tinubu’s plan and to work with experts in the field to ensure that it is viable in the long term. Ultimately, the goal should be to find a solution that can help to address Nigeria’s housing crisis in a sustainable and effective way.
We have no choice but to resort to the practise of mortgage lending in order to ensure that everyone has a home. It is essential for our success that we reach this level. If we are able to take out mortgages on homes, the price of real estate won’t continue to rise.
The goal should be to find a solution that can help to address Nigeria’s housing crisis in a viable and successful way, working with experts in the field. It is important to have ambitious goals when it comes to providing affordable housing, but it’s also important to ensure that these plans are realistic and achievable.
We have no choice except to use this mortgage on homes. We must advance to this point if we are to succeed. The increase in the price of real estate will stop if we can obtain mortgages. This is enable people to purchase house on loan and it will make it easy for people
To make sure that everyone has a home, we are forced to turn to the practice of mortgage lending. We must go to this level if we are to succeed. The cost of real estate won’t increase if we can obtain mortgages for houses.