In a bid to boost mortgage financing in the country for housing delivery and home ownership schemes, President Goodluck Jonathan has launched the Nigeria Mortgage Refinance Company Plc (NRMC).
Speaking at the launching of the company, yesterday in Abuja, the president said his administration had embarked on creating a stable macroeconomic environment that had lowered inflation from 12 per cent to 8 per cent last year, as well as reducing all impediments to a sustainable and dynamic housing market.
“The Nigerian Mortgage Refinance Company is being established to support our objective of making housing affordable to the people. The housing sector is a key component of this administration’s transformation agenda. That is why we conveyed the presidential retreat in May last year.
“In November, I asked the Coordinating Minister (for the Economy) to host a roundtable on housing finance. The objective was to take a critical look at the sector and recommend ways they could be harnessed to provide shelter for Nigerians and create jobs for our teaming youths.
“The housing sector is known worldwide as an avenue for job creation and economic stability, that is why we are focused on the sector and the concrete action we have taken in alleviating the major constraints to its rapid development.
“The first step we are taking is to create a macroeconomic environment that will lower inflation from 12 per cent to 8 per cent,” the president stressed.
He noted that government is carrying out these measures because of its understanding that high inflation constitutes a major impediment to the creation of sustainable and dynamic market.
“The next major step we have taken is to create the enabling environment for a primary mortgage bank and other financial institution to offer real mortgage facilities to Nigerians at affordable rates.
“That is the mandate we have given the Nigerian Mortgage Refinance Company Plc. We know that without government taking these initiatives as a nation, we cannot get to where we want to go,” Jonathan added.
He also stressed the need for the Land Registry to be computerised, saying doing so would help to improve land administration in the country.
He noted that the computerisation would ease the cost of construction and housing sales by private developers.
Two major agreements between the Ministry of Lands Housing and Urban Development and Shelter Afrique, and a subsidiary agreement between the Ministry of Finance and Central Bank of Nigeria (CBN) and the World Bank, were signed at the event.
The president, however, said it had become imperative for land registration costs to be reduced.
He equally noted that there was the need for the streamlining of quick completion of the foreclosure processes.
He therefore charged all governors to ensure they delegate land consent in their respective states, with a view to speeding up the process of land acquisition.
With its establishment, NRMC will provide similar services to the US-based Federal National Mortgage Association (FNMC), better known as “Fannie Mae”, which was set up during the Great Depression to expand the secondary mortgage market by securitising mortgages in the form of mortgage-backed securities (MBS).
This allows lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market.
Fannie Mae was established as a government-sponsored enterprise, but has been publicly traded since 1968.
The NMRC has been set up under a public-private partnership arrangement, of which with majority of the shares will be held by private investors.
Already, a $300 million (N50 billion) soft loan from the World Bank from its International Development Association (IDA) concessionary lending window has been secured by the government.