How 14 pi­lot states can ben­e­fit from mort­gage re­fi­nance scheme

Daily Trust - - PROPERTY - By Mustapha Suleiman

When the Nige­rian Mort­gage Re­fi­nance Com­pany (NMRC) was launched early this year by the federal govern­ment, 14 out of the 36 states of the fed­er­a­tion in­di­cated in­ter­est in the scheme. They are to serve as the pi­lot states and by ex­ten­sion a ver­i­ta­ble test case for the much-talked about Pub­lic Pri­vate Part­ner­ship ar­range­ment be­tween the Federal Govern­ment of Nigeria and the pri­vate sec­tor set up to bridge the fund­ing cost of res­i­den­tial mort­gages and pro­mote the avail­abil­ity and af­ford­abil­ity of good hous­ing to work­ing Nige­ri­ans by pro­vid­ing mort­gage lend­ing banks with in­creased ac­cess to liq­uid­ity and long terms funds in the mort­gage mar­ket.

The 14 pi­lot states that have shown in­ter­est in the mort­gage scheme of which the re­main­ing 22 states are await­ing the out­come of the ro­mance be­fore fol­low­ing suit are: Abia, Anam­bra, Bauchi, Bayelsa, Delta, Edo, Enugu, Ek­iti, Gombe, Kaduna, Kano, Kwara, Ogun, Ondo and FCT.

The federal govern­ment, while try­ing to con­vince state gov­ern­ments to key into the pro­gramme, said if the states can cre­ate an en­abling en­vi­ron­ment for the mort­gage fi­nance, they will be able to at­tract NMRC to re­fi­nance mort­gage loans cre­ated in these states by in­creas­ing em­ploy­ment/labour and hous­ing pro­duc­tion and stim­u­late hous­ing con­struc­tion and man­u­fac­tur­ing of build­ing ma­te­ri­als in such states.

The federal govern­ment stated that such states will ex­pe­ri­ence a sig­nif­i­cant in­crease in In­ter­nally Gen­er­ated Rev­enues (IGRs) through with­hold­ing tax earned from in­creased trans­ac­tional ac­tiv­i­ties, per­sonal in­come tax earned from in­creased res­i­dency in such states, and free in­come earned from in­creased vol­umes of mort­gage trans­ac­tions at the lands reg­istries due to ef­fi­cien­cies cre­ated by dig­i­ti­za­tion and re­duced mort­gage trans­ac­tion costs.

The federal govern­ment reels out more ben­e­fits therein thus: “The op­por­tu­nity pre­sented by the hous­ing mar­ket can be ex­ploited if all govern­ment agencies -- state and federal and pri­vate sec­tor fi­nan­cial in­sti­tu­tions and con­struc­tion com­pa­nies, etc act re­spon­si­bly. What this means is that all house­holds wish­ing to ei­ther de­velop their ex­ist­ing homes or ac­quire a home of their own must know that they have easy and fair ac­cess to a Cer­tifi­cate of Oc­cu­pancy with­out any doubt. This must be as nat­u­ral as the right to a pass­port. Land reg­istries in the states must pro­vide ac­cess to these rights at a low cost and within a few months rather than within a few years as is of­ten the case.”

The tone of the federal govern­ment of­fer to states through NMRC sounds en­thralling and with the re­cent take-off of the pro­gramme, time will tell how ef­fec­tive this pro­gramme will be. Ques­tion on the lips of many ob­servers of the scheme is whether it will not end up in the usual good pol­icy but poor im­ple­men­ta­tion.

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