The Federal Government can now go ahead to access a $300 million loan facility from the International Development Association (IDA) to boost the country’s mortgage system.
This is sequel to approval granted Wednesday by the Federal Executive Council (FEC) presided over by President Goodluck Jonathan.
The Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, had brought a memo to Council, seeking approval for the loan facility to be accessed.
Briefing State House correspondents at post-Cabinet meeting, Minister of State for Finance, Yerima Ngama, explained that the loan would assist in bridging housing deficit in the country.
According to him, the objective of the Nigeria housing finance project is to increase access to finance by deepening the primary and secondary mortgage market in Nigeria.
He noted that the housing demand in Nigeria has expanded rapidly due to current urbanization trends, putting the annual demand at an estimated 700,000 units, saying that it is far above the current production level of below 100,000 units.
The Minister justified the loan further “Council approved that we access $300 million from the international development association which is a soft borrowing for developing countries from the World Bank.
“This facility is going to be used to meet the government’s objective in the proposed housing finance project.
“The Nigeria housing finance project is aimed at increasing access to housing finance through primary as well as secondary mortgage market in Nigeria.
“Right now, we only have primary mortgage institutions. so we are going to establish a mortgage refinance company that will benefit from this. Hence $250 million will be devoted to the establishment of the mortgage refinance company.
“The remaining money will also be used for three other companies for the Nigeria hosing finance project.
“The establishment of mortgage guarantees product targeted at the lower income borrower will gulp $25 million.
“This guarantee will enable people who otherwise cannot provide adequate collateral to access loans.
“There will also be $25million which that will be lent to housing micro finance banks so that they too provide housing finance.
“We know that one of the major issues that is constraining the development of our mortgage industry is lack of technical competence as well as capacity building. So $10 million will be devoted to capacity building and also as technical assistance. This would give them the capability to drive the mass housing scheme”.
Council also considered and approved a memo presented by the Minister of Interior, Abba Moro, seeking approval for Nigerian citizenship to be conferred on 174 foreigners.
consequently, 45 foreigners were granted citizenship in the registration category while 129 were in the naturalization category.
However, Council denied 27 of the applicants over issues bothering on security and tax payments.
