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Challenges in the Proposed ₦500 Billion Recapitalization Plan for FMBN

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Industry experts have outlined critical issues that require attention to facilitate the proposed ₦500 billion housing recapitalization of the Federal Mortgage Bank of Nigeria (FMBN).

In 2019, the National Housing Fund (Establishment) Act, 2018, aimed at expanding funding sources for housing development, was not signed into law by former President Muhammadu Buhari. The bill was initiated by Ahmad Kaita (APC, Katsina North) and passed by both the Senate and House of Representatives in 2018.

In February 2023, the Minister of Housing and Urban Development, Ahmed Dangiwa, reaffirmed the government’s commitment to providing FMBN with the necessary support to fulfill its mission of providing affordable housing for Nigerians.

“As a minister, I am committed to being a way-maker, facilitator, and catalyst to the evolution of the bank as a modern, impactful, and resilient housing finance institution that delivers on the maxim that ‘everyone deserves a home,’ the minister said.

He noted that FMBN must be seen as a tool of service to Nigerians, tasking the staff to see their jobs, titles, and the salaries that they are paid as recompense for the services that they offer to Nigerians.

In the same vein, the Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Shehu Usman Osidi while receiving the federal housing delivery reforms at the Bank’s headquarters in Abuja disclosed that the Bank has commenced recapitalization exercise to boost efficiency in housing delivery to Nigerians.

According to the MD, “The Bank is one the enterprises slated for commercialization by the Government, with focus to repositioning and capitalization after a series of engagements with the BPE on the need for the Bank to stay true to its mandate of affordable mortgage financing by the Federal government.

“Already we have a 5-year strategy Blueprint, approved by the Board guiding our operations and a major ICT project in core banking application is nearing completion (95%) to prove service delivery and process efficiency,” he explained.

He added that the amendments of the FMBN and NFH Acts have also commenced in the National Assembly, noting that the grey areas that hindered thr assent to the Bill have been rectified.

It is reported that the current capital base of the FMBN stands at N2.5 billion.

However, one of the challenges that the Bank faces is the fact not all states have also subscribed to the NHF.

**What the federal government is Proposing**

To facilitate the recapitalization of the FMBN and enhance housing delivery, the Minister of Housing and Urban Development has established two task force teams.

One of the proposals put forward by the task force is to raise the minimum National Housing Fund (NHF) contribution from 2.5% to 5%, with tiered rates based on salary grades.

Additionally, the task force has suggested mandatory contributions from both private and public sector employees. It has also proposed voluntary contributions for fixed-rate mortgages exceeding a specified threshold.

The Task Force is also proposing the reintroduction of mortgage for both private and public sector employees.

Mr. Adedeji Adesomoye chairman federal housing reforms task team had already stated that the Committee is tasked with the responsibility to Comprehensively review operations and governance Structure of the Federal Housing Authority, Federal Mortgage Bank of Nigeria and Family Homes Fund

**What Experts are saying**

Reacting to the development, a real estate expert, Dotun Dare while said “The NHF Act which provides for every commercial or merchant bank, insurance companies, and Pension Fund Administrators (PFAs) to invest 10 percent of its profit before tax (PBT) into the Fund at an interest rate of 1 percent above the interest rate payable on current accounts of banks is not feasible

According to him, the National Housing Fund (NHF) Act, enacted during military rule, is no longer applicable to commercial banks focused on profit-making and investments.

Similarly, real estate expert Musa Abdulqadir expressed concern that increasing the minimum NHF contribution from 2.5% to 5% could face resistance from contributors.

Abdulqadir noted that “Even the 2.5 per cent contributions by workers, many people die without accessing and now the government wants to increase it so they can mop up equity ahead of recapitalization. I think that will be a kangaroo exercise,”

Speaking further he said the compulsory inclusion of public and private sector employees as part of the Proposal of the ministry of urban and housing development for the National Housing Fund may also be difficult “Because even many states are yet to key into the contributions let alone private individuals who have pessimistic views about Fund,”

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Lagos schedules meeting with owners of distressed buildings.

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The Lagos State Government has said it would soon arrange a meeting with developers/owners of distressed buildings on how best to address the redesign and remodelling of such structures by November.

This was disclosed recently by the Commissioner for Physical Planning and Urban Development, Oluyinka Olumide, at a function in Alahusa, Lagos.

Olumide said the prevalence of distressed buildings in different parts of the state was worrisome and needed the urgent attention of all stakeholders.

He said, “The Ministry of Physical Planning and Urban Development as mandated by the Lagos State Urban and Regional Planning and Development Law, 2019, as amended, was willing to extend its responsibility for approving the remodelling of existing buildings to provide technical assistance to developers and owners of distressed buildings, especially on the design and remodelling of such buildings.

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FG threatens contractors over Enugu-Onitsha road delay

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The Federal Government has instructed the contractors responsible for the 107km Enugu-Onitsha road dualization to expedite the project.

This directive was given by the Minister of Works, Senator David Umahi, during a meeting with MTN, the Enugu State Government, and the contractors, RCC Ltd and Nigercat Ltd, on Friday.

According to a statement released on Friday, the minister said he is disappointed over the slow pace of work on the project, he said, “Let me express my disappointment over the slow pace of work on that project. It is one of the worst roads in this country.

“Everywhere we have diversion; diverting from the one that RCC and Nigercat had completed, the contractors are not kind enough to even put stone based on the diversion points.”

He added, “So, by the reason of the launching of our Operation Free our Roads, it is now a violation of the policy on the side of the controllers and directors of the Federal Ministry of Works where we have vehicles falling on any project that is ongoing or where there are potholes on our roads.”

He also blamed the sufferings of road users on the lack of commitment and insensitivity of the contractors.

“The public must know that the President’s intention is not for them to suffer while trying to fix the roads, and it is their right to insist that contractors should fix the roads that they are engaged on,” he said.

The Minister commended the Enugu state government for their resolve to fund the construction of a 20 KM section of the road and expressed hope that MTN would execute the second phase of the project.

He noted, “Why the Enugu State government is intervening is because of the slow pace of work by the contractors and because of funding issues. The essence of tax credit is for funds to be made available. And so, I don’t see RCC going to keep their promise to finish this project in 6 months.

“My advice to MTN is to look for another contractor within that axis if they want to get the job done. Division of labour is even the best. While they are doing the road, and if Nigercat is doing a good job, you can give them greater scope to do if you want to finish that job.”

He warned contractors that the Federal Government would not accept phased handovers of projects and has phased out Variation of Price in contract administration.

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Ekiti state government mediates land dispute between traditional ruler and family in Epe-Ekiti

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The Ekiti State government has intervened to resolve a longstanding land dispute between the Elepe of Epe-Ekiti, Oba Ayodele Adesoye, and the Atolagbe family. The government cautioned against the misuse of modernization as an excuse to disregard traditional customs.

In line with the community’s traditions, the government has ordered the release of resources, including palm trees at Oko Oba Farmland, to Oba Adesoye for his administration. This decision ensures the continued adherence to age-old practices.

Ekiti State Deputy Governor, Chief (Mrs) Monisade Afuye, announced the resolution in Ado-Ekiti. The decision was made after considering the Elepe’s claim to Oko Oba Farmland based on historical evidence.

Mrs. Afuye acknowledged the Elepe’s right to be the custodian of Oko Oba Farmland, citing longstanding traditions that support his claim. The decision reflects the importance of respecting historical practices and ensuring their preservation.

The deputy governor, however, told the monarch in clear terms that other princes and princesses from all the three ruling houses should be allowed to farm on the land without payment of royalty.

Mrs Afuye appealed to the community to comply with the government’s position to restore unity, peace and orderliness to the beleaguered community.

Oba Adesoye expressed gratitude for the government’s decision and pledged to foster peace and unity between the throne and the community, aiming to accelerate Epe’s development.

Representing the Atolagbe family, Dr. Yemi Agbeleoba acknowledged their willingness to cede Oko Oba Farmland to the monarch. However, he emphasized the need for all three ruling houses to participate for a lasting and traditional solution.

Agbeleoba expressed appreciation for the government’s directive, believing it will contribute to resolving the long-standing conflict.

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